How to measure social media ROI for your business

Is your business really getting something out of its social media efforts? If it’s hard to tell, you’re not alone. According to the latest Sprout Social Index™, proving social media ROI was the second biggest challenge for social media teams.

So if you’re struggling with measuring social media ROI yourself, we get it. Measuring the return on metrics such as engagement rate or customer satisfaction often feels like a guessing game.

Besides, not everything you do on social media translates directly into dollars and cents.

Yet at the same time, businesses need to account for the time and resources that go into their social efforts. That’s why we put together this guide so you can assess social media ROI based on your unique online presence once and for all.

Why social media ROI matters

To skeptics, social media has the reputation of being a total time-sink.

Sure, businesses can pour hours upon hours into their social without seeing much in return beyond a few vanity metrics.

On the flip side, so many brands are killing it with paid and organic campaigns alike. Plus, businesses these days must have a social presence of some sort. It’s one of the best ways to boost brand awareness and reach a new audience.

Many brands are even using social media as a customer service channel.

As such, effectively measuring your social media ROI helps in accounting for your time and resource spending. You can even use the insights to inform your campaigns and make improvements for increased engagement.

If you want to squeeze the most out of your social media efforts, you need to define what you’re trying to get out of your presence.

With that, we dive into the meat of figuring out your social ROI.

How to calculate social media ROI

The process of calculating your social media ROI involves collecting your data and aligning it to your goals. You will need to look at different social media ROI metrics such as impressions, engagements and link clicks. Then compare these metrics against the cost of running your campaign to make sense of your ROI.

This can be a time-consuming and complicated process. But there are tools to simplify your ROI measurement. For instance, you can use Sprout’s Advocacy ROI Calculator Tool to see how your employee advocacy program is paying off. This lets you measure your social media ROI in terms of brand awareness, lead generation and hiring.

1.    Define the purpose of social media for your brand

Let’s be clear. Social media ROI is not some sort of one-size-fits-all affair.

When we think of “ROI,” we often default to thinking about money. Yet not all brands are necessarily using their social presence to “follow the money.” For example, raising brand awareness is a perfectly good reason to invest in social media.

At the same time, other brands may be focusing on social media marketing to generate leads.

Businesses may invest in lead magnet offers or targeted ads which are strategies that yield measurable results. In these cases, it will be much easier to account for their social media return on investment.

For example, here’s Apple promoting the Macbook through a targeted Twitter ad for iPhone users. This strategy will directly translate to measurable results in the form of leads and conversions. The brand will then be able to measure its social media ROI by looking at the number of traffic and sales coming from the ad.

Meanwhile, some brands are primarily concerned with customer service and community building.

Timely back-and-forth with customers is key to retention. Failing to pay attention to customer concerns via social could result in someone bouncing to a competitor. In this sense, customer service can provide a massive ROI with just a little bit of effort.

Heck, you could be doing all of the above. Many brands are, actually.

The takeaway here is that is no single way to use social media effectively. To define your social media ROI, you need to first break down the “why” of your presence. This could ultimately frame how much time or money you’re willing to invest in the first place.

Getting a return on that investment means understanding your performance.

But to do that, you need a data-driven endgame.

2.    Set actionable social goals

Reality check: it’s impossible to measure your social media ROI without knowing what to measure for.

In our guide to building a better social media presence, we discuss the need to set measurable, realistic goals. The same rules apply to uncover your social ROI.

Below are some common yet specific goals for any given brand’s social campaigns:

• Email list sign-ups
• Contact form inquiries
• Trials
• Purchases
• Downloads of a whitepaper or ebook

Note that all of these goals involve someone taking a measurable action. Check out the following video to get an idea of the key social media ROI metrics to track.

Metrics like social shares, followers and general traffic are worth tracking but they shouldn’t be your main goals. Unless you’re focused solely on engagement and awareness, these metrics don’t drill down deep enough for assessing ROI.

