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How to Accurately Measure Your Current Social Media Marketing ROI

A good social media marketing strategy transforms your business and yields a measurable ROI. It’s an effective way to promote products, connect with customers and establish yourself as an authority. But to know when your strategy is actually good, you need to be able to measure its impact. You must answer the question: are my efforts succeeding in helping me achieve my business objectives? However, the answer entire depends on how you manage your social media.

Demonstrating the effectiveness of a social media marketing campaign is critical. First, it makes it much easier to be successful in future campaigns. But it’s also helpful in demonstrating the effectiveness of your marketing efforts on the bottom line. This can be very important when you have to ward off robots to keep your job.

However, measuring the effects of your social media strategy is much easier said than done. It’s hard to align expectations with what’s possible. And it’s equally challenging to distinguish social media’s impact as compared to your other digital marketing efforts.

Here is some information on how to accurately measure your social media marketing R.O.I.

Start by being clear about what you want

The first step is specifying exactly what you want from your social media marketing. There are many things a good social media strategy can accomplish, but common goals are:

It’s key to have all relevant stakeholders on the same page for this part. You don’t want a boss or client expecting one thing and getting another.

Doing this first will also make it easier for you to zero in on specific metrics. Specifically, you’ll be able to more clearly identify your Key Performance Indicators (KPIs).

Choosing the right things to measure

Determining your KPIs, and making sure you’re using the right ones, is the next step in this process. You’ll need to distinguish between financial metrics, or more intangible measures, such as awareness, engagement, loyalty, etc.

From there, you’ll want to choose which data to collect to demonstrate performance towards these goals. For example, to measure social’s effects on sales, you may want to consider keeping track of the following metrics:

  • Conversion rates. How does social compare with your other efforts in converting people into customers? Being able to show a meaningful jump in conversions is a powerful way to demonstrate your efforts are working.
  • Average lifetime value. How much money do you earn from each customer? Effective A/B testing can help you see the impact of social on this key metric.
  • Average sale. How much money does a customer typically spend when they come to your website? It’s important to accurately benchmark this figure to get meaningful insights about the effectiveness of your social efforts.
  • Ad equivalency. Comparing what it costs to market on social media to other channels is an effective measure of social media marketing R.O.I. If it costs less than other tactics but produces the same or better results, you’re on to something. But being accurate about how much social marketing costs is important. You need to include things such as time spent creating content, doing outreach, responding to inquiries, etc. for your measurements to be accurate.

To measure less-tangible objectives, you could focus on metrics such as,

  • Brand recognition. Benchmark awareness by conducting a survey of your target market. Do a similar study after the campaign is over and compare the results.
  • Customer perception. This is a similar process, but this time you’re measuring how people view and understand your brand. Social campaigns should strive to change perceptions or introduce new ones. Be sure to include this on your surveys to be sure you’re measuring the right things.
  • Engagement through shares. Shares by themselves aren’t a strong enough metric to demonstrate social media marketing effectiveness. But they are useful in measuring overall R.O.I. Sharing symbolizes an endorsement. You’ve managed to initiate an action. This is no small feat in today’s noisy and competitive social world. Thus, it’s something to record when looking for the impact of your social media marketing campaign.

 

Using the right tools

Most of this is theory behind how to accurately measuring social media marketing R.O.I. All important stuff. But now it’s time to look at how to do it for real.

Here are a few solid must-have tools for accurately measuring social media marketing R.O.I.:

  • SurveyMonkey and Google Forms are both really easy ways to gather data from your audience. They help you create professional surveys you can use to benchmark. Both services will record all different types of data so that you can easily see and interpret results.
  • Google Analytics will help you track where traffic and conversion originate. This could not be more useful, as it will allow you to pinpoint the impacts of your social marketing efforts.
  • DrumUp has a variety of features focusing on creating and understanding the impact of social media. If you use one, such as DrumUp analytics (in unison with say a custom URL builder), you’ll be able to distinguish which aspect of your social media strategy is having the biggest effect. For example, did people come to your site from paid ads? Or did they come from one of your own posts? Or maybe from some other social media presence who shared or recommended your brand? These are all important questions to answer when measuring social marketing R.O.I.
  • Facebook Pixels is a piece of code you add to your website to track how well your Facebook ads are performing in driving traffic and conversions.
  • UTM parameters are also pieces of code you add to your website to help track social media effectiveness. You can get data about really broad metrics, such as an overview of which channel is performing the best. Or, you can get information about the effectiveness of certain pages. It’s all very useful stuff.

Start measuring. And don’t be discouraged by results

With the right approach and the right combination of tools, you can begin accurately measuring the R.O.I. of your social marketing strategy today.

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Image via Unsplash.com

However, one final point about R.O.I and showing off. It’s natural to want to demonstrate how successful we’ve been in our efforts. But sometimes being able to definitively say something doesn’t work is just as valuable. It will help make the path forward much clearer.

Either way, knowing how well your social marketing strategy is performing is key, and hopefully, these tips have shown you how to do it.

About the author: Raj founded and runs JavaPresse, a successful eCommerce business delivering specialty coffee. He frequently writes content about social media and other digital marketing to help stimulate discussion and generate new ideas.

Recommended reading:

Using Google Analytics: An Essential Guide for Social Media Marketers & Small Business Owners
Social Media Analytics Guide – What & How to Track
Top 55 Social Media Analytics Tools
What a Profitable Social Media Marketing Strategy Looks Like (with 4 Real Examples)

Feature image by @awesomecontent via Freepik.com