5 Ways to Measure Social Media ROI
It’s clear that there’s no single easy way to measure social media ROI. However, combining several different methods may get you the results you need.
1. Direct Method
The clear path exists for social media marketers who use social media in a direct selling way. It’s pretty straightforward to set up your web analytics tools to segment the visitors arriving from social media sites and then analyze if their behavior or conversion rates are different from other visitors. You can check out my posts about How to Tag Social Media Links for Google Analytics and Measuring Your Social Media Success with Google Analytics.
The problem here is that not all marketing is direct and if you don’t have financial goals on your website there’s no direct R or return on investment.
This means you need to consider indirect metrics like leads from website, sales volume over campaign period and other tactics that may also be influenced by other marketing channels besides social media. If your website’s goal is a lead then you need to analyze which leads convert to sales and what were the referring channels.
2. Sentiment, Share of Voice
One indirect method to estimate social media marketing ROI is to measure brand metrics. Number of mentions, sentiment, share of voice are a few indicators that can be measured quantitatively. These numbers can then be correlated to sales figures. If sales and social brand metrics move in unison then there’s a causal relationship. You can test that hypothesis by changing you social media marketing activities and measuring resulting changes in sales.
3. Isolated Campaigns
Another simple solution would be to run social media test campaigns when there are no other marketing activities in the target market. If you see lift in results the you can attribute all that to your social media campaign.
Isolating social media campaigns might not be possible so here are some other options to see the connection between social media marketing and financial results. To do that yo might want to start from the other end of the sales funnel. Look at the people who have already purchased your products or services and try to determine how much social media channels influenced their decision.
4. Segmenting existing customers
Segmenting your customers by different marketing touch-points will give you insights to the effect that your social media marketing activities have on your business. For example, we get a lot of feedback from new clients that they started to consider us after reading our blog posts that led to joining our newsletter and eventually becoming a paying customer. Look for ways to find out what channels influenced the purchasing decision and compare social media results with other channels.
5. Connect Loyalty Programs, CRM and Social Media
To reach the master level make connecting through social media a part of the loyalty programs. This way you can see how people who have indicated their social media connection behave differently from other groups. Create incentives for people to indicate their social media presence and connect to your brand. Next step from here would be a full-blown CRM system that includes social media interactions, purchase information and other key information about your customers. This will make social media marketing ROI a real dollar value for your business and you can also bridge the cap between on and off-line interactions.
This is how you get to social media ROI in sales. Similar techniques can be used to evaluate value of employee retention, saving HR cost, money saved in development, etc.
We will be posting more insights about measuring content marketing and social media ROI. Sign up for our social media marketing news and we’ll let you know.
Some of our other posts about social media marketing ROI:
- Social Media ROI Backwards (for B2B)
- How To Measure Social Media ROI
- Planning Social Media Resources
- Where is the Money in Social Media (ROI)?
- 48 Social Media KPIs (Key Performance Indicators)
- The ROI of Social Media [Infographic]
- Social Media ROI [SLIDES]
- Socialnomics: Social Media ROI video
Recommended book: Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization. Use this book to bring true business discipline to your social media program and align with your organization’s goals. Top branding and marketing expert Olivier Blanchard brings together new best practices for strategy, planning, execution, measurement, analysis, and optimization. You will learn how to define the financial and nonfinancial business impacts you are aiming for–and achieve them. Practical solutions from structuring programs to attracting followers, defining metrics to managing crises. This book will help you gain more value from every dime you invest in social media.