How To Measure The Impact Of Social Media On Your Business

15 April 2020By Ayleesha

Social media ROI: From no idea to dead-set figures in pence and pounds

How’s your social strategy working for you? Good, bad, indifferent? Are you anywhere near securing the results you should be – results such as…

Facebook influencing 52% of consumers’ online and offline purchases

Social media leading to 45% more sales opportunities

47% of businesses say social media is very effective for marketing to the public

If you’re struggling to nail down the ROI of your social media marketing, don’t be too hard on yourself. Even professional marketers say how tough it is (60% report it being one of their most difficult social media marketing challenges of all).

Here’s how to calculate an ROI that is informed and precise (rather than based on complete guesswork).

1. Ask yourself: What is success and what are your (measurable) goals to get there?

People with written goals are 20x more successful in hitting them than those with goals stored only in their head.

How do you define success? Do you want to drive social media engagement? Perhaps you want to increase the quality of your social content. Whatever the goal, make sure it’s clear and achievable. Then break it down into the core results that signify success…

Goal: Drive social media engagement                      

Results…

• Boost comment rate by 5%
• Improve overall engagement of average profile by 30%
• Expand reach of the typical post by 50%

Goal: Improve quality of social content

Results…

• Ensure all posts fit in with your brand guidelines

2. Put down the vanity metrics and work toward ROI

“All you drunkards: put down the intoxicating Vanity Metrics”

• Mark Twain

Revenue is vanity profit is sanity. And it’s the same with social media marketing goals. Think of follower count as vanity, and the translation of these into concrete sales as sanity. In between the two, is also engagement – the comments, likes, shares and re-tweets you receive.

Engagement

“64% of marketers say that increasing audience engagement was crucial for their social media marketing strategy”.

Likes, comments, shares, re-tweets – these are all markers of engagement, and tracking your content types in terms of engagement is critical to understanding what’s working when it comes to nudging your audience along their buying journey.

Conversions

Knowing your engagement metrics is critical, but they’re no replacement for the figures that represent paid-up purchases and new customers.

Tracking which platforms are working for your conversion rate can be achieved most efficiently with Google Analytics.

Simply click Conversions > Attribution in Analytics to see where your conversions are arriving from.

ROI

Engagement > Conversions > Profit

That’s the process, and to work out how your engagement translates to profit, you’ll need to use the following calculation…

ROI =   Net profit        X 100   Expressed as a percentage.

Investment

Let’s draw on a working example. You run a Facebook campaign for a sponsored post to lead people to your flash sale. You sell 20 x £50 products, on each of which is a £15 profit. That’s £300 in profit. Based on £40 spent on Facebook adverts. Using the calculation above, that’s a 750% ROI.

3. Lean on the right collection of tools

Every social platform offers some form of analysis. While these are a solid starting point for insight into your strategy, you’ll want to flesh out your understanding with third-party tools that offer a deeper level of understanding.

Check out: Simply Measured, Sprout Social or Social Bakers, without one of these platforms or a similar tool, you’ll struggle to efficiently analyse just where you’re at with your objectives.

With the right data analysis, you can track and measure the metrics that will guide you in making the right marketing decisions and putting a figure on your ROI.

But if all the above sounds like a whole lot of data to analyse, that’s because it is (and there aren’t any shortcuts for setting up your tools either).

Prefer to cut straight to the numbers? We can help. Let’s talk.