To get the most accurate numbers for your social media ROI, it pays to set your goals based on defined actions. Specifically, actions that convert a casual browser to a lead and ultimately to a paying customer.

Someone clicking a link to your site in a Tweet is always nice but tracking such interactions shouldn’t stop there. For example, you need to know whether those clicks are resulting in sales or other meaningful interactions.

Make your goals campaign-specific

Rather than look at the big picture of your social presence, social goals should be campaign-specific. This is a critical aspect of measuring ROI that so many marketers miss.

A campaign is a planned effort with set goals and a measurable outcome. Here are some awesome examples of social media campaigns to help inspire you and clue you in on what we’re talking about.

For example, any brand running a paid Facebook campaign should know whether or not their ads paid off. Through analytics, the answer is fairly straightforward.

One of the most important reasons for setting up a campaign is that it will let you track individual links that you share on social. This allows you to easily attribute visits from specific links you share.

For example, brands on Instagram oftentimes update their bio link to coincide with their latest promotions. Rather than use a generic link, URL trackers help tie clicks to specific campaigns and calls-to-action.

Check out how ColourPop Cosmetics uses a Beacons link in its bio to track conversions from Instagram.

3.    Measure your goals

Once you’ve defined your goals, the next step is to track them. The tracking part is why it’s so important to set up goals based on your visitors taking action.

The easiest way to track your social media goals is by using Google Analytics. This will show you how much traffic came from social and how long those visitors spent per session. From this same report, you can even view the conversions and revenue from organic social.

To view this report using Google Analytics 4, go to your “Reports” and click on “Acquisition.” Then select “Traffic acquisition” to view a full report of traffic acquisition by channel.

Further, you can filter the report based on the type of conversion event. Slide to the right-hand side of the report and click on the drop-down menu below “Conversions.” Then select the conversion event you want to view such as adding to cart or purchases. That way, you can get an accurate idea of how many people from social actually ended up buying.

4.    Track your social media expenses

To figure out whether you’re getting a positive or negative ROI for social media campaigns, you’ll have to measure how much you’re spending. That spend doesn’t just involve money, though. Here’s what to include in your ROI calculations.

• Time: Your time is valuable–whether you’re a solo business or you have a social media team. Add up the hours that go into a specific social media marketing campaign over a specified period of time. Don’t just use an employee’s annual salary, though, as they’re more than likely going to be working on several projects throughout the year. Then measure the investment you make per campaign.
• Content: Did you hire a professional copywriter to write a landing page? Or maybe you outsourced status updates. These costs are easy to overlook but they certainly count. If you’re writing such copy yourself, that’s going to count toward your time investment.
• Social media tools: Using Facebook and Twitter is free. But if you’re using a tool like Sprout Social or other social media management software, you need to add those costs in. Just like with the hours, you should calculate this on a per-campaign basis. So if your campaign lasts for one month, only add in the cost of a month of the software, not an entire year.
• Ad costs: If you’re running a Promoted Tweet or boosting a Facebook post, add in that cost as well. This is fairly easy to track as you set up your ad budget.

After factoring in all your expenses, you can use the social media ROI formula below to make your calculation for each campaign.

Social media ROI = (Earnings – Costs) x 100 / Costs

Earnings will include the revenue you earned from your campaign. Your costs are the expense items you calculated above (hours, content, etc).

You can figure out the specific ROI for each social network by segmenting your earnings and costs per social channel. Then make the per-channel calculations using the same formula above. After looking at the numbers, you’ll be able to decide which social platforms are doing the best for your company and hone in on those.

For any social networks or campaigns that are bringing in a negative ROI, you can either try to adjust by spending less or fine-tune your campaigns.

Tips for improving your social ROI

On that note, let’s quickly cover some additional pointers for stepping up your social media marketing ROI.

1.     Optimize your posting frequency

With social feeds refreshing every second, it’s easy for your content to get lost in a sea of new posts. That means your target audience isn’t going to see your content, let alone engage with it. No engagements equal no returns on your social media investment.

