Social media marketing has long been a very complicated and elusive tactic when it comes to ROI.
In fact, it has become a little bit like the trade show of old. This might sound familiar to you: “We don’t know what we get from it, but we know we have to be there.”
You know you need a LinkedIn page, a Twitter account and a Facebook profile, but what do you do with them? How do they help the business, and what should you be measuring?
Key Numbers For Social Media ROI
Total reach for all of your social sites: This includes the total number of people across all sites who have connected with you and who have requested to be notified when you post fresh content.
Total number of site visitors from social: This is the total number of visitors that stop by your website after finding you on any of the social sites.
Total number of leads generated from people who found your site through social: This is the total number of people who found your site via social, clicked through to it and converted from an anonymous visitor to a lead by filling out a form.
Total number of sales opportunities from people who found your site through social: This is the number of people who started at a social site, landed on your website and then converted on a bottom-of-the-funnel offer, which resulted in an immediate sales opportunity.
Revenue generated: This should be fairly self-explanatory, but in case you’re not sure, this is revenue from customers who initially found your company via social network marketing.
Now that you have the numbers you want to track, it’s equally important to set some goals for each of them.
Set Goals Monthly
For each of the numbers above, baseline your current performance and then look for 10% to 20% improvement month over month. The way you decide how much growth you should be expecting has everything to do with the rest of your inbound marketing campaign planning. For instance, if you’re not planning to run any social campaigns or publish any new content, you should expect only modest growth.
But, if you’re planning on blogging daily and launching a new piece of long-form content every single month, you should expect more aggressive growth from the social marketing metrics.
Consider Goal Values
If you want to take your social marketing ROI tracking to the next level, there’s a concept called Goal Value that you can apply to the numbers above. It takes a high level of insight into your marketing and sales activities, but if you’re interested, here's how you apply it ...
This approach provides a value to each metric based on its position in the sales funnel and the historic revenue typically achieved from a metric like this. So, a new follower isn’t worth as much as a sales opportunity.
If your average annual revenue (AAR) per new customer is $10,000, a new follower might be worth 1% of that, while the sales opportunity should be 50% of the AAR number.
These percentages are typically conversion-to-customer numbers. So, 1% of new social followers become customers, and 50% of sales opportunities become customers. Get it?
Take a look at the Social Media Goal Value Tracker illustrated to the right.
If you’re going to adopt this approach, you quickly get to see how much potential revenue has been created as a result of your social efforts. This is a great way to look at the future value of your social media work.
Keep in mind that this is very top-of-the-funnel stuff, so depending on your sales cycle, it could be months before you realize this revenue. However, without this number, you end up having a lot of conversations that start with, “We haven’t realized any revenue from the social marketing yet.” While that might be true, it doesn’t mean the social marketing isn’t contributing any ROI. Look at both: actual revenue and projected revenue for the full social ROI picture.
Start Today Tip – Start tracking the ROI from social media immediately. This includes benchmarking and baselining your current social numbers. Then, set goals for the month of March and get tracking. Tying the numbers into revenue is going to get the attention of the sales team and should give you a good indicator as to how effective your social campaigns are performing for you.
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Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist
Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.