If you were measuring social media ROI by revenue, a simple formula to do that looks like this: Profit / total investment X 100 = social media ROI.
As a social marketer, you already understand that social media brings value to your organization. But can you measure the ROI of your social media marketing efforts? Social ROI can often be tricky to prove.
Measuring social media ROI is also key to building and refining your social marketing strategy. It shows you what’s working and what’s not—allowing you to shift resources and tactics to be more effective.
Table of Contents:
Social Media ROI Definition
How to Measure Social Media ROI for Business
How to get ROI from Social Media
Social Media ROI Definition
ROI stands for “return on investment.” Social media ROI represents the return on investment from your social media activities.
Generally speaking, social media ROI is a measure of all social media actions that create value, divided by the investment you made to achieve those actions. After all the time, money, and resources put in—what’s the return?
Here’s a simple formula for how to calculate ROI for social media:
Value/investment (people hours, ad budget, etc.) X 100 = social media ROI (as a percentage)
How to Measure Social Media ROI for Business
Exactly how you calculate ROI depends on your organization’s objectives (brand awareness, revenue, customer satisfaction, etc.).
That’s why the formula above uses value, rather than revenue or profit, as the starting point.
Here’s how to measure social media ROI for your business.
Step 1: Define clear social media objectives
This is where you define what value, in terms of social media results, means to your brand.
Think about various ways your social media investment might create value, like:
1)Business conversions (such as customer acquisition or lead generation)
2)Brand awareness or perception
3)Customer experience and loyalty
4)Employee trust
5)Partner confidence
6)Security and risk mitigation
Make sure to consider all your social audiences in your objectives.
If you’re not thinking about all your social audiences, you’re missing out on value when calculating your ROI.
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