We talk a lot about the importance of using social media marketing as part of a well-rounded marketing strategy. Now it’s time to flip the conversation and talk about your return on investment, or ROI. Social media marketing is a long-term investment, and in order to see the biggest returns, you’ll want to track your data and make adjustments as you go.
The Social Media Examiner recently released their 2015 industry report surveying more than 3,700 marketers. The extensive findings show that marketers who spend six hours per week or more on social media see the most benefits, and over half of those who’ve been at it for more than two years reported increased sales. (If you don’t have time for that, we can help.)
There were some marketers who said social media didn’t help their sales, and that’s how a lot of businesses feel. A lack of sufficient tracking and a general misunderstanding of the qualitative benefits of using social media for a business could be to blame. Below is an outline of both quantitative and qualitative measurement, along with tools to help you put them to use.
Quantitative vs. Qualitative Measurement
Quantitative measurements include the tangible hard numbers available for ROI, like audience size or reach, click-through traffic to your website, leads generated, new customers and your conversion rate.
With deeper insight into the numbers, you might find that certain channels work better for you than others, or that the various channels require different types of content and interactions in order to achieve the highest return.
Here are six simple quantitative steps to measure social media ROI:
1: Set goals. Do you want to see a certain number when it comes to website traffic or purchases? Maybe you’d like to have readers fill out a contact form or sign up for a newsletter. Even PDF downloads or social media interaction (liking, commenting and sharing) can count as measurable goals.
2: Track conversions. Most social media platforms provide built-in tracking tools.Google Analytics is free and can provide an inside look at your website’s statistics. You could also opt for more sophisticated (and usually fee-based) apps and tools, but it isn’t necessary.
3: Assign a monetary value to each customer per action. If you know the lifetime value of a customer is $100, and one in 10 people who fill out your contact form become customers, the value of getting someone to fill out the form is $10. If you don’t know the exact number, trust your gut instinct on value. How much would you be willing to pay for each newsletter sign-up or PDF download?
4: Measure benefits by channel. Create a spreadsheet that connects your tracked data and conversions to the assigned monetary value.
5: Determine costs. You’ll want to account for any paid fees, labor hours, and cost of labor per hour for each social media channel.
6: Calculate ROI and identify improvements. You can calculate everything together or by social media channel to see where you might want to scale your efforts up or down.
Qualitative measurements are a little fuzzier in comparison. The less measurable benefits to social media marketing are advantages like increased name recognition, trust, relationship building, and earning the coveted top-of-mind recall potential — all perks that can’t quite be tracked in the moment but can ultimately lead to customer referrals and conversions.
Let’s say you’re an insurance agent. You post a photo of a company outing to Instagram, showing off your company’s culture and personality. This image provides your followers and customers with a new way to see you, connect with you and build trust, which is all part of nurturing a well-rounded business/customer relationship.
Or maybe you write a blog discussing common points people often overlook when purchasing insurance, and you share it on Facebook and in your email newsletter. Dan, who’s on your email contact list, has a friend who anecdotally mentioned how overwhelming purchasing insurance is. Having just seen that Instagram photo of your company outing as well as your newsletter, Dan has you top of mind and leaves a comment telling his friend he’s got just the insurance person. (You!)
When people feel like they’re receiving valuable information from you, you become their go-to expert in your field. When you share your knowledge online, you give your clients the opportunity to pass that information along to someone else. When you post to social accounts regularly with photos, tips and anecdotes, your name becomes recognizable and easy to remember. All of these benefits happen organically over time and trigger a subtle shift that makes someone a loyal customer.
But every business is unique, as are the goals and marketing efforts of each, so we’ve scoured the Internet to collect the very best ROI resources. Here are 11 to add to your social media repertoire:
1: 10 Questions to Ask When Measuring Your Social Media ROI
Are mind readers a thing yet? This blog does a fantastic job asking and answering questions for you, like “What are some common mistakes to avoid?”
2: Why Content Marketing Fails
This slideshow breaks down marketing attribution and the importance of the qualitative side of ROI. Many companies think the content marketing path is as simple as producing content that quickly leads to a purchase. But in reality, it’s not that simple at all.
3: The Delightfully Short Guide to Social Media ROI
If you’re looking for a quick overview of calculating social media ROI, this blog does it in under 1,000 words.
4: The Social Media ROI Cookbook
You’ll find data on why measuring ROI is important and an in-depth report on the different ways you can measure it, including top-down and bottom-up approaches. You can also find case studies and a helpful step-by-step process to figure out which approach might work best for your business needs.
5: 12 Experts on Why Every Marketer Should Care About Conversion
If you need a little more convincing about the value of taking the time to calculate ROI, look no further than the 12 experts on this blog. They share what they test, as well as what they’ve learned along the way.
6: Why We Stopped Focusing on Direct Social Media ROI: A New Way of Viewing Conversions
For Buffer, “Social media, first and foremost, is branding — and it is increasingly difficult to measure branding as a direct, one-to-one conversion.” Why? Branding is visibility, reach, name recognition — all those intangible, qualitative benefits of social media marketing.
They didn’t stop tracking ROI, just direct social ROI. They instead track blog traffic as visitors who register as email subscribers, which is where people who find them on social media usually end up and where valuable customer conversions happen.
7: 20+ #SocialMedia Monitoring Tools for Business
Social monitoring and tracking tools can make the process of measuring your ROI easier. There are options all in one place that can track across multiple platforms. This infographic outlines 20+ options.
8: Why Social Marketers Need to Get Clear on “Engagement”
This helpful blog covers the different types of engagement that a business can experience across social media, including content, brand and direct engagement. Understanding what type of engagement you’re experiencing is crucial to understanding how and what you track, as well as the value of engagements achieved through the three different forms.
9: 14 Formulas to Measure Social Media
Social media measurement comes in all shapes and sizes. This resource provides 14 formulas broken down into five categories: advertising value, content value, research value, support value, and lead and sales value. There’s also a breakdown of everything you should consider when calculating costs.
10: Social Networking Media ROI Calculator
Forget the formulas — here’s an actual calculator!
11: How to Present Your Social Media ROI Report to the Boss
A thorough and thoughtfully presented ROI report justifies the time and labor required to run social media marketing campaigns, and it’s an important part of any company’s overall marketing strategy. Whether you’re the boss or you need to present your findings to one, it can be helpful to look at the topic from a different perspective.
The importance of social media marketing is widely reported, and statistics show this type of marketing is a worthwhile practice for businesses of all sizes. If you want to refine your social media strategies, dive into the numbers and calculate your social media ROI.
Whether you’re looking at quantitative benefits like conversions or qualitative perks like name recognition (or both!), there are a ton of resources and tools to help you find what works best for your business. It’s a long-term investment with some trial and error involved, but it will be well worth it!