Measuring the effectiveness of your social media marketing efforts isn’t impossible.
The problem is, most companies get so tied up in vanity metrics—like the number of followers on Twitter or Likes on a Facebook post—that they forget those numbers are really meaningless in the grand scheme of things. What good is a Tweet that’s retweeted 500 times if it’s not helping you reach your overall goals?
It’s time to clear the air and do a deep dive into tracking the return you’re getting across your social media channels. Here’s how you do it in three simple steps!
- Define Your Goals
Before you can get into measuring your return, you have to start by setting goals. Your goals should be quantifiable and linked to a specific campaign. In other words, they should be things that you can attach a number to. Some good examples are:
Email list sign-ups
Contact form inquiries
Downloads of a whitepaper or ebook
Notice that all of these goals are based on the user taking a measurable action that can be tracked. Specific social media actions such as social shares and followers are nice to track too, but they shouldn’t be your main goals. In order to get the the most accurate number, you really want to set your goals based on actions that convert a casual browser to a lead, and ultimately a paying customer. Someone clicking a link to your site in a Tweet is great, but you shouldn’t stop there. You have to know if they’re converting into leads for you.
- Track & Measure Your Goals
Once you’ve defined your goals, the next step is to track them. The tracking part is why it’s so important to set up goals that are based on your visitors taking action. The easiest way to track your social media goals is by using Google Analytics.
On the conversions page, click on “Set Up Goals.” This is where you’re going to set up the goal you defined earlier. If your goal was to get newsletter signups, you’ll have to setup a special thank you page on your site for after someone subscribes. But if your goal was to increase time on site for Twitter users by X%, or to get traffic from Facebook to watch a video on a landing page, you’d choose the appropriate goal type.
For this part, you’re going to enter the actual destination URL that you want to trigger a conversion. Make sure this page is not indexed in Google so that the only way for someone to land on it is by going through your email signup process. Otherwise you could potentially mess up your data.
Then, you have the chance to attach a value to each conversion. To figure this out, you can use:
Lifetime value x conversion rate: Calculate the lifetime value of a customer, and multiply that by your conversion rate (average number of email subscribers who become customers) to find out what the potential value of each visit is.
Average sale: If the goal of your campaign is to try to get sales, then you’ll want to calculate your average sale amount and set that as the value. In this case, your destination page would have to be the page that shows up after a customer completes a purchase.
Lastly, if you have a specific funnel that you created, you can set that up here too. After you have everything completed, you’ll be able to see your conversions and the actual amount earned from those conversions.
- Your Social Media Expenses
In order to figure out whether you’re getting a positive or negative return on your social media marketing campaigns, you’ll also have to measure how much you’re spending. Here’s what should be included in that number:
Man-hours: Your time is valuable. Whether you’re a solopreneur, or you have a social media team, add up the man-hours that go into a specific social media marketing campaign over a specified period of time. Don’t just use an employee’s annual salary, because they’re more than likely going to be working on several projects throughout the year. Measure this investment per-campaign.
Content: Did you get a landing page written by a professional copywriter? Or maybe you outsourced status updates. These costs are easy to overlook, but they count.
Social media tools: Using Facebook and Twitter is free, but if you’re using a tool like Sprout Social or other social media management software, you need to add those costs in. Just like with the man-hours, you should calculate this on a per-campaign basis. So if your campaign lasts for one month, only add in the cost of a month of the software, not an entire year.
Ad costs: If you’re running a Promoted Tweet, Facebook Ad or boosting a Facebook post, add in that cost as well.
Once you have your expenses calculated, you’ll be able to calculate your ROI for each social media campaign with this simple formula:
(Earnings – Costs) x 100 / Costs
You can figure out the specific ROI of each social media site by segmenting your earnings and costs per social channel, and using that same formula above. After looking at the numbers, you’ll be able to decide which social platforms are doing the best for your company and focus in on those. For any social sites that are bringing in a negative ROI, you can either try to adjust by spending less or by making your campaigns more effective.
Tracking your social media ROI isn’t impossible. You just have to take a planned and strategic approach. The more organized you are, the more accurate your numbers will be. And as you start to create multiple campaigns, you’ll be able to fine tune your numbers, like the LTV of a customer and your expenses.
One thing that you should also keep in mind is that social media gives intangible benefits as well – like brand building or earning natural backlinks from people who find your site through a Tweet, and deciding to link to it on their own site. That might not add up to a measurable monetary value, but it’s definitely something that you have to factor in when determining whether social media marketing is helping your company.