“We don’t have a choice on whether we do social; the choice is how well we do it.” Erik Qualman succinctly describes how important it is for businesses of this age to be on social media.
And yes, social media marketing has matured as a core business strategy for most, if not all, companies. And hence, it is time for it to compete with other established marketing channels.
What is Social ROI and how do you measure it?
In order to devise a comprehensive digital strategy involving social media and to allocate sufficient resources to it, it is imperative that business leaders be confident of how social media marketing could contribute towards achieving corporate goals.
This means that social media, like any other marketing channel, has to demonstrate its ROI.
When no business wants to put money in activities that do not pay off, why should social media marketing efforts be any different?
Every marketer would agree that they wish calculating social ROI were that easy, but not every social media campaign has quantifiable results.
Not every social media marketing success is measurable. A survey by Manta said that only 39% of the companies saw a return on their investment in social.
25% of the marketers surveyed by a State of Inbound survey said that their biggest challenge was to find the ROI of their marketing activities.
And yet, you can measure ROI of social by taking the ratio of cost against gain. Cost covers the various efforts like labor, training, development, technology, paid media, overheads.
And to estimate gains, you need to look at your internal analytics to determine consumer actions like purchases, page views, downloads, list signups and so on.
These will help you determine the conversion events and tie them up with the calculation of social ROI. Social ROI is defined as “measure of the efficiency of a social media marketing campaign.”
That is plain and simple, isn’t it? So, how do you actually measure it? By following the formula –
Social Media ROI = (SM Return – SM Investment) / SM Investment Percentage
Powerful ways to increase social ROI
- Set tangible goals – Now that you know why calculating social ROI is important for your business, it is important to set some goals. For instance, if your goal is to get “x” number of leads in the next 3 months, how many leads do you wish to get from social? If you want to increase your landing page conversions like, say 20%, then you need to track how many conversions have occurred through social channels. Before setting these goals, you need to understand what your baseline is and then set incremental goals accordingly. Set goals that are S.M.A.R.T – specific, measurable, attainable, realistic and timely. Allocate enough budget to give your social marketing efforts a chance to meet its set goals.
- Choose the right metrics – Before measuring social ROI, you need to be clear of what metrics you’d be measuring. While vanity metrics that include “likes,” “retweets,” “shares” and “+1s” are good for brand awareness, they fail to present the broader picture. To calculate social ROI, you need to track metrics like reach, site traffic, leads generated, sign-ups, conversions and revenue generated.
- Make social media a team effort – In a survey, more than half of the business said that they had a single person dedicated to social media management. If that is the case, how can the company expect to bring new business through social media? A single person with limited resources is definitely not your best bet if you wish to increase your social ROI. Social media is more of team effort where an individual from every department can contribute a unique perspective to the company’s voice. Make your social voice dynamic by diversifying and creating unique and interesting content for your customers. Create multiple input points and reduce the time each contributor stays on the social platform.
- Use the social channels that are right for you – There are tens of social media sites out there and many “experts” would have you believe that you need to be on every single one of them. Well, that’s not true. You need to be on those platforms that are aligned to your business goals and where your “ideal customer” is. Before you select the platforms to be on, take time to research your customers – their likes, preferences and their preferred social platforms. So, if you are a fashion clothing business, you need to be on Pinterest and Instagram, apart from the mandatory presence on Facebook and Twitter. If you are a B2B manufacturer, LinkedIn would be a better option for you.
- Build trust through user engagement – No matter how big or small your business is you need to bring your engagement with your users to a personal level. This is what social is all about. On social media, you are not a “brand on a pedestal” This is where you “humanize” your brand. This is where you actually live your core business values. Responding to every question and comment and staying in sync with conversations goes a long way in building trust and respect and customers will love doing business with you.
- Leverage the power of social on your website – It is worthwhile to incorporate social in all your marketing and branding activities. Displaying your Twitter feed and latest Facebook posts on your website gives your website “social authority.” User reviews on your social media platforms can also be displayed in real time on your site and how you respond to customer queries and issues can help build credibility. This can bring in indirect ROI on your website.
Setting business goals and measuring social ROI is never going to be easy. Every business is unique and has its own set of issues. Calculating social ROI is an ongoing process and helps companies to quantify success and plan for the future.