The biggest lie in social media marketing is that it can never produce an ROI. This myth is especially peddled to small businesses who don’t have massive marketing budgets and cannot afford to waste their time on unproductive efforts that don’t impact their bottom line. As for those entrepreneurs who say that social media has been a waste of time, they probably didn’t plan and execute their campaigns correctly.
Fact is, campaigns do deliver tangible results that have a link to profits. If one of your campaign goals is to increase brand awareness, initiatives aimed at driving awareness can be measured in terms of a short-term increase in engagement and purchase actions.
ROI is a Financial Metric
When it comes to social media marketing, ROI must be treated like how it is for any other business activity – as a financial metric, in terms of cash. The result of efforts should be reflected in dollar terms. Your key posts may be retweeted hundreds of times and your Facebook fans may double within two months. But unless these results are contributing to sales and profit, the return on your social media investment is essentially zero. It is critical that your campaign’s measurement system quantifies results/performance in terms of dollar value. This isn’t easy, by any means, but definitely achievable.
Define Your Campaign Goals and Measure Their Results
If you don’t know what your goals are, how will you know what to measure, and evaluate the effectiveness of your social media efforts? It is quite common for businesses to have some sort of social media presence – create a campaign even – without defining performance targets. Without much clarity on metrics and results, it is impossible to determine the kind of content and strategies that are working and what is not.
Social media experts advocate this simple three-step process when developing and implementing a campaign:
1. Quantify what you want to achieve
The goals from your campaign can be online purchases, link clicks, filling up your contact form, newsletter sign-ups, downloading your ebook, etc. Is there a monetary value that can be attached to the specific goal(s)? You can calculate average sales on your site, the average earning from a customer (lifetime value) or the average sale on your site. You can also calculate how the costs of these social media efforts compare against paying for ads.
Also consider the investment in your social media efforts. This will be a measure of time (the per hour labor costs multiplied by the number of hours dedicated to social media), the social media tools you will be using, and if you’re going to advertise on social media sites, the total spend across all networks. The sum of all these costs will represent your total investment.
2. Set your performance targets in advance
Specific the goal you’re aiming for over a time period. Do you want to increase your newsletter subscriptions by 20% over a one-month period? Are you looking to answer all Twitter queries within 24 hours every day and increase the number of followers to 200 within three weeks by leveraging employee advocacy platforms?
By establishing performance targets in advance, everyone involved in your campaign will know
what they need to produce. It will also help you understand if your goals are realistic or if you’re not raising the bar high enough.
3. Determining a way to measure results
After setting targets, you have to measure the campaign’s performance. A tool that captures the data and applies suitable analytics that enable you to make sense of that data is obviously necessary. These tools must be in place before you execute your campaign so that you can manage it and make changes seamlessly.
Quantitative and Qualitative Data
Quantitative data is numeric and employed in scientific analysis. As the measurements are objective and quantifiable, the results are easy to understand.
Number of fans and/or followers : A common metric tracked by brands, this is mostly a vanity metric, but not one you should be dismissing. If a rise in the number of Twitter followers is tied to an increase in the number of blog readers and RSS subscribers, this metric becomes instantly meaningful.
Engagement : This gives you an idea about how your content is faring among your target audience. Is there a healthy response – such as Twitter mentions, retweets, replies, favorites – or do you need to tweak your content strategy?
Timing : Your posting strategy should factor in the times when your target audience is most active. If you sell to a global audience, you may need to schedule your posts after or beyond business hours. Busy entrepreneurs use DrumUp, a social media management app that curates and schedules posts on Twitter, LinkedIn and Facebook.
A look at the timestamps on comments and other activities will give you a rough idea about peak times, but you should also consider a suitable analytics tool.
Click-through rate (CTR) : If one of your social media goals is to drive traffic back to your website, CTR is a key metric to track. It can be viewed as a social conversion metric that you can optimize to boost traffic, page views to key product/service pages, and brand engagement.
Qualitative research uses observation as a data collection method. It usually involves framing hypotheses from small sample sizes and testing them using quantitative data.
Influence : Influencer outreach is a common strategy employed by businesses to promote to a wider audience. Besides looking at Twitter rankings, you can invest in a tool that measures social influence, while also taking note of influential bloggers, analysts, authorities and connectors in your industry.
Sentiment : Sentiment analysis is a good way to understand the reaction to your social media posts or campaigns. At the very basic, this involves evaluating the tone mentions and assigning them a score such as ‘positive’, ‘neutral’ or ‘negative’. There are a number of sentiment analysis tools that you can leverage to gauge people’s attitudes towards your campaign.
Popular conversations : You will want to know what topics are driving conversations, in the context of your industry/niche, your brand, and your competitors. These insights can help you understand what you’re doing right or wrong, give you valuable intel on your competitors, and open up opportunities to join conversations and demonstrate your expertise.
Image Credit : Pixabay