A whopping 90% of brands say they use social media as a tool for raising brand awareness. But according to a recent survey by Sprout Social, 55% of social media marketers say measuring ROI is their number one challenge.
Clearly, businesses realize how important social media is for staying competitive in the digital age. After all, over 40% of digital consumers turn to social media when researching new brands. Platforms like Facebook, YouTube, Twitter, Instagram, and the like present an incredible opportunity to personally connect with buyers. You can humanize your business, raise awareness for your brand, and introduce new products in an instantly shareable way.
That said, social media is like every other marketing effort: just because it can be an effective approach, that doesn’t mean any attempt at engaging buyers on social media is bound to be met with success. You need a social media strategy. You need to do the research necessary to clearly define your customer persona, your business objectives, and your likeliest path to success.
And you need to be able to measure your return on investment.
ROI is an elusive calculation for too many social media marketers. After all, so many of your social media goals are intangible. How do you measure brand awareness? What concrete number represents customer trust and advocacy? How do likes and shares translate into dollars and cents?
Believe it or not, there actually is a system for assigning real value to the abstract benefits of social media marketing.
Step One: Define Your Social Media Objectives
The first step towards measuring ROI is defining exactly what it is you’re trying to accomplish. So many business owners struggle with social media ROI because their objectives are undefined. They know social media is important. They have vague hopes that their social media posts and ads will help more buyers find them. But they never link actual, actionable goals to their efforts.
Take a look at where your company is in its overall efforts toward growth. What is the best use of social media for your business at this time? Do you want to use these platforms to:
- Raise brand awareness?
- Gain subscribers?
- Get people to sign up for a free trial?
- Drive purchases?
- Get users to download an ebook?
You may have multiple goals for your social media efforts, in which case it’s a good idea to measure the success of each campaign separately. Tools like Google Analytics’ URL Builders and UTMftw are excellent for creating campaign-specific URLs. This helps you track the success of each individual social media campaign, so you can best evaluate which efforts are seeing the most success and how that translates into ROI.
Step Two: Find the Right Social Media Marketing Tools
Once you know what your objectives are, you can choose the best tools for measuring your success.
It’s important to remember that a business cannot measure success on social media the same way an individual does. While details such as likes, shares, and comments aren’t irrelevant, they do tell you very little about how social media is (or is not) helping you grow your business. If your current goals are focused on the Awareness phase of the digital marketing funnel, you can give a little more attention to user engagement on the platform itself. But even in the Awareness stage, there are many more metrics to consider.
Which platforms most effectively drive traffic to your site? What actions do social media users take when they follow a link to your website? How long do they stay? Do they come back?
There are a ton of excellent tools for social media, covering everything from keyword research to competitor analysis. For determining ROI, we especially love Google Analytics and Cyfe.
Google Analytics allows you to define goals and track your success in reaching them. This allows you to separate your social media efforts from all other sources of traffic and see in one clear snapshot how well your social campaigns are working.
Cyfe is great because it acts as a single dashboard for literally all your business metrics. Since your social media efforts have been carefully strategized to integrate with your overall business objectives (right?), it’s a good idea to look at these metrics side-by-side with all your other digital marketing channels.
Once you’ve chosen your preferred tools for measuring social media performance, it’s time to figure out how those stats translate into dollars and cents.
Step Three: Set KPIs and Assign Monetary Value
You know what your objectives are for social media. You want to increase your email list or double sales this month or get more people talking about your brand . . . you get the idea.
So, considering your objectives, what are your Key Performance Indicators (KPIs)? Conversions? Sign-ups? Downloads? Shares? Bounce rate?
And what is the monetary value of each KPI?
This is where a lot of business owners get overwhelmed. If your immediate objective isn’t sales, then how do you know the value of it?
Zoom out and look at the big picture. Based on your conversion rate, how much is a single site visit worth? What is the lifetime value of each customer? If you’re measuring the value of engagement from organic social media content, compare it to paid advertising. How much would you have paid to get the same results you just achieved with your social media efforts?
You’ll find that every action doesn’t have to make your cash register ching! to have meaningful monetary value. Once you’re able to define that value, you’re all set to determine what your social media efforts are worth, where you need to finesse your strategy, and where you should double down.
In order to do that . . .
Step Four: Track Every Social Media Expense
Not even organic social media marketing is free. Sure, you can post on Facebook all day without paying Zuckerberg a dime, but you still invest a lot.
Not only do you need to keep track of every last expense, but you also need to make sure you account for the intangibles as well. Just as you need to figure out what every KPI is worth, you have to define every social media effort with a number. This is especially important if you’re planning to be your own social media marketer. Just because you’re not paying a contractor, it doesn’t mean the labor is free. How much time are you putting in, and what is your time worth?
It takes some thought and some brain-exhausting calculations, but trust us:
When you know the concrete value of what you gain and what you invest, you can make sure all your social media efforts translate into business growth.
By determining clear guidelines for tracking ROI, you can easily run test campaigns and determine their efficacy immediately. You’re less likely to spend too much time trying things that don’t work, and you can more quickly identify the type of content that literally pays off.
That said, we know a lot of this is easier said than done, especially if you have other things on your plate . . . like, you know, actually running your business. We’re always here for you if you could use a hand drawing up a digital marketing strategy for your highest ever ROI. Contact us anytime.