In order to justify expenditure, it is essential for a business to measure its social media ROI. As with everything else in a business that costs money, changing to a new computer system or hiring another staff member, businesses rightly expect a return on the investment. While most businesses now understand how to use social media, a lot are still struggling to figure out if they are doing it well.
While a business can easily measure the number of Likes it has, or how many retweets it receives, other parts of measuring social media strategy effectiveness aren’t so tangible. The reason is that, unlike most traditional marketing campaigns, social media is mostly about sentiment, engagement, brand loyalty and building solid relationships with customers. These are not things that can be measured by simply adding up the numbers in the right hand column.
Social media works by driving more traffic to a website through a blog, or Facebook, generating interest around a brand, or product and increasing awareness and information about it in the marketplace.
Measuring social media ROI isn’t impossible, but it can be difficult. Below are some things to keep in mind when measuring the ROI of your social media campaign.
Start with a goal - If you don’t know what you want to get back from a social media campaign, how can you measure if it is effective or not? You may have a goal of increasing your Twitter followers by 100 per cent in six months so you would measure how many you had at the start and then check six months later to see if you have reached your target. It sounds simple, and that’s because it is, but a lot of businesses fail to take this simple step.
Businesses should also note when they started a social media campaign and six months, or a year later, check if sales or enquiries have increased. If so, the business can attribute this to the social media campaign, keeping in mind other factors which may have an effect on this numbers such as a popular new product or traditional marketing campaign.
Pick your tools – There are plenty of options available to measure social media such as Google Analytics, Klout and TweetMeme Analytics (just to name a few – there’s a lot more out there). These measure the numbers of Likes, fans and how successful you are at engaging with your audience through the number of retweets or brand mentions.
Once you have picked the tools you are comfortable with and suit your business and desired outcomes, make it a regular thing to check your measurement. This could be done once a week, or once a month, depending on the depth you want to go.
Also, be sure to keep a timeline of what you do, such as social media competitions or LinkedIn advertising, and how successful it was. When put against a timeline of a business’ sales figures, this can you help determine what was successful and what wasn’t.
Going beyond the numbers – It’s all well and good to know how many followers you have but you need to find who is following you. That way you can tailor your message to suit their needs, attracting more followers and increasing brand loyalty and hopefully, advocacy.
Another part of this is measuring the sentiment behind the numbers. While it’s great to have people mentioning your brand, you want them to be saying positive things about you, not negative. There are a number of tools available online for this too. You may have to pay a small fee to use them, but having the information, at the end of the day, could be priceless.
Remember though that sentiment is subjective and is largely based on context so you will need to evaluate the sentiment behind a statement about your brand from a business objective.
Once you have this information you can also use it as customer research. If you find a lot of people are complaining about a certain thing, don’t dismiss the information, use it to change the way you do business.
At the end of the day if a business is smart about the way they do social media, there is ROI to be had and the greatest risk at this point in time is to not be a part of it.
-Josh Frith is Managing Director of The Dubs