Social media ROI is just another buzz word, right? Not exactly. Some will tell you that social media is about other benefits. But the fact of the matter is that you need to measure the return on investment in any business whether it’s time or money invested, otherwise your business will fail. So it’s not a buzz word, it’s been around in business for decades.
Social media and marketing strategists constantly struggle to deliver to their boss what the ROI is of a particular social media campaign or worse, their social media efforts as a whole. The problem with this is that it’s an impossible question to answer if you don’t first have goals. That’s right, before you even decide to dabble in social media, you should be asking your boss what s/he is expecting out of your social media efforts. Is it more donations? More customers? More web hits? More video views? An increase in customer satisfaction? When you know what the goals are, you can measure easily. And the goals are different for each brand.
For example, if your boss’ goal is to get more sales, then the goal is two-fold: increasing fans to convert to sales. The first goal of increasing Facebook fans by x% in a certain time period. The second goal would be to convert those fans (prospects) to customers. How do I measure that? Simple:
- First take the # of Facebook fans you currently have (let’s say 1,000) and let’s say you want to increase by 10%. That means you need to increase fans to 1,100. And let’s assume you want to do all of this within 2 weeks.
- You create a promotion and/or some other strategy to increase fans. You get 80 more fans and your total fans now is 1,080. You’ve increase your fans by 8%. Way to go. But we’re not done…
- Now let’s say you have no money in your budget to do a new promotion for Facebook, but your boss still wants to see an increase in sales. Your company is having a general online promotion of 20% off when you spend $200 or more. You decide you are going to track the general promotion with a separate bit.ly URL for Facebook so that you can tell which sales came through promoting it on Facebook.
- Let’s say 80 sales came though total to the website and through Google Analytics, you can tell that 16 people came from your bit.ly Facebook URL. You now can show that you increased sales by 20% with Facebook.THAT’s HOW YOU COMPUTE ROI.
- More donations = more people spreading your message, feeling compassion about cause
- More fans/followers = more sales, more people talking about your product/service
- More web hits = the ability to show your investors that your product/service matters