Understanding ROI for Social Media Marketing

Measuring and understanding ROI of your social media marketing efforts is not as simple as it may seem at first. Every business wants to increase sales and revenue but tracking where those sales come from is the challenge. If you are managing your own social media marketing you might want to simplify it by wanting the phone to ring and say “I found you on Facebook” or “I saw your tweet on Twitter”. Think about your own personal use of social media. Do you not have to have a need or desire for the product first? Would you just call somebody you did not know? Would you not check the company out first? Follow them for some time. In this day and age of spam, trust must be built first. How long do you think that takes? Say you were to see an ad for a product you want but you never heard of the company so you question the quality, will it ever arrive and or is it what you expected? When you find a new local store or restaurant to check out do you not check them out online first? Check them out on social media? Then maybe in a week or two you might visit the store where you may or may not buy something. So you see it is not as simple as tracking who found you on social media.

I have one client who told me that they had this prospective client contact them and said he found her on the internet. However come to find out he was a follower on her Facebook page for several years. He never commented, liked or ever engaged with the page and still doesn’t.

Another client told me of a prospective client who was told of her in a health food store by the clerk working there. That clerk was able to articulate not only her service but the benefits as to why this person needed to contact her. My client lives in the US and this conversation occurred in England. It was through social media that she actually educated this clerk to the point he was able to refer her. Was it her Facebook? Twitter? Blog? Email Marketing? It was not possible specifically track which platform the clerk followed her on but does it really matter?

Understanding ROI

The results of your social media marketing depends highly on having good content. Your posts, tweets, blogs and email content all have revolve around providing a solution to the needs of your customers, clients and those in need of your product or service.

You must first set goals and objectives for your business that are achievable and measurable. Your social media marketing strategy is then applied to achieving those goals/objectives. Then and only then can you begin to measure to ROI.

So what do you measure? This is where the waters can become muddy as many tend to look at just reach, impressions, blog views, comments, likes, shares, page views, video views etc. While an overall increase in those metrics is what you are looking for it is hard to see the impact it all has on sales/revenue. That is why using social media for new email signups, coupons, special offers, downloading apps, e-books, white papers etc have become part of a social media strategy for small businesses. It is easier to measure the results from your efforts and can convert followers into customers. Some of the other metrics you can measure are:
• New followers
• Clicks on link
• Online purchases
• Filled out contact form
• Signups for newsletter
• Downloads of .PDF file such as an e-book, resource guide or white paper
• Time spent on important webpage

However if you are just starting out, then you will have to work on building your foundation before adding any of these into your marketing mix. Having a good foundation and the ability to influence those who follow you are important factors in deciding when to add these to your marketing mix.


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