Figuring out whether or not your social media marketing efforts have been worth your while can be measured through ROI.
In this guide, we’ll discuss what ROi is, what is a good ROI, and the importance of using it to measure your success.
Social Media ROI definition
It’s likely that when you work in marketing, especially a niche market, you’ll hear ROI tossed around quite frequently, but what is the true ROI meaning? ROI, or return on investment, is a way to measure how profitable an investment is or could be. When it comes to social media, ROI is typically measured by monetary value.
Let’s look at an example. If you’re running a campaign to increase your brand awareness, ROI is measured by an increase in followers or impressions. However, your ROI will change depending on your goals.
In general business and SEO terms, you can use ROI to measure the value of multiple investments across your company. It's as essential as calculating inventory turnover. From efficiency to new staffing, there’s many ways for ROI to become beneficial to you. Still, just like any other metric, ROI does have its limitations. Knowingly, it may be time to see if you need an eCommerce social media manager to help you handle the load. This role is one of the best side hustles, so you should have quite the selection of professionals to choose from.
Why Is It Important to Measure Social Media ROI?
Measuring your social media ROI is vital for many reasons, here are a few:
- It can help you identify what strategies are working for your business and which ones aren't–this way you can improve what works and fix what doesn't.
- Create a budget plan for your social media efforts
- Show your team that your strategies are providing the intended results
- Give your marketing and social media management team an idea of where your company stands
How to Measure Social Media Marketing ROI
You can measure social media ROI by looking at both organic and paid efforts. Many social media platforms have a way for you to track your efforts on the platform itself; but if you’re looking to quantify this yourself, here is a basic formula to follow:
Profit / Investment x 100 = social media ROI %
- Profit: The money you have earned from your social media marketing efforts
- Investment: The total cost of your social media marketing efforts
This formula is best used if you’re trying to calculate revenue. When you begin to measure ROI in terms of non-monetary metrics it can get a bit more tricky, but the end goal is still the same–figure out your monetary return compared to your investment.
To calculate non-monetary investments you can use your marketing funnel. The marketing funnel can link your ROI to customers at different points in the funnel.
Once you understand where your customers are in the funnel, it's now time to analyze and report the findings so that you can come up with a strategy to improve or continue your methods.
- You can analyze your social media performance per platform and compile it into a spreadsheet. This will give you a better idea of what platforms and strategies are working best across the board
- Make sure that your company objectives align with what metrics are being included in the report
- Make a list of strategies that turned a profit and those that didn't meet the mark
- Map out any changes and adjustments that need to be made going into your next round of optimization in order to improve your roi.
Social Media ROI Tools
Figuring out social media ROI is difficult enough to calculate, so we’ve compiled a list of our favorite tools that can help you accurately measure your ROI.
Kissmetrics is a popular analytics platform that will aid you in optimizing your ROI strategy. You can track users and groups as they travel through your website. This platform tracks users anonymously from their first visit, to every click in between, and finally their exit. This is one of the best tools there are to measure conversions, behavior patterns, and ROI. The reason this platform stands out from the others is because it keeps track of when users leave, when they return, and what they do on your site upon their return.
Cyfe is an all-in-one platform that provides you with information about how your information is getting shared across your social media channels. Front there, you can use this information to measure the impact on your ROI.
This platform is fit with widgets that you can add to your desktop; the widgets show reports from Google Analytics, Twitter, blog engagement, and so much more.
- Google Analytics
Google analytics shows you where your traffic comes from and how users move through your site–including those from social media. It can even show you what stage of the sales funnel your customers are in and what their interests are. With as many integrations Google Analytics has available, there’s many ways you can customize this platform to your needs.
- Customer Lifetime Value Calculator
Social media is generally used to generate leads. If this is the goal you had in mind for your social media campaigns, then it's a good idea to calculate your approximate customer lifetime value, or CLV. With the CLV calculator you can find out how much a lead is costing you to pursue, and whether or not the pursuit is worth it. Once you know your CLV you can get a good idea about how much you want to spend on lead generation.
Return to Sender
Learning about your social media ROI is one way to help your business grow. If you need help building brand awareness through social media, using social media ROI can help. Consider leaning on a team like BlueCart, who can help you navigate billing, payments, eCommerce, and so much more!