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Whether you are trying to enhance your business’s engagement or monetize your following, the only way to get an accurate read on performance is through social media ROI. A significant problem aspiring influencers face is deceptive vanity metrics. Visitor actions such as shares, likes, or comments feel great in the moment, but these forms of measurement may actually conceal the true results of your digital marketing endeavors.
Vanity metrics may give you warm, fuzzy feelings when you see a follower like or share your post, but this is about as far as their influence extends. While vanity metrics are easily measured, they do not actually make a difference in your performance in the long haul. They change with the wind and do little to inform you about the state of your business and the growth it is or is not experiencing.
On the other hand, social media ROI is the actual return on investment your company anticipates experiencing. It is based specifically on the time and expense your business invests in social media marketing. Because social media ROI follows specific actions rather than shifting follower metrics, it is far easier to measure your actual performance and adjust your marketing efforts accordingly.
The Problem With Vanity Metrics
The primary problem with vanity metrics as opposed to checking social media ROI is that they lead you astray. If you use vanity metrics as a way to make future decisions regarding social media marketing, you are basing your decisions on factors that have little to no weight on the eventual outcome of your efforts.
For example, one oft relied upon vanity metric is website hits. If more users visit your site in a particular month, it would be natural to assume that whatever you did that month was right. Not so fast.
The issue is, website visits alone do not tell you which marketing approach made the difference. Who was responsible? Was it a random, isolated event? At the end of the day, the number of users that click on your site doesn’t bring in revenue. Neither do likes or shares. Your social media marketing only hits payday by drawing more customers. If your approach to measurement does not involve gaining additional customers, it is essentially worthless and wasting your valuable time.
The Power of Social Media ROI
Social media ROI does not have a one-size-fits-all definition. Instead of using changeable metrics like shares or new followers, social media ROI looks at the actual rewards you are reaping from the money, effort, and time invested in social media marketing. One business’s ROI may be worlds apart from another, as it is completely dependent on the investment a person or business makes and the resulting return.
For instance, take a look at the amount of money invested last month in your business and the money you received back. Even if you gained additional likes or followers, if you turned little to no profit, you can use your ROI to pinpoint what improvements you need to make, which social media platforms are contributing the most to revenue, and how any alternations affect your ultimate goals.
How to Track ROI
Tracking ROI for social media marketing is a multi-step process, requiring you to pinpoint your goals, time frame, and strategy. Always rely on tools and hard calculations to determine your final ROI.
Lay Out Your GoalsIf you want to use ROI metrics to your advantage to capitalize on social media marketing efforts, start by laying out your goals. This could be to drive attention to your brand, increase website traffic, attract leads, and/or draw influencers to partner with. If your chief goal is sales revenue, you need to be very specific about the type and number of sales you want to take place.
Set Your WindowOnce you define your goals, create a window of time in which you want to reach them. For instance, you might enact a 60-day social media marketing strategy for a less aggressive approach than a 30-day strategy would require. It takes time to reach the metrics you want, so be honest with yourself about the time it might take and go from there. The good news is, if the window runs out and your strategy did not bring the ROI you hoped, you will learn where to adjust for next time.
Hone Your StrategyWith your goals and timeline in place, you need to create a strategy for achievement. Whether it is boosting your posting frequency on social media or networking with potential influencer partners, craft your strategy so you can realistically meet your goals in the time frame set.
Rely On ToolsUse metrics tools to your advantage when tracking social media ROI. Measuring factors like total engagement and brand mentions provide valuable insight as do tools like Google Analytics and referral sources. Use CRM to track leads and click engagements by measuring the number of clicks bridging social media pages to landing pages. If your goal was to partner with new influencers, track how many have signed on since commencing your initiative.
You can reach a concrete number for your business’s social media ROI by compiling a list of the expenses incurred (including time, money, and tools invested). Subtract your costs from your total earnings in the campaign time frame. Multiply that amount by one hundred. Your final ROI is the resulting number divided by your costs.
Social media is always moving, so you need to keep a constant eye out for new possibilities. Adjust your strategy by relying on dependable ROI social media metrics so you can formulate a campaign that wins.