How Are You Measuring Social Media ROI?
Are you measuring ROI (return on investment) on your social media efforts? Many businesses are not, so how do you justify the time you spend nurturing relationships and building a community?
One of the reasons many forget to measure the ROI of social media is that it isn’t as straightforward as it is with other forms of marketing. Take SEO for example – if you know your clickthrough rate, your conversion rate and your average sale price, then you can place a £ sign on how much a particular keyword is worth to you.
You can do a similar thing in social media, but not for all of your activities. At a very basic level, you can measure the ROI from a tweet, a Facebook post or a LinkedIn status update:
- How many people clicked on the link you shared?
- How many of those people went on to convert?
There you have it, you’ve measured how much your tweet was worth. The only complication here is calculating conversions, and for that you’ll need to set up goals in your analytics tools, but that’s a subject for a different post.
But, how do you place a value on the relationships you’ve built? On the things you’ve learnt from others in the industry? On the brand building that has taken place? While these and other outcomes of social media engagement do indeed result in more business, you cannot assign value to them as it would be virtually impossible to do.
Take networking (offline) for instance. Outside of instances where you’ve met someone who directly turned into a client or partner in some way, how do you measure the ROI of the time you’ve spent networking? You may have built a name for yourself, a reputation for your company, created awareness of your brand as a whole; these things may result in business in the future, but you similarly cannot affix a value to it. Yet, we know it’s important, and we know it’s an activity we should take part in – we are aware of the potential benefits it can bring.
This is the same attitude we should be taking to social media. This isn’t to say we shouldn’t be tracking traffic and conversions in the way described above, because this is crucial too. Clients demand to see quantifiable results and you need to be able to demonstrate that their money is going toward something that is ultimately profitable. Without quantifiable results, how can you optimize and improve your strategy? You need data and you need to know how to make something out of it.
But you need to think of social media (and explain it to clients) in a broader way than that, because otherwise additional value and merit in growth as a social business may be overlooked.
How do you measure ROI for your social media efforts?
Do you think we should focus solely on that which we can place a direct profit value on?
Let us know in your comments below!