This is a guest post by Lior Levin at Producteev.
3 Essential Tips for Measuring Social Media ROI
When a business invests staff time and cash into a social media campaign, the expectation is that an increase in revenue will result. However, every business has a limit to its resources, and efforts without a clear ROI will be scrapped sooner or later.
How can a social media manager or marketing manager determine which social media efforts are working and which are ineffective? Here are three tips for measuring social media ROI.
Potential Is Impossible to Measure
Hal Thomas of CFG Communications suggests that it’s nearly impossible to measure a clear ROI for social media since it functions more as a vehicle for opportunity, much like handing out a business card. He recently shared , “Like a Facebook fan or Twitter follower, a business card merely represents potential — so, you can’t accurately measure the ROI of a business card, just as you can’t measure the value of a Facebook fan.”
Conversion rates for particular activities on social media may provide the most helpful metrics for marketing departments looking to track their social media efforts. In other words, if you’re linking to a particular promotion on your website, track the sales and page activities linked to that promotion. However, there are benefits that come from social media that you can’t always track and quantify.
Measure the Right Things
Links, shares, and likes are just a starting point for a return on social media campaigns. While earning the good will and attention of your customers is great, you need to convert that attention into reaching your business goals. Dexter Bustarde shares on Mashable, “When you earn yourself a Facebook Like, you’ve successfully opened up a line of communication with a potential customer and his or her friends. What you communicate after that is where we should look for real lasting success.”
ROI is a business metric, not a social media metric according to Olivier Blanchard, author of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization. In other words, if you can measure links and website hits, you’re not actually demonstrating a return on investment for the time you spend on social media.
Blanchard, who also blogs at The Brand Builder, suggests starting with a baseline of revenue, new customers, and transactions, tracking social media efforts on a timeline, and then overlaying the three over a period time.
How to Track Your Social Media Activity
As you organize social media campaigns, a key to determining your ROI is determining which posts and tweets are driving traffic to your site so you can make these trends to your sales numbers. In fact, very few companies have successfully managed to transition into optimizing their social media data based on their reports from services such as Atlas or Dart. Here are some options for effectively tracking your social media activity as you match it up with your sales goals and income results:
Social Too tracks your activity on Facebook and Twitter. The premium service provides additional stats and tracking tools, though the free tool is still quite useful. Users create a Social Too vanity URL that visitors to your Facebook page are routed through. This will help you know how many people have clicked on your links, where they came from, and more.
Hootsuite is another great social media tool that can manage Twitter, Facebook, and LinkedIn all in one place, while also providing reports on the responses to your status updates and which ones were clicked. At the end of each day, use Hootsuite to create a customized report on your social media activity for a specified period of time.
ThinkUp is a powerful and completely free tool that enables you to analyze your social media data. While you’ll need to host ThinkUp on your own server, the data it provides is quite comprehensive and easy to customize with maps, graphs, and spreadsheets. It comes highly recommended for Facebook especially.
Before your CEO hands you a pink slip for poor social media ROI, invest in tracking your social media activities, performance, and correlation to sales and customer activities. You’ll not only demonstrate the value of your work, you’ll also learn what works so that you can improve your overall effectiveness on social media.
About the Author: Lior Levin is a marketing consultant for an inspection company that offers preshipment inspection services and who also consults for a company that provides a task management tool for businesses and individuals.
How do you measure social media success and ROI?
“When you earn yourself a Facebook Like, you’ve successfully opened up a line of communication with a potential customer and his or her friends. What you communicate after that is where we should look for real lasting success.”
That’s the key here. It’s not what a ‘like’ or a ‘fan’ is worth…it’s what you make it/her/him worth.
Also, there are companies out there like The Echo System that are bridging the gap between social metrics and true business ROI. Full disclosure: I’m a co-founder.
Solid article, Lior.
Great tips – and thanks for the Hootsuite reminder. I use it daily, but keep forgetting about the reports.