In today’s world, a compelling marketing plan must include social media. While social media platforms have transformed the digital advertising landscape, the metrics key to successful campaigns are still elusive.
For most businesses, seeing high numbers of followers or likes is an easy metric to decide how well their social media campaign is doing. However, in the long run, these numbers are meaningless, especially when it comes to your return on investment (ROI).
So, with that in mind, we want to take a closer look at social media marketing and help you create a better method for measuring ROI.
STEP ONE: WHAT ARE YOUR GOALS?
Whenever you start a new social media campaign, you should have a clear and definitive idea of what you’re trying to accomplish, commonly called SMART goals. SMART goals are Specific Measurable, Attainable, Relevant and Time-bound. Examples include growing overall sales on your website, increasing your conversion rate, raising brand awareness or building your newsletter list.
Knowing specifically what you’re trying to measure will help you successfully measure your ROI in social media. So, whatever your goal, make sure that it’s quantifiable. Site visits, sales numbers and email subscribers are all hard numbers that can then be calculated into money earned. If you have a nebulous goal in mind, figuring out your ROI will be next to impossible.
STEP TWO: LEARN HOW TO ANALYZE YOUR NUMBERS
One of the greatest tools at your disposal is Google Analytics. This online platform allows you to track data from a variety of sources, including social media. Additionally, many social sites like Facebook provide stats for your profile.
There are several great resources to help you make sense of this data such as A Beginner’s Guide to Facebook Analytics from Hootsuite and the Google Analytics for Beginners course from Google Analytics Academy. Overall, the purpose of using these tools is to provide a foundation for measuring ROI quickly and accurately.
STEP THREE: DETERMINE YOUR INVESTMENT
To make sure that your time, effort and money are paying off, you should first understand what you’re putting into your social media campaigns. Consider the following factors:
- Hours Worked: The more time you or your team invest in setting up, managing and monitoring your social media campaign, the more it affects your bottom line.
- Content Creation: In many cases, you may outsource your content to third-party services. For example, hiring a professional photographer or copywriter.
- Social Software Plans: While it’s free to set up social media accounts, there are many time-saving apps and management tools that cost money.
- PPC Ads: Pay-per-click (PPC) advertising is an excellent way to budget your marketing campaign. Since you only pay when someone clicks on your link, you can manage your investment and ROI more easily.
STEP FOUR: CALCULATE YOUR EARNINGS
Now it’s time to put everything in terms of dollars so you can determine how your goals will impact your bottom line.
Keep in mind that unless your primary goal is sales, then you’re working with projections, not actual stats. Here are some examples to help you get started:
- Lifetime Value per Customer: How much do you earn from your average customer? This will be a benchmark when converting leads into sales.
- Average Sales Visit: When people shop on your site (or in store), what’s the average sales ticket?
- Conversion Rate: How many leads turn into customers?
No matter what your social media goals are, the end result should be money spent with your company. To do this, you’ll need to find a way to quantify how many of your social leads and engagements turn into paying customers or clients.
For example, a promoted Facebook post that drives traffic to your website can be expected to net you a specific number of sales per click. If you get 100 clicks and have a 5% conversion rate, each post should gain you five new customers. If your lifetime value per customer is $85, then your promoted post should generate $425 in sales per every 100 clicks.
Let’s say your goal is more nebulous, and you want to increase brand awareness. In this case, measuring ROI in terms of dollars and cents might look like this: First, determine how many of your current followers shop from your website on average — this will be your benchmark for determining ROI. From there, you can calculate how much ROI you should net from gaining X number of followers per week or month. If you’re not hitting those goals, it’s time to re-evaluate your social posting strategy.
BOTTOM LINE: KNOW YOUR NUMBERS
Analyzing your social media marketing on a regular basis using SMART goals will help you determine what is (and isn’t) working for your brand.
If you have questions about calculating or increasing your ROI in social media, contact Stitchcraft Marketing today, and we’ll help you craft a better business!