Social Media Strategy: Measuring ROI From Social Media
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Social Media Strategy: Measuring ROI From Social Media

Hi, I’m Daria, the product
manager for HubSpot’s social media tools. We talk a lot about how your
business goals need to align with your social media goals. There are a number of metrics
you can measure to determine your return on investment, but
having a system in place for how you’re mapping social actions to
those business goals will make it much easier. Most marketers are measured by
how their programs and campaigns perform in generating leads and
revenue. While positive brand sentiment
and a high level of customer service are important, your boss
wants to know that the time you’re spending on social media
is actually translating into leads and customers. Essentially, revenue is the
ultimate indicator of social media marketing success, but
depending on your sales cycle, it can be months before you’ve
closed new customers from a social media campaign. Because of this delay, it’s
important to use leading indicators of revenue success,
such as the following: Sign-ups for email, webinars,
and events: At HubSpot, We even have people sign-up for
reminders about our live events. Product downloads and trials.
Purchases: How many people buy your product or service as a
result of an action in social media? Downloads of marketing
materials. Your visit-to-lead conversion
rate: We love this one! Of the social media traffic that
you’re generating, what percentage of those visitors
become leads? Sentiment analysis: How the
internet feels about your brand can be an indicator of
satisfaction, passion, and loyalty. Competitor benchmarking. Understanding how you stack up
against your competition can help you pivot and make better
business decisions. Website traffic. Reach and
engagement: This includes likes, shares, and comments. Audience size And finally,
campaign results. Dennis Yu, the Chief Technology
Officer of BlitzMetrics, tells us: The most important thing to
keep in mind when measuring social ROI is using the same
metric that you use for all the other channels. So you’ve got goals, content,
and targeting for your business. Maybe the goal is ROAS with a
revenue counterbalance. Maybe it’s number of leads
versus a cost-per-lead. Maybe it’s a particular product
launch that you’re trying to get in front of a certain audience
at a certain recall rate. The same metrics that you use
for any other channel should be the same metrics, shouldn’t they
be, for social? It’s a question of how do you
measure that? To take a deeper look at how
social media could affect your business’ key performance
indicators, or KPIs for short, here are some examples: Lifetime value: How much revenue
do you earn, on average, from a customer? Lifetime value multiplied by
conversion rate: How much is each potential visit worth to
you based on the percentage of visitors who convert? Average sale: How much is the
average purchase from social media into your website? Pay-per-click ad valuation: How
much would you end up paying if you were to use ads to achieve
the same social media results? Resource savings: Were you able
to have a customer take an action in social that will save
the company money elsewhere? For example, watching a video or
receiving a social media response rather than a lengthy
call into customer support? You’ll also want to be tracking
your social media expenses so you can calculate ROI against
your marketing campaigns. Here are some things to track: Work-hours. Agency or freelance
costs. Social media software and
services. Content development expenses. Advertising costs. Once you understand what your
social media efforts cost, map those expenses to your
social media campaigns to determine your ROI,
return on investment. The ROI of a social media action
is calculated by dividing the net income by the cost of this
action and multiplying it by 100. For example, let’s say a
business invested $2200 dollars on a social media campaign to
promote a new product on Facebook and Twitter. Once they completed the
campaign, they found they made $9,500 in profit. The calculation for ROI would
look like this: 9,500 / 2,200 x 100=432% ROI
How awesome is a number like that? While we might not all be
able to achieve this sort of success, you’ll never know
unless you are tracking your efforts. It’s also possible
you’ll find that your ROI is negative. If so, you’ll want to
adjust your campaigns or make changes to future campaigns
based on your learnings. And finally, make sure that you
report your findings back to your team and to your
executives. When it comes to measuring
return on investment, the benefits are endless. Brands can find new fans,
customers and leads, adjust campaigns to be more effective,
and shift spend toward programs that will be more beneficial to
the business.

About Ralph Robinson

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6 thoughts on “Social Media Strategy: Measuring ROI From Social Media

  1. In today's competitive social media world, measuring social media ROI is no longer permissive— it's necessary.

  2. Great video! The Promo team recently wrote a blog about social media metrics that could be helpful to people looking for another resource related to this topic. Check it out here:
    Hope it helps and happy reading!

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