So you need to post new content regularly to ramp up your visibility. Ideally, you should post multiple times a day to get your content in front of the right audience. Not sure how often to post on social media? The industry average stands at a whopping 11 posts per day.

Don’t just stick to these industry norms, though. We recommend testing different posting frequencies to see what works best for you.

Boosting your posting frequency doesn’t just help with social media algorithms. But it even shows your audience that you’re active and you’re worth following. No one wants to follow a brand that only Tweets every other week.

Create a posting schedule to follow consistently. And use social media scheduling tools like Sprout to automatically send out your posts based on that schedule. This lets you plan your content for an entire month and schedule posts to go out at optimal send times.

2.     Improve your engagement metrics

Engagement is the gateway to conversion activities. Someone who engages with your product promotion post is more likely to show interest in the product than someone who just scrolls past it. They might take a closer look at the product, click on the link and eventually buy the item.

So you need to get those engagement metrics up if you want to boost your social media ROI. Leverage strategies to boost your social media engagement. This might include posting at the right time, using eye-catching visuals and creating compelling copy.

Most importantly, make sure you’re creating content that resonates with your audience. Use Sprout’s social media analytics tools to keep a close eye on your post-level engagement metrics. See which posts are getting the most engagement to gauge what’s resonating with your followers. Then use those insights to inform your social media content strategy.

3.     Mine your social data

Measuring your social media ROI essentially boils down to your metrics. Beyond Google Analytics, take a hard look at your social dashboards to understand your performance.

For example, which types of content are your top performers? When are you getting the most engagement? These data points can be make-or-break for paid and organic campaigns alike.

The more data you have on hand, the easier it is to maximize your reach and get a better ROI for your efforts.

Tools such as Sprout are invaluable for mining your data to figure out data points that go beyond the likes of your native analytics. Not only can you get a look at all your channels in one place, but you can use features like message tagging to group together all the messages in a given campaign. This allows you to compare and contrast performance across different campaigns. That way, you can pinpoint what is and isn’t connecting with your audience and adjust your campaign planning accordingly.

4.     When in doubt, run test campaigns

Marketers today have to run a variety of campaigns, paid or otherwise. And not all of those campaigns will pay off. Before going all-in on a particular campaign or ad type, save yourself time and money by running a test first.

This is especially important for paid ads like those on Facebook that can quickly blow out your budget if you aren’t careful. Check out our comprehensive guide on testing on social media to learn more about what it takes to run an effective test.

5.     Tap into the power of social commerce

Social commerce has exploded in popularity over the past few years. It has helped to seamlessly bridge the gap between researching products on social and actually making a purchase. According to the Social Shopping in 2022 survey, 68% of consumers have bought something directly from social media.

Conducting commerce on social media makes your ROI much more evident by tying social engagement to retail success. Use Sprout’s social commerce features to connect your Shopify and Facebook Shops product catalog to the platform. That way, you can focus more on ways to drive sales through social and less on managing different tools for product links or customer history.

6.     Take advantage of the tools of the trade

Thankfully you don’t need to use a ton of tools to assess your social media ROI. We’re all about keeping things lean and taking a DIY approach when appropriate.

Make sure to leverage Google Analytics to track your campaigns and goals. And don’t forget to tap into the robust suite of Sprout Social tools to schedule, manage and track details of your social media posts.

And with that, you have everything you need to break down your social ROI.

How are you measuring your social media ROI?

Knowing exactly what you’re getting out of your social media presence doesn’t have to be a huge question mark.

For the sake of efficiency and accountability, businesses must define and measure their social ROI. This does the double duty of ensuring that your campaigns focus on goals and that your resources are going to the right places.

Get the most out of your metrics with our social media data toolkit.

 

 

The post How to measure social media ROI for your business appeared first on Sprout Social.

from Sprout Social https://ift.tt/Fz2mINR
via IFTTT