Measuring Your Social Media ROI

Measuring Your Social Media ROI

ROI: the brass ring, the golden goose, the Big Kahuna of marketing!

If you’re using social media as part of your marketing mix I bet the question of ROI has come up at least once, as in, “How the heck are you supposed to measure it?”

Social marketing is unique in that many times we’re perfectly ok doing it with no measurable results at all because “everyone is doing it” so it must be right. If we don’t at least have a Facebook page, we start to feel guilty, like we’ve gotten the party invitation but still can’t decide what to wear.

But that’s dangerous and unnecessary thinking. There’s no magic to measuring social media success and it doesn’t have to be complicated. Here are a few ideas for thinking about ROI and some ways you can start tracking yours today.

Start With Your Goals

This may sound like a whole lot of nothing new, but you can’t measure something if you don’t know what you’re measuring.

If I asked you right now, “How wide is it?” I bet you’d look at me sideways and reach for the white jacket. But if I said, “How wide is the frame on that wall?” you could grab a ruler and go to work. If I said, “How wide is the ocean?” You’d probably need another tool.

The same goes for social media. You have to know what you’re measuring before you can measure it and before you can choose the right tool for the job.

So what goals might you have for your social marketing efforts?

  • To make sales
  • To generate leads
  • To provide customer support
  • To create brand awareness
  • To build an email list
  • To perform market research

It’s up to you to determine your goals and list them clearly so that you can decide how to measure each one.

The Metric: Conversions

If sales is one of your goals, you need to know whether you’re actually making any. Sales are probably the easiest thing to track and measure. And you do it the way you’d track any other sale on any other channel.

Tag your links: One way of tracking sales is to tag your links as part of a campaign so you can view analytics to see whether people who have clicked the link followed through with a purchase. Use a tool like Google’s URL builder to add specific parameters to your URL that you can follow through your sales funnel in Google analytics.

Use a special coupon code: You can track response to an offer by providing people with a special code to use at checkout and only make this code available on one social network. It may be tempting to use one code across multiple networks, but if you really want to measure the effectiveness of your social presence, you want to get granular and measure Twitter vs. Facebook vs. Google, etc.

Advertise: Given the uber-targeted nature of Facebook ads (and the pitiful likelihood of getting your posts shown in the newsfeed) you may want to experiment to see what kind of response you get to various ads and offers. Be sure to track your spend against revenue so you know whether you’re making out on the deal.

The Metric: Leads

If you don’t make direct sales, perhaps because your products are custom and require human interaction (not just a quick ecommerce transaction) or because you’re a service provider, you can still get people into your funnel who will eventually buy from you.

You’ll need to be extra diligent about tracking leads because it’s not as simple as tagging a link or creating a coupon code. That means you need a lead-management system in place so you can track the source of your leads, follow up, and assign revenue that you can attach to social marketing.

For example, in our business, we may “meet” people on social media, build that relationship and eventually engage them in a project. But if we don’t track that person from “favorited our tweet” to “paid us to build a website” then we’ll never know that our social efforts paid off.

Sometimes learning the source of a lead is as simple as asking. Whenever someone calls, we always ask, “How did you hear of us?” If the answer is, “I follow you on Facebook” then chalk up a win for social. And sometimes you may have to dig a bit. People may not lead with social but that doesn’t mean they don’t follow you there. Whether the lead is direct or indirect, it’s good to know.

The Metric: Service

This one is tough to put a number against. Some companies measure it by a percentage reduction in customer service phone calls. If you can do that, good for you. But most people I know don’t have entire customer service departments, let alone measure the number or duration of calls.

You may even get more service requests on social channels because some people are more comfortable tweeting than calling. If you suddenly get hit with a ton of customer service questions that you weren’t fielding before, it could be a good sign that customers are finding and engaging with you in a positive way. It may mean that you’re solving problems and answering questions that you would never otherwise have had a chance to address from people who weren’t inclined to pick up the phone or compose an email.

So this is more of a soft metric but customer sentiment is important. Try surveying your customers to see how they feel about your service and whether it’s working for them. Happy customers always equal more sales and more referrals.

The Metric: Engagement

What good is a like or follow? Not much, unless it leads to something bigger, something that ties into your goals.

Talk about soft metrics, engagement is one big squishy mess. But it can be valuable, it’s just that you need to understand what that value is.

Engagement in and of itself doesn’t mean much, but all marketing starts with engagement. You open the door, someone peeks inside, then they take a step in, then they give you their email address, then they let their troubles leak and you jump in with a solution, then they buy from you.

Engagement can build brand awareness. It can improve customer retention. It can foster evangelism. It can expand your circle by bringing in friends and followers of your friends and followers.

So yes, go ahead and count your fans, count the number of likes that you get on particular posts (so you can repeat the winners and ditch the losers of course), count the comments and evaluate the sentiment.

If you’re creating positive experiences for your leads and customers you’ll know you’re on the right track.

The Metric: Knowledge

One of the hidden gems of social media is the ability to conduct market research without the expense of market research.

Want to know how your customers feel about your products or services? How they feel about competitors? What they like/want/worry about? It’s all there if you look!

Want to know which features your customers would like added to your next product release? How about which ones drive them nuts? You’ve got an entire focus group online and all you have to do is ask. Post questions, conduct surveys and instead of guessing about what people really want and need, you’ll actually know.

Your fans and followers (and even those who are not your fans and followers but who are talking publicly about topics related to your business) are a treasure trove of information. And they love to share their opinion.

Value? Priceless.

It’s important to remember that there is often not a straight line between social media and sale. Someone may follow you on Facebook and get your emails and visit your website. It’s altogether likely that your social presence gave you the top-of-mind position that tipped the scales in your favor but chances are its a combination of efforts that led to your marketing success.

Social media ROI can be a slippery beast and if you’re focused exclusively on numbers you may be missing out on some of the higher-level benefits that it can offer. But that doesn’t mean ditching numbers, throwing up your hands and insisting it’s impossible to measure. It can be measured – as long as you start with a goal and then define what success looks like at the other end.

What are your social marketing goals? Is it something I’ve covered here, or something else? How do you measure success? I’d love to know!