If you combine social media marketing with your business objectives and other online marketing strategies, you can and will be able to measure the ROI for your business. This post will give you nine different ways that you can track and measure the ROI from your social media marketing efforts.
But first, let’s be clear: ROI is a numeric equation (expressed as a percentage) showing you what your profit is based on your dollars invested:
ROI = (Return on Investment – Investment) / Investment x 100
When you calculate your investment, be sure to include the cost for time (employees), tools, and any other expenses.
Now, here are nine ways that you can track ROI from social media marketing:
(1) Web analytics
If any of your lead generation or sales are done online, you can use web analytics (such as Google Analytics, KISSmetrics, and Webtrends) to track the sources through which sales came through. If you have an e-commerce store, web analytics are a must!
(2) Through your CRM system (Lead Sources)
Some CRM systems, such as Infusionsoft, allows you to add lead sources to the end of URLs so that you can track who bought what through which URL. If any of your business’s sales are done online, this combined with web analytics is a VERY effective way to track social media ROI.
(3) HTTP cookies
A third possibility is to add an HTTP cookie to URLs so that when a prospect or customer clicks on one your links (that you shared on social media), their browser is “cookied,” or in other words, “tagged.” When the person who is “tagged” ends up on the destination URL you have set up (signaling the completion of goal), your web analytics, social media software, or CRM will track it.
(4) Social Media Only Promotions/Campaigns
One of the best ways to measure social media ROI is by having an offer for your customers that you only promote through social media. That way, you’ll know that whenever someone responds to your offer, they came through your social media marketing efforts. Some of the strategies you could try include:
- Facebook Offers
- Promo code at checkout (that only your social media followers know about)
- Special offer/campaign that only your social media followers hear about, whether online or in-store
(5) Survey question during checkout and/or after checkout
A quick question during a checkout process – How did you hear about this product? – is another way to easily track your ROI from social media, as well as from other channels. This question can be asked in an online form at checkout, during a purchase via phone, a quick message after the sale, or in person when you’re “on the job.” (NOTE: make this question optional, so that customers don’t feel forced to answer a question they may genuinely not remember.)
(6) URL Redirect
Having a specific URL redirect to a landing page is another great way to track where the traffic and conversion came from. For example, you could have FreeFishFood.com redirect to your landing page offering 40% off on fish food. If you only use FreeFishFood.com on your social media channels, you’ll be able to track the conversions from that URL redirect (whether it’s online purchases, or an offline method such as phone calls, faxes, in store, etc.)
(7) Custom Landing Pages
You can create a custom landing page or sales page for your offer that you only use on social media. If anybody opts-in or purchases through your custom landing page, you’ll know that they came from social media.
(8) Manually (by hand)
Sometimes a prospect asks about your product or service on Twitter or some other social channel, and needs more information before making a purchase. You can have them email or call you directly (or someone on your sales team) to get the further information they need in order to make a purchase. Make note of the prospect/lead by hand (I use a spreadsheet) so that if and when the prospect buys, you’ll know what marketing channel that customer came in from. Make sure you include the prospect’s name, contact info (email or phone), what they are asking about, what social channel they asked it on, whom you sent them to for further information, and whether or not they ended up buying.
(9) Promo Codes
A promo code is an easy way to associate certain leads and sales to a marketing channel. You can have the same offer for various channels, and give each channel a different promo code. Example: Offer is 20% off Men’s running shoes. The promo code for email marketing is E20, while the promo code for social media channels is SM20. Then, when you look at your sales numbers, you can see which promo codes (marketing channels) drove sales.
The bottom line is this: make sure you are tracking business metrics (leads, sales, ROI) and not just vanity metrics (followers, “Likes,” comments, etc.) The latter is still important, but only if it is contributing to the former. Using one or all of the above methods are a great way to monitor and track the return on investment from social media marketing.
Other important metrics to monitor and track:
- Total Lifetime Value – Does a customer who comes through social media have a higher or lower lifetime value?
- Cost per lead – Is the cost to acquire a lead higher or lower when the lead is acquired through social media?
- Cost per sale – Is the cost to make a sale higher or lower when the sale is attributed to social media?