If you’re looking at Social Media Networks to help you expand your business, you are not the only one to follow the trend. Social Media is a new phenomenon that has gripped the world and we all think of using it to enhance our visibility and popularity. But besides intangible benefits, social media efforts can bring us measurable results too, and we can really calculate the return on investment of our social media campaigns.
If you’re thinking that social media campaigns are just for creating brand awareness or building some reputation, then it’s time to come out of your misconception. You can use social media to generate business leads and increase your revenue too, and you can measure the ROI as well. And there could be a few simple steps to track the ROI and assess the success of your social media initiatives.
Do you have a distinct conversion goal?
If you want to measure the ROI of your social media efforts, you need to define clear and distinct conversion goals. This may vary from organization to organization, but ultimately it can help you measure the monetary results of your efforts.
You can set the conversion goals as: number of online purchases, registrations for newsletters, number of member signups, number or referrals, number of social sharing and other such measurable goals.
Measuring the conversion
Tracking conversions may depend on several important factors. Your media campaign budget and the conversion goals could me the major factors, besides your incorporated IT mechanisms and tacking tools. However, tools like Google Analytics will help you measure the conversions in a more efficient manner. To simplify your tracking goal, you can take help of the following 5 conversion metrics:
a) Reach: How many Facebook followers, Twitter Followers, Instagram Likes or Linkedin Connections do you have? How are you expanding your reach with your social media campaign investments?
b) Traffic: What traffic you are getting from your social media profile pages? Is your social media investment helpful to increase the incoming traffic to your web pages?
c) Leads: Are you getting real business leads from your social media efforts? Are you witnessing more leads with the increase of your social media budget?
d) Customers: How many leads from social media channels are actually converting into the real business? Is your customer base expanding following your greater attention and investment on social media campaigns?
e) Conversion Rate: How many visitors you are getting to your site? Is the number of customers increasing with the increasing number of visitors?
Assessing Monetary Values of Conversions
When we are talking about the real conversions, it’s important to learn what monetary benefits we are achieving from each type of conversions. You will see how easier it is to measure and how effective it would prove to track the ROI of a social media campaign.
Do it with ease using your historical data. For example, if you have an idea about the Lifetime Value (LTV) of your customers, you can easily track the conversion. If you know the conversion ratio and the average LTV, you can calculate the cost of actual conversion. If your conversion ratio is 1:100, and the LTV is $10, then the conversion cost would be $0.01 only.
What if you don’t have any historical data? Still, you can measure the ROI. But, now you will have to use your common sense and have to play some guessing game. For example, you can think about paying a certain amount to someone for sending referral traffic to your web page. This amount can be decided on the per visitor basis and it will help you determine your social media campaigning cost.
1) Tracking cumulative performance
There are several popular social media networking sites, viz. Facebook, Twitter, Linkedin, Instagram and others. It could be sensible to track the conversion ratio on each of the networks and calculate the success in a cumulative manner.
You can use analytics tools to find the conversion ratio on each of the networks. And which will also help you in calculating the total monetary value on all the social media channels.
2) Calculation of Total Cost
This is rather simple, since you know the expenses incurred on your social media efforts. Calculate all labor costs and other fees that you would have spent in order to carry out your campaigns on social media networks.
3) Measurable Results & Analysis
Now, a simple calculation, and you will have the measurable results in front of you. You can analyze the data and can assess the success of your social media campaign.
However, the more important is to see the ways of improving your results. You may find ways to bring down the costs and also allocate your budget in a more insightful manner.
Like any marketing efforts, the success of social media marketing can also be measured. By tracking the return on investment, not only we can better analyze the value of the money spent, but it can also reveal us the ways of bettering our performance.
Figuring out the ROI is possible for social media campaigning as well. In fact, it may prove very fruitful to enhance the visibility and the business prospects through social media.