Sahail Ashraf posted on 25 October 2022
It’s easy to work in a vacuum. But you need to make sure that the hard work you are doing is bringing results. In this post, learn how to identify your ROI on social.
No matter how hard you work on your social media marketing, it’s important to be aware if it is working or not. There is only one way to know whether or not your efforts are paying off. By measuring your ROI, you can assure yourself and stakeholders that the creative effort you make translates into increased engagement and revenue.
How do you do it? Try the following methods.
The problem with ROI on social media is that every organisation is going to be different. You may have social media channels set up for a variety of reasons. However, as soon as you know what the business wants to achieve from social, you are on the first step to measuring ROI precisely.
What does the business hope to achieve? Most companies want to achieve one or more of the following outcomes from their social media marketing:
The next step is to work out the conversion rate of the various outcomes.
You may simply be looking for an expanded reach through social media. This is happening when your reach (number of followers and fans) increases. This is an easy conversion to track because you can see quite easily that you are gaining followers for example.
If your goal was to increase traffic to your website or a page, you can easily see if things are happening by monitoring traffic to your website.
Working out whether or not you are getting a good ROI through conversions like this is something we will look at in the next section.
If you have set up your social media marketing so that visitors are signing up to forms on your site or pages, then if you see an increase in leads gathered in this way, conversions are happening.
If you’re able to assign a monetary value to a conversion you can work out if you are receiving ROI. Let’s say a customer comes to your site and buys your product (we are assuming you may have one product). How much does that product cost?
A simplified way of working out your ROI is giving a number to the increase in traffic to the site and then a number to the conversions. Then you have to work out the cost of gaining those conversions.
How many hours of work are required to gain a conversion? Think of the people working on campaigns and their hourly salary. If you add in the cost of any advertising you used as well you start to get a picture of how much a conversion actually costs.
If the work on the campaign brought in 1000 extra site visitors and 10 converted and bought your product, simply take the costs away from the revenue that came in from the conversions. This way you will know how much it costs to have one single conversion and whether the social media work is cost-effective.
This works with all your social media activity. If you know the goal you are trying to reach with the work, and the conversion indicator, all you have to do then is work out how many conversions happened and then compare the revenue to the cost of getting the conversions in the first place.
Are you in social media marketing? That’s great. You need Locowise to help you navigate the stormy waters of social media. It has all the data you need (including reach, for example) on your posts so you can make informed decisions.