Knowing which ones are best for your business can be difficult. If you want to effectively measure social media ROI, this posting will show you some simple methods.
Measure Based on Lifetime Customer Value
One way to calculate social media ROI is by measuring how much a social media follower is worth to your business. This is known as lifetime customer value.
Lifetime customer value is the worth of a customer based on past purchases as well as future purchases with your business.
Here’s an easy way to think about lifetime customer value for social media.
(Number of Facebook fans ÷ Monthly sales from Facebook) x Average fan lifespan on your Facebook page = Lifetime Customer Value
We use Facebook as an example, but you can substitute other social media sites in its place.
Using this formula, consider this example. You have a 1,000 Facebook fans, and you’re getting $1,000 in sales a month because of Facebook. You also know the average fan stays on your page 24 months. Based on this information, a single fan would be worth $24 to you.
By knowing the lifetime customer value of your customers, you can compare it to how much you’re spending on social media marketing. This will help you see if you’re burning too much or too little.
Measure Based in Relations to Goals
Another way to measure ROI is through your social media marketing goals. It’s important to establish goals. Without goals, you’re setting yourself up for failure. How can you measure success if you don’t have any goals?
Goals might include fan growth or increases in social media interactions. The key is to establish realistic goals. Social media marketing takes time to perfect, don’t expect it to fulfill your goals overnight.
Based on your goals, here are some social media marketing metrics that you may want to measure.
- Connections – The number of fans/followers you have on your company social media profiles. Numbers aren’t everything. You want to have fans/followers that will actually interact and buy from you. That’s more important.
- Page Views – The number of times people are visiting your company social media profile. This is a good measurement on the popularity of your page.
- Posting Views – The number of times people actually look at the content that you’re posting on your company social media sites.
- Engagement Metrics – The number of times people are liking, commenting, re-tweeting and engaging with the content that you post on your social media channels.
- Public Sharing Metrics – The number of times people are taking your social media content and sharing it with their network of family, friends and colleagues.
- Clicks – The number of times people are clicking on links that you share in your social media content.
These are some of the social media metrics that you may want to measure based on your goals.
For Facebook, Facebook Page Insights is an excellent resource for finding important analytical data. You can see an example below.
LinkedIn has a decent analytics tab for its Company Pages that allows you to measure page visits and user engagement.
Measure Based on Website Traffic
Social media marketing can be a great source of customer traffic to your website. Some businesses measure ROI based on how many website visitors they’re receiving from social media.
Google Analytics is an excellent way to examine referral traffic from social media. In order to use Google Analytics, you will have to install some tracking code on your website. You can find out more form Google here.
Once you have Google Analytics up and running, you can find social media referral traffic by going to Google Analytics > Traffic Sources > Social > Overview. You’ll then see a graph similar to the one below.
Based on how much website traffic you’re receiving, you’ll be able to better determine the effectiveness of your social media marketing.
Measure Based on In-Store Traffic
If you have a brick and mortar store, you might want to measure ROI based on customer traffic. This is easy to calculate if you offer coupons and deals via social media.
Some social media sites such as Facebook allow businesses to offer special offers. You can see an example below.
For more information on these types of offerings, read “Create Discount Coupons with Facebook Offers.”
Measure Based on Customer Service Value
Social media sites are becoming a popular area for customers to voice their issues and problems with products and services. In fact, when customers have a problem with a product, 80 percent go directly online to find a solution.
More and more of these people are visiting social media sites because they offer a direct line of communication with the company.
Take a look at how much it costs you to typically handle customer issues via telephone. Then calculate how much time it costs to handle it via social media. You’ll most likely be impressed with the savings of social media.
Measure Based on Sales
Measuring based on sales is not a bad idea if you have a fully developed social media marketing program. However, this is not an effective measurement of ROI if you’re just starting your social media marketing initiatives.
Many businesses make this mistake. They start measuring for sales before they even have a following on a particular social media site.
If you’ve built up your social media marketing program, you can measure sales from:
- Social media coupon and deal redemptions.
- Online sales from social media referral traffic.
- Direct social media sales if you have a Facebook store such as ShopTab.
Get Help with Your Social Media Marketing
The key to boosting social media ROI is getting professional help. At AfterMarketer Club, we provide the resources and automotive social media marketing services that you need to launch a successful campaign.
We’ve helped auto repair shops, automotive retailers and car dealers with automotive Facebook marketing and other social media services.
To find out how we can help you, visit our social media marketing services page on our website or call us at (602) 412-3426.