As a growing business, you need to have a social media presence. But are you actually getting anything out of it? It’s unlikely that the countless hours you’ve spent on your social media campaigns have been futile, but measuring your success isn’t always easy! Working out your return on investment for any of your marketing strategies can be challenging, but social media may be the hardest. A lot of your efforts won’t directly translate into profit, so showing key stakeholders the value of social media engagement is often tricky.
Knowing your social media ROI can be useful for two main reasons. Generally, it’s about justifying the time and resources you invest into social campaigns. On the other hand, you may need to demonstrate that you should scale your efforts back, as you’re not getting a good return on your investment. Either way, how can you work out your social ROI, and is it complicated to do?
There’s no one-size-fits-all formula for calculating ROI, as every business has different objectives and values. For instance, your main focus could be sales and revenue, customer engagement, or brand awareness. Before you can start working out the return on investment for your social media marketing, you first need to determine how you’re measuring success. What is it that you’re hoping to achieve?
Once you know your overarching goal, you can break this down into smaller targets. For example, if you’re trying to increase your customer engagement, you may also be hoping to boost your social following, as well as the number of people liking and commenting on your posts. It’s not as simple as just stating that you’ll be measuring social engagement! You need to consider quantifiable metrics.
If you’re not sure what types of goals to set, you may wish to consider the S.M.A.R.T. goal framework. This acronym stands for specific, measurable, attainable, relevant and timely. So you need to be completely clear about what you want to achieve, and ensure that you can measure the success of the campaign – preferably through numbers and percentages.
In terms of setting attainable goals, you do want to push yourself, so don’t make them too simple, but consider whether your targets are possible in the time-frame you’ve allowed yourself. Making your goals relevant sounds obvious, but it can be easy to stray from your original objective. Always consider how your targets will benefit the business. So if you’re trying to increase your Facebook followers, this will show audience engagement, which in turn can boost brand awareness and sales, both of which are great for your organisation.
Once you’ve confirmed your primary goals when it comes to social media marketing, you can start putting trackers in place. There are a variety of platforms which allow you to do this, and each tends to focus on particular actions and interactions. Google Analytics is great for tracking actions on your website, like sales and newsletter signups, while social management platforms like Buffer or Hootsuite can give you figures for likes, shares and follows.
The thing to remember when it comes to tracking your goals though, is that you need to measure the results of each campaign. If you were to simply look at the numbers at the end of each month, you wouldn’t know the reasons for any fluctuations. But if you’re tracking a particular campaign, in which you spent twice as much on Twitter ads, you’ll know that this change is what influenced the results.
For some people, just seeing an increase in followers or engagement is enough when it comes to ROI. But it’s unlikely that your finance team will agree – they’ll probably need to know how your social campaigns are performing from a financial perspective. There are a few things you can consider here, starting with the lifetime value of a customer. This is essentially the amount of money you earn on average from each customer. From this, you can work out how much each site visit could be worth.
You can also compare the cost of your social media campaigns with PPC costs. If you were to run ads to achieve the same goals, such as increasing your website traffic, would PPC be cheaper than social media marketing? You do need to consider whether there are secondary benefits from either strategy though, like brand awareness or customer engagement.
While creating a social media account on each platform is free, this doesn’t mean that your social strategy costs nothing. The obvious expense is advertising – you probably pay at least a small amount each month to expand your reach or boost your posts on social channels. Not to mention any social media tools you use, such as scheduling and analytics platforms.
But the biggest expense could well be your time. How many people are in your marketing team, and how many hours do they spend on social media campaigns each week? Comparing these costs against your key metrics should show you whether you’re seeing a good return on investment or not.
If you’re looking to boost your return on investment, the first thing you should do is gather as much data as possible. See what successes you’ve had in the past, and try to determine the reasons behind them. This should be simple if you’ve been tracking each campaign individually – otherwise, you’ll need to collect new data!
Once you’ve analysed your previous data, the best way to improve your social media return on investment is to run test campaigns. Try out lots of different approaches, in relatively small sample sets (so you don’t spend your entire budget on each test!) and see which one works best. You can compare content type, images, and written copy, or even see whether more frequent posts, at specific times of the day, are more successful. It’s always good to have data on your approaches, so you can confidently say that the methods you’re using are going to give you the best results and ROI.