Social media is no longer a fad. Every businesses and individuals know it for a fact. While most of them are comfortable to spend some time on Facebook and Twitter, when it comes to measuring the return on investment, most of the businesses feel unsure. Probably, the reason is, there are too many questions and metrics involved. Yes, questions and metrics, they are the main factors to gauge SMM RoI. And once you are sure of them, evaluating social media RoI would be easy.
Let’s start with the questions.
These are the questions that you should ask yourself before you start calculating social media RoI:
What is your goal?
Is it branding, sales augmentation, lead generation, or subscription to your business’s e-newsletter? It should be a specific action that you want to achieve through social media.
What are the tools, I would use to measure RoI?
Is it Google Analytics or you have any other tool in mind? There are many free and paid tools available. You need to decide on them and make a final list, but make sure it takes care of all the social networks, you are on.
What are my priorities?
Do you like to have more and more ‘Likes’ or ‘Followers’ or something else that would have greater impact on your sales funnel? According to Leslie Poston, senior social media strategist for Flightpat, share rates and click through rates play a more important role than the former, in RoI.
Are my social media ads working?
Do your Facebook ads help you to get 5000 ‘Likes’ in one week? It is great, only if the new fans engage with you, drive traffic to your website, add up to your sales funnel, or accomplish any social action, that is measurable. Else, you need to rethink your ad strategy.
Should I hire a social media professional/agency?
First check if your organization has the required skills and technical knowledge to handle social media marketing. If not, you can hire a social media agency or a consultant to help you in strategizing, implementing, increasing and measuring your social media efforts. Remember, time is money! If you cannot do it yourself, do not waste your time. Let an expert do it for you while you work on your core competence.
How often should I measure social media RoI?
Most of the social media agencies would offer you monthly reports, but you should insist for a weekly one. Having a weekly report will help you understand if your social media and content marketing strategy are working, per your expectations.
Now the metrics! Social media RoI metrics are two-fold: Brand Reach and Transactions.
Brand Reach: According to a recent finding, generating brand awareness is the top social media marketing goal for most businesses. Brand awareness KPIs are paid and non-paid. Paid marketing includes social media ads while non-paid marketing includes reach, frequency and impressions. Brand engagement includes KPIs like Re-Tweets, Shares, Re-Pins, driven by social media to your website.
Twitter Followers + Facebook Fans = Total Reach
Website visits + Engagement + Shares + re-tweets = Potential Reach
The number of Twitter Followers times the number of Tweets = Total Impressions.
The number of Tweets/Facebook updates a day/week/month = Frequency.
Transactions: This is comparatively easy to measure. The number of orders, average amplification of order volume, sales conversions, social media-generated offline sales etc are the key metrics to decide transactional social media RoI.