Quick Steps To Define And Measure Social Media ROI For Your Business
Most of you must have heard the term ‘social media ROI’. But what does it really mean? Broadly, social media ROI is the total of all the activities, efforts, investments and actions on social media that create value for your brand or business. This could be in the form of brand awareness, traffic to your website, sales through social media promotions, and of course, revenue.
So why is social media so important?
A study shows that when choosing a doctor, hospital or medical facility, social media affects more than 41% of peoples’ choice. Isn’t it surprising that decisions regarding something as crucial as health are based on social media? Businesses not applying this profitable source could be missing out on an essential marketing tool. Some of the proven benefits of social media are:
- Improves brand awareness
- It’s a cost-efficient platform
- Boosts customer engagement
- Improves brand loyalty
- Increases customer satisfaction
- It shares insights about marketplace awareness
- Enhances the brand authority
- Increases traffic to the website or physical spaces
- It helps in enhancing SEO rankings
Let’s talk about social media ROI
All of the above could be ROI specifics. As mentioned above, social media ROI would vary depending on the purpose or aim of the brand. If the goal was to create audience engagement, then the success would be measured in terms of the number of people reached, the kind of engagement created and the number of interactions generated.
If the aim was to increase revenue, the success would be measured in terms of the number of targeted leads generated, sales closed and revenue earned out of a campaign.
This brings us to an essential point: Why do you need to measure social media ROI?
The answer is quite straightforward. Social media ROI can show the impact of your social media marketing efforts on your business performance. It can help you understand the areas in which your efforts are being utilized; it can help you target areas of your business and help in (re)strategizing.
Your audience and consumers are key to your business. Social media ROI based approach can help you understand what is working for your audience, what they want and what needs to be changed.
Measuring social media ROI is easier said than done
Bunch of people believe that social media ROI cannot be measured. One reason for that: marketers try to assess the success of social media marketing with the help of metrics like ‘likes’ and ‘shares’. What they should be measuring is cost-per-click and cost per acquisition. This would make it easier to compare it with other marketing channels.
So do all kinds of businesses need to get social?
The answer would be more or less, YES! Whether providing a service, product or both, today, most businesses have and are expected to have an online presence, of which, social media platforms – Facebook, LinkedIn, Twitter, Instagram, and Pinterest – are the main spots.
Social media is a key tool for generating soft leads, as it develops the brand identity and brand engagement. We now know that social marketing is a must for brands. We also know that measuring social media ROI is essential.
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Parameters to consider when evaluating ROI
1) Clear objectives
Aligning social media strategy to business objectives is imperative. If your social media marketing objectives are not set in line with your brand or business goals, what’s the point? If your business wants to increase revenue, but your social media campaigns are targeted at only generating audience engagement without any Call To Action (CTA), your social strategy is completely wrong.
Here’s an example of Wayfair, a furniture brand. For years, the brand tried to utilize good images on Instagram to entice the audience to buy. But it is only in 2017 when Instagram introduced the shopping features, that the brand started actually generating sales through social media.
2) Be SMART
a) Specific: Do not leave any space for ambiguity. Get as specific as possible. When writing your goals, instead of writing increase Facebook following, write down the number of new followers or the percentage of new followers that you ware targeting with a deadline.
b) Measurable: Ensure that you set goals that you are able to measure. Intangible goals such as ‘increase excitement around the product’ will not give you specific numbers. Instead set goals that can be measured in numbers, graphs and metrics.
c) Attainable: Don’t let over ambition take over your excitement. Set goals that are attainable and realistic. Over-ambitious and unrealistic goals will only lead to disappointment.
d) Relevant: Keep it relevant and to the point. Ensure that your goals are aligned with your company’s objectives.
e) Timely: Follow timelines to the tee. Fix the date of commencement and end date. This will help you in measuring the ROI.
3) Measure these metrics
- For engagement: likes, comments, clicks, shares, and brand mentions
- For reach: followers and impressions
- Make use of tools such as Google analytics, Facebook analytics and more
4) Keep track of expenses
Once you have set up your goals, started generating quality content, posted content and started seeing traction, make sure you keep a track of the expense to calculate how much your investment is returning to you. You would be spending on social media tools, people or labour and paid ads that help generate revenue.
Review performance and re-strategize if need be once you reach the end of a phase on the timeline. Rethink. Reflect.
To wrap it up, let’s look at the key social media marketing trends for 2019. As shared by Hootsuite CEO, Ryan Holmes in an article in Fast Company, here are some cues for brands and marketers:
a) Progressive brands will and should focus more on generating authentic, transparent and meaningful engagement
b) Personalizing social content will be a key challenge but that’s the way forward.
c) Share insightful and relevant content, create communities of like-minded people.
d) The Stories format is growing 15 times faster than newsfeeds.
e) LinkedIn is rising, is no-nonsense and the most professional platform. It is helping brands grow with the intersection of the personal and the professional.
f) For them to be seen, Social media ads would need to be paired with creativity and time.
Now that you’ve read about social media ROI- the how, the what, and the why of it, are you already thinking about how to market your brand on social? If you would like to know more, read these articles from the HQ Digest and tell us what you think.
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