Measuring Your Social Media ROI
If you've added social media to your marketing mix, you're probably asking yourself, "Is it worth all the time and effort involved?" That might seem like a difficult question to answer at first, but there are definite steps you can take to measure the return on your social media investments.
** What Are You Trying to Do?
First and foremost, you need to determine what your actual goal is. Are you trying to create brand awareness, generate sales, find joint venture partners, communicate with customers?
These are all worthy goals, but they will be measured and achieved very differently. So, if you haven't thought about it yet, schedule a brainstorming session with your team to discuss exactly why you're involved in social media and what you hope to get out of it.
** Choose Your Measurement Tools
Once you've determined your overall goals, it's time to put tracking and measurement tactics to work. How will you track the actual results you are receiving from your social media efforts? The most obvious (and probably the easiest) tool is your traffic program.
In order to measure traffic effectively, you will need to lure the conversation back to your website and use a dedicated landing page for each individual source. That way, not only will you be able to see where your social media traffic is coming from, but you'll also be able to see which sources are providing the most valuable traffic.
Let me give you a quick "for instance" of how this works. We recently set up dedicated landing pages for our client Dean's social media efforts. We created tracking codes for his traffic sources in order to trace the prospect throughout his lifecycle with Dean. By following traffic patterns and ultimate destinations, we were able to determine that Dean's Facebook traffic is 34% more valuable than his Twitter traffic. Now, when budget is low or time is short, Dean knows to focus more of his effort on Facebook than Twitter.
Some social media goals are harder to measure, such as brand awareness or name recognition. You will need to decide which tools to use and what to track in order to measure any goal that does not involve sending traffic to your website.
A few ideas might include:
• The number of times your posts are retweeted on Twitter
• The number of friend requests and/or friend suggestions you receive on Facebook
• The number of targeted group invitations you receive
• How often your blog posts are posted to delicious, stumbled upon, digg, etc.
• How many new inbound links your website gets
• The number of times your blog posts are being published elsewhere
• The number of trackbacks your blog receives
** Don't Quit Tracking Too Soon
The time it takes for your social media traffic to convert can vary across sources. It's a lot harder to build up the "know like trust" factor in 140 characters (such as Twitter) than it is with pictures and posts and back-and-forth conversations (such as Facebook). Give yourself adequate time to thoroughly track and measure the effectiveness of a social media source, attach a timeframe to each of your goals, and don't abandon an effort too soon.
It's also extremely important to always keep in mind the lifetime value of your customers. If your typical customer is worth $100, but you're spending $120 worth of time and effort to bring in that customer from Twitter, you might be able to determine that those efforts are not worth it. Take advantage of auto-pilot marketing tools wherever they are applicable.