Earning a return on your investment is the reason we all choose to invest in something, With social media it can hard to guage the return on investment and today we are going to help you learn how to gauge your companies social media ROI. There was a study done to look at challenges that small business owners may face when it comes to looking at their social media ROI.
56% said an inability to tie social media to business outcomes
39% said a lack of analytics, expertise and/or resources
38% said poor tools
35% said inconsistent analytical approaches
30% said unreliable data
Most people said they were unable to tie social media to business outcomes which in some industries it will be easier to do than others. Lets say you own a restaurant and you want to see how many people come to your restaurant from your facebook page. You could add a coupon that you only have on facebook and see how many people redeem your coupon at your restaurant and keep track of that number. A lot of companies get caught up thinking about how many likes they have and how many followers they have. With social media there are plenty of fake accounts or accounts that won't benefit your business except the number of followers or like you have. You would rather have 50 followers and 40 of them are your customers than having 500 followers and only 5 customers.
Calculating your social media ROI
1. Figure out your goals
What do you want to get out of social media?
Sign-ups
Email lead generation
Downloads
These are trackable goals that will benefit your business, even though you can track your shares, likes and follows those measurements won't benefit you as much. Someone engaging with your post is good but you want them to click on the link that is attached to your post and then complete the action on your landing page.
2. Tracking your goals
It is necessary that you track your goals so you know how to stay on track and what needs to be fixed in the future. The easiest way to track your social media goals is by using Google Analytics.
From your Google Analytics dashboard, go to Acquisition > Social > Conversions.
You are going to create a goal that that resembles what results you want, in Google Analytics. For example, you want to track email sign ups from twitter, you will then create a thank you page that will not be indexed in google so the only way someone can get to that page is from signing up with their email. You will then select "Destination" as the goal type and attach the link in the box. You can also value how much each conversion is worth to your business.
Formulas
Lifetime Value x Conversion Rate
You can calculate the lifetime value of your customers here and then the average number of email subscribers who become customers to find out the potential value of each visit.
Average Sale
If your goal is to get sales, then you’ll want to calculate your average sale amount and set that as the value. If you want to figure out the average sale, your destination page would be the page that shows up after a customer completes a purchase instead of the thank you page.
3. Expenses
You must account for hours that you have worked, cost of content creation if you outsourced it, social media tools, and ad spend.
(Earnings – Costs) x 100 / Costs
The formula above will give you your social media ROI.
Tools to help
Google Analytics: Help track goals and campaigns
Google URL builder: Help with tracking links for your campaign
Customer LTV Calculator: Calculating the Lifetime Value of your customers
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