One of the biggest complaints businesses have with social media is proving that it actually works. My clients, for example, have no problem investing in social media, they just want to know that it’s actually bringing in SOME income at the end of the day. Fair enough!
Many have given up social media (or at least Facebook) altogether because they think it can’t make them money. Well, I hate to break it to you…but that’s a big misconception. Social media CAN make you money. You just need to understand how to track your ROI, and while it’s not always easy there are some steps you can take to do just that!
- Set your conversion goals.
Different organizations have different goals for what they consider a “conversion” on social media. However, whatever you choose, it needs to be a measurable action that ultimately has monetary action. Your measurable goal could be something as cut and dry as a monetary purchase, it could be subscribing to your email newsletter, using an online quote feature, hitting your landing page, or even just engaging with you on social media (since that engagement could lead a potential customer to purchase from you or a current customer to patron your business again).
- Track conversions.
This can be a little tricky, although if you use a combination of Google Analytics and the social media platforms’ analytics, you can typically get a pretty good idea of what’s happening with your campaigns.
Some things you should be tracking are:
Reach: you can measure this by looking at the number of followers you have on your social media account and monitoring growth there over time.
Traffic: Traffic is extremely important for most businesses, since it means you can further target those people with remarketing campaigns and get them to convert to customers.
Leads: Leads are another important number to track, possibly the most important. Keep track of the number of leads coming from each referring site.
- Assign monetary value to each conversion.
This can be the hardest step…especially if you don’t have historical data. If you do and you know the lifetime value of your customers, and you know, for example, that a certain percentage of people who reach your landing page and watch your sales video will convert, then you can calculate the value of getting people to that page to watch the video.
If you DON’T have any historical data, then the best thing you can do is guess. What is the value of a new email subscriber? What is the value of getting someone to engage with you?
- Measure the financial benefits per channel.
Figure out how much money you’re making from each individual social media platform so it’s easy to see where you need to spend more time and marketing dollars, versus the platforms that may not be the best use of your time.
- Calculate total costs.
Calculate the cost of the labor as well as any ad dollars you have spent.
- Analyze and improve results.
This, again, is the perfect opportunity to figure out exactly which platforms are best for you. It’s also an opportunity to see if you should be putting more money into some platforms. For example, if you are seeing a strong return on the money spent on Facebook ads, maybe it would be useful to increase your ad spend to get an even stronger return.
Something else to keep in mind… it’s not easy to measure the value of a “like” or a “share.” But there IS value there. Every time you touch a potential client, you increase the likelihood that they will do business with you.
Remember, people like to buy from those they like, know and trust, and social media is all about building relationships so that people WANT to do business with you. Even if it seems impossible to measure the exact ROI on your investment, I promise you, there is value there!