The ROI of Social Media: Measuring What Matters
Do you know what the return on investment (ROI) of your social media efforts is for your business?
Do you know which key performance indicators (KPIs) are most important to your business and how they are tied to your business goals?
Do you know where to find these metrics?
Do you have the tools to measure them?
If you answered No to any of the above, chance are you're not utilizing social media efficiently, or effectively. Not only is the “spray and pray method” with social media not effective, but it can also cost you money and harm your brand image.
So how can you effectively measure your social media efforts to (a) make sure they produce the results you want and (b) identify the specific activities producing the best results?
You start by identifying which of your business goals social media can help you achieve. These fall under two categories:
You can then use these two sets of goals to create useful KPIs to track the ROI of your social media.
The ROI of Social Media: How to Measure What Matters
Before we dig into which social media KPIs, I want to make sure you understand what a KPI is.
KPIs are merely the results, or outcomes, you want to achieve from your social media efforts. If you put consistent time and energy into your social media activities, you need to see some definable and measurable results.
Your ultimate success requires that you answer these two fundamental questions:
What are the outcomes I want from my social media efforts?
Do I have access to the data reflecting those outcomes so I can measure success?
While there are many social media KPIs that can be tracked and measured, in this post, I'll share a few that'll provide you with insights into both the activities you're doing, as well as the results from doing them.
Remember: You can’t improve what you don’t measure.
Define your business goals
Start by identifying your business goals. If you have a business plan, go through your goals and objectives, and determine which of them social media marketing can help you to achieve. If you don’t have a business plan, think about what overall goals you'd like to achieve for your business.
Examples of business goals that social media can help you achieve include:
Increasing brand awareness
Establishing your authority on your topic
Building a loyal community
Attracting more leads and prospects
Building relationships with new customers
Maintaining and improving relationships with existing customers
Improving customer service
Next, go through each business goal to determine whether it's a 'sales goal' or a 'branding goal'.
For example, increasing brand awareness and establishing your authority on your topic are branding goals, while increasing revenue and attracting more leads and prospects are sales goals.
Some business goals can fall under both categories, like 'improving customer service'. This goal both ensures a strong brand for your business, as well as increased repeat business.
Once you have your list of goals, you need to determine which social media platforms your ideal clients or buyers are using. If a social media platform is not used by your ideal clients, it will not help you achieve your goals.
Once you know which platforms they're using, you need to determine how each platform can help you achieve each business goal.
For example, if you are a B2B (business to business) business, you can likely find your ideal clients on LinkedIn. If one of your business goals is a sales goal to generate new leads each month, LinkedIn is an ideal platform to help you achieve this goal.
Go through each of your business goals, and determine which platform is best suited to help you achieve each.
Determine your metrics
Next, assign a KPI, or a metric, to measure whether you're moving toward your goal.
Some metrics are clearer and easier to define than others - if, for example, your goal is to generate 10 new leads a month, you simply track the number of new leads you get each month.
A goal with a less obvious metric might be to increase brand awareness - in this case, if your ideal clients are on Facebook, you might look at metrics such as the number of likes your business Page has, or the views your posts are getting, as well as metrics tied to any paid advertising you undertake on the platform.
Some of the sales metrics you can track include:
Number of leads generated from social media activities
Number of appointments booked
Value of a sales pipeline from social media activities
Contract value of deals made from social media activities
Revenue generated from social media activities
Branding metrics, which are not revenue-focused but provide insights into your activities, include:
Number of views from posts or shared content
Engagement with shared content (likes, comments, shares, etc.)
Visits to your website coming from social media
Follower or network size (connections, followers, page likes)
It’s imperative to know the KPIs of social media that are most important to your business.
Create a social media strategy and action plan
Once you identify (a) your goals, (b) the platforms that will help you attain them and (c) the specific metrics you need to track, you need to create a social media strategy and action plan. This action plan needs to detail the activities to be done and the days you will do them on.
Here is a quick example - let’s say you have identified the following goals:
Generate 10 new leads per month
Establish your authority as a subject matter expert
You know LinkedIn is the most effective platform for a B2B business, and after some research, you've confirmed your ideal clients can be found there. The action plan you create to achieve those two goals might look something like this:
Review 'Who’s Viewed Your Profile' and 'Who’s Viewed Your Posts' and followers for prospects to connect with (daily)
Find and connect with five new prospects using Advanced Search (daily)
Send follow up messages, thanking new connections for accepting your connection requests or connecting with you (daily)
Reply to all messages received (daily)
Build relationships with new prospects by staying in touch and providing value to them (daily)
Post a status update that provides value to your ideal clients (daily)Send something of value to a hot prospect (weekly)
Be sure to include the frequency with which each task should be completed - it could be daily, weekly, monthly or any other frequency.
Also, understand that there's no 'one-size-fits-all' solution or system. Your social media strategy and action plan will vary depending on factors such as your:
Time and resources
Once you create your action plan, you need to implement it consistently to achieve the results you want.
As you go through the various activities each day, make a quick note of how long each action takes. You might want to do this for a couple of weeks, especially if you are just starting. As you become more competent and confident in executing your action plan, many of the activities will take less time.
Notice which activities are taking most of your time, and which can be done quickly. You can use this information, along with the KPIs or metrics you track, to help you modify your plan to ensure you are getting a measurable ROI on your social media efforts.
Measure your KPIs
Once you have your action plan in place, you need to track your activities and the outcomes they produce. Thankfully, many tools (free and paid) can help you track your KPIs.
An additional benefit of some of the tools that track your metrics is that some also enable you to schedule posts to your special media platforms, which can help save you time and make you more efficient.
You can’t always be on social media, and with the help of these tools, you don’t have to be. In one place, you can pre-schedule posts, monitor your community’s engagement and read and respond to messages.
Some great tools, free or with affordable options, include:
A great (and free) tool to measure how much traffic your social media efforts are driving to your website is Google Analytics. You can also set up Google Alerts to track any mentions of your business or brand.
As you collect your metrics, compare the results with your sales and branding goals to determine what’s working, and what's not. As you determine this, modify your action plan for each platform to improve your results. If a social media platform isn’t performing as you expected, don’t be afraid to change your activities, or even move away from the platform entirely.
After you make changes, test them, then test them again. It's vital to know what is or isn’t working.
Remember that it can easily take from six months to a year to build a social media community large enough to provide viable results on any platform. If you're interested in achieving results more quickly, you could also consider incorporating paid social ads, and/or a direct LinkedIn outreach strategy, mentioned above.
Know the ROI of social media for your business
Social media can be an incredible tool to help you achieve important outcomes for your business - but as with any other tool, using it just because you think you should be won't produce the results you want.
To be successful with social media, you need to understand how it can help you achieve the objectives most meaningful to your business. That means knowing and tracking the outcomes and KPIs that will help you define and maintain your success.
A version of this post was first published on the Top Dog Social Media blog.