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Social media is becoming more and more relevant in the marketing industry.
Besides big brands like Dell, Whole Foods, Pringles and Zappos, many small businesses are pouring time and money into this new media.
However, the big brothers didn’t just throw their money in without sophisticated matrices to measure their ROI. But how about us, the small beings? In this article you will find some ways to go about measuring your ROI.
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Define Your Business Goals
To successfully anchor your ship to the correct shore, you have to be clear about your business goals right from the start. There are independent measurement methods catered to different business goals, such as those below:
1. Web Traffic & Sales
Google Web Analytics is really useful when it comes to measuring traffic and sales. It also provides you with valuable insights on your traffic sources. The data collected in the table below is gathered from Google Analytics, telling you clearly how many visits to your website did each source bring you.
Say if you invested $3,000 on social media marketing per month and assuming your sales conversion rate is 0.5% and your average unit profit is $50, your ROI calculation would look like this:
• Cost Per Click (CPC): 3,000 ÷ (82,284 + 52,465) = $0.022 (Probably cheaper than an Adwords Campaign)
• Converted Clicks: (82,284 + 52,465) x 0.5% = 673
• Total Sales: 673 x 50 =$33,650
• ROI: 33,650 ÷ 3,000 = $11.21 per dollar invested
With Google Analytics, you can see which geographical locations your traffic sources are from, the percentage of returning visitors, drop rate and et cetera. How you use Google Analytics will very much depend on how you want to measure your ROI.
2. Your Customers’ Satisfaction on Social Media
Like MailChimp, if your Twitter account (or any other social media sites) is used for Customer Service purposes, a simple survey would be sufficient to measure customer satisfaction.
Google Docs is a great platform for conducting surveys. You can create a simple and yet stunning online survey form to help you track your results. Google Docs will help you tally the data nicely on a spreadsheet!
3. Your Branding Effect
Branding, as always, is hard to quantify. But with real-time searches on Facebook and Twitter, quantifying the number of updates that contain related keywords could give you an inkling of how much influence your brand has in the respective communities.
It seems that Apple enjoys greater buzz in Twitter (474 counts) than in Facebook (4 counts). This result is collected in 15 minutes
Numbers are not the only thing that you should be concerned with. You should draw out a couple of sample updates to track if it involves something positive or negative. Be sure to react fast if you sense negative vibe spreading across the social media realm.
Summary
There is no perfect solution to measure social media ROI. Measurements vary according to the company’s objective and what was presented were some generic ways to measure common objectives.
Do not follow the methods blindly. Alter it to suit your needs.
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Tags: ROI, Social Media
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Willis Wee
