Social media is an excellent tool to communicate with your customers, to generate leads, sales, and to create customer loyalty. Also, using social media is mostly 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, and replying to customers are all essential steps to creating an online presence. So whether you handle your social media presence 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 do they measure it. The results show that 60% of marketers use the number of fans or followers as an indication of ROI. We will see at the end of the article why this is a bad idea.
To help the more than 52% who are having troubles calculating ROI, here are a few tips on measuring your campaign’s effectiveness.
Content being shared
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 monitor the links, posts, news or other information you share. The more your content you share, the more likely customers are to interact with your brand, and will thus be more liable to buy your brand over than your competitor.
There are two main ways you can go about to doing this:
- Have your web developer set up a Google Analytics account for your website. Your analytics account will tell you where visitors on your website come from (Google, Facebook, Twitter, directly from your address) and you will see how many visitors come to your site. You can compare the dates on your analytics account to those of your social media postings, and analyze what pages they visit, how long they stay and conclude which type of posting works best for you. Another, more in-depth technique you can use is URL tagging. This method is a little more complicated, so it’s better to have a web marketing team handle it. By “tagging” the links that you post on your social sites, you will be able to sort your analytics by type of post, content or campaign, and can even isolate individual posts. For example, if you launch a Christmas campaign, you will be able to differentiate it from your year-round campaign and measure its effectiveness, or compare different ads. Google Analytics is free and available to all.
- You can use a social media management tool such as HootSuite, or TweetDeck that will automatically record your tweets, posts and links on different sites and provide you with statistics.
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 prospects coming from social media, you can either use URL tagging or create custom segments comprised off all the social media sites you use. Both of these methods will allow you to see the ROI generated only by your social media efforts. However, tagging can be more precise if you want to see results according to different campaigns. Also, don’t forget to give each lead a dollar value to know if the time and labor you spent offsets your social media costs.
Measuring sales are very similar to measuring leads. For some types of business where sales volume is relatively minimal, measuring prospects can prove to be a more accurate measurement of ROI. If you have a high sales volume, however, measuring the sales made through your social media campaigns is the ultimate way to know if your efforts are paying out.
The number of fan/followers/friends
The numbers of followers/fans/friends that you have is not an accurate way of calculating ROI. For instructions on how to interpret your number of fans, read this article: What are Facebook Fans Worth?