Social media is a great tool to communicate with your customers, to generate leads, sales, and to create customer loyalty. In addition, most of social media is free, easy to use, and available to all. Because of all of these reasons, some businesses do not feel the need to measure social media effectiveness: it’s free and it’s beneficial, so why bother?
However, finding information to post, preparing the post, replying to customers are all essential steps to creating an online presence. So whether you do your own social media or hire someone to do it, you need to know if it’s increasing your revenue or not.
In a survey by Chief Marketer titled “2011 Social Marketing Survey”, we learn that 52% of marketing of professional survey think it is hard to measure ROI for social media, and 42% say it is difficult to track and see results. Nevertheless, all still continue with their social media campaigns.
Chief Marketer also asked – for those who do measure ROI – how they measure it. The results show us that 60% of marketers use the number of fans or followers. We will see at the end of the article why this is not a good idea.
To help the more than 52% who are having troubles calculating ROI, here are a few tips on measuring your campaign’s effectiveness.
How much your fans share and interact with your contents is one of the easiest ways to calculate your ROI. No matter what business you are in, you can share links, posts, news or other information that can be monitored. The more content is shared, the more customers interact with your brand, see your brand and will be more likely to buy your brand rather than your competitor’s.
There are two main ways you can go about to doing this:
Social media can be a great tool for lead generation… if you measure them. A lead can be a customer filling out a contact form, requesting a demo, visiting your online store, or just accessing your contact information. The best way to measure those leads is once again with a tool like Google Analytics and creating goals; if you have a marketing team, they will be the one responsible for goals. You can refer to our post on measuring your website’s ROI to know more about setting up goals.
To isolate the leads coming from social media, you can either use URL tagging, or you can also create custom segments comprised off all the social media sites you use. Both of these methods will allow you to see the leads generated only by your social media efforts. Tagging takes more time but it also more precise if you want to see results according to different campaigns. Don’t forget to give your lead a dollar value to know if the time and labor you spend on the leads you are receiving offset social media.
Measuring sales works the same way as measuring leads. For some types of business where sales volume is relatively low, measuring lead proves more accurate. However if you have a high sales volume, measuring sales made through your social media campaigns is the ultimate way to know if your efforts are really paying out.
The numbers of followers/fans/friends that you have is not an accurate way of calculating ROI. Some fans can be passive and completely overlook your marketing efforts, while others will be very responsive. For instructions on how to interpret your numbers of fans, read this article: What are Facebook Fans Worth?