One question that is often asked of me when I talk to small business owners about the use of Social Media to build relationships and profits is “How do I measure the ROI on Social Media?”
This post focuses on 2 specific areas that can be measured that will show how well your Social Media efforts are performing. You will also be introduced to a few “methods” of tracking that must be implemented to help with your measurements.
To help answer this question…
Take a look at how you measure marketing ROI in your company today.
Do you have customers bring in coupons (Valpak, newspaper, magazine, etc.). Do you track new client orders by your outside sales people? Do you track hits on your website?
There must be some way you track those metrics today, so we will apply those same ideas and tactics to social media.
How do you measure the ROI on Social Media?
Google Analytics and Landing Pages
If you haven’t signed up for a Google Analytics account, do it now by clicking here. Google requires you to place a small bit of code on your website pages so Google can track stats about those specific pages. If you have your website created with WordPress, you can use a plugin to save time so you don’t have to manually add the code to each page on your site. “Google Analytics for WordPress” (by Joost de Valk) is the one we use here at BaconSocialMedia.com.With this code installed, you will now be able to see how the pages on your site perform against the other pages.
Now we can begin to work with real measurements. Create a “Landing Page” for ad campaigns you run in Facebook, twitter, LinkedIn, and your other Social Media sites. (A landing page is a page on your website that users “land” on when they follow a link you have provided to your site. It should not be directly accessible if someone just typed in your web address.) Have them point to and direct the users to either individual pages (If you want to measure each social media channel individually) or one single page (If you want to measure them collectively). These landing pages can be either copies of your existing pages on your site or new pages altogether. Give the users some incentive to visit: coupons, special offers, promotions, etc. that can only be found on these specific landing pages. With Google Analytics installed, you will be able to see how many people are actually clicking through the social media ads/promotions to get to your Social Media landing page. Use your sales numbers with these coupons, offers, etc. to calculate your ROI. Then the question becomes:
Do you continue to count ALL of the sales for this customer in your ROI calculation (because you used social media to find them, and you are continuing to engage them via social media), or just the single transaction? Add a comment on this in the comments section below. I’d like to hear your thoughts. Side Note: If you have dedicated employees working with your social media channels, don’t base their performance solely on the number of hits you get on your landing page. Their main objectives should be to simply find customers and develop relationships. They should not be soley measured on how many people they get to click on the coupon link. Remember, relationships are what build followers over time, not simply the close of the sale. Track the Real Relationships you created online Your social media efforts should be about working to build relationships with existing and new customers. Have I said that enough? It’s all about relationships.
Once these relationships are created, you can begin to track the number of interactions, sales, conversations, etc. with each customer. You may only want to track these with customers that have made a purchase (you wouldn’t want to track all 1,000 followers as you would spend more time tracking than actually making money). Create spreadsheets for each new customer and begin integrating your social media metrics with your standard customer tracking metrics. How much are they buying? How are they buying? What are they buying? Brand Awareness and Overall Sales Figures Some experts online will tell you that using sites like SocialMention.com to track how many times your company name or brand is mentioned online is a good metric to track to determine ROI. Personally, I feel that if you don’t already have a large brand, you will not experience the same benefits from these tools that much larger companies experience.
In my opinion, most of a small business owner’s time online should be spent cultivating relationships online, not measuring how many times they were mentioned in tweets. That said, tools like Social Mention, Google Search, and twitter search should be part of your dashboard so you are alerted when someone IS talking about your brand. The difference is simple: get alerted, but don’t measure (until you get large enough to care).Some experts will also tell you that if your Overall Sales Figures are increasing during the same time period your Social Media presence is increasing, you must have a ROI from social media. I don’t buy this. Social media is probably a relatively new concept for your company, so it must be separated when it comes to measurement of success. Don’t assume that social media is the sole reason your company sales are dropping or increasing.
You started measuring, now what?
Now that you have the tools and plan in place, focus on:
How can you make the measurements and sales from social media numbers more precise?
How can you make your social media campaigns better for your customers.?
What other resources or campaigns can you add to your marketing strategy as a whole complement your social media presence?
Be prepared. You are probably not going to see skyrocketing figures in the beginning. This just takes time, so sit back, relax, and enjoy developing those relationships.
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