Did you actually know that social media marketing is one of the best digital marketing methods in the world today? Or, are you having a different opinion? Well, the truth is that social media marketing is an exercise that’s absolutely worth investing in.
As an online marketing strategy, it can generate huge sums of revenue if you play your cards right. For example, you need a well-written set of goals and a feasible business plan if you want to achieve some significant success.
Because of the failure to calculate Return on Investment, many investors have always perceived social media marketing really negatively. Some believe it’s a total waste of time and resources while others think that it’s the worst thing they ever tried.
In this piece, we’ve explained simple steps you can follow to determine the RoI of your Social Media marketing efforts. But before we may jump in, what really is social media marketing? It’s a type of online Digital marketing that maximizes the use of popular social media platforms such as Facebook, Twitter, Instagram, and LinkedIn to get in touch with clients.
How to Calculate RoI of Social Media Marketing Activities
A STEP-BY-STEP GUIDE
1. Setting the Goals you Want to Achieve
Remember, you can’t know whether you’re making any gains if you don’t decide on where you would like to be at the end. There are two types of goals that you may want to achieve. The first one could be to increase your brand awareness while the other one is to increase sales.
Depending on the current status of your business, you may realize that you need to achieve only one of the two main goals or both. Examples of social media marketing goals are
- Boost Brand Awareness
- Establish Authority on a given topic in your niche
- Generate more leads to your site
- Strengthening customer relationships
- To encourage many people to sign-up for your regular newsletter
- Get Customers to Purchase your products online and much more.
Well, now that you already know what you want to achieve, it’s time to figure out how you’ll measure the level of success for each of the goals you have set. But before that, on which social media platforms are you ideal customers spending most of their time? Are they using Facebook, Twitter, LinkedIn or Instagram? This consideration is very important since it helps to avoid posting content to the wrong audience.
2. Determining KPIs (Metrics) for Each of Your Marketing Goals
This is another critical step of determining Return on Investment of your online marketing activities. The metrics are the easily identifiable characteristics of each of your goals. For example, if your aim is to generate more leads – you can’t see that directly but you can easily track it by looking at the web site’s traffic from each of the four main social media platforms. So, in such a case, the web traffic becomes the KPI or the metric.
You must ensure that you’ve established metrics for all the goals you have set. Generally, the KPIs of sales goals are easier to track than those of the brand awareness goals. The easiest way to go about tracking is by using a powerful data analysis tool like the excel spreadsheets. Below are some common examples of the metrics you can track.
- The number of leads coming from each online social platform
- The number of leads from each platform who turned into actual customers
- Website traffic
- Number of PDFs downloaded online
- The number of web visitors who signed up for a newsletter
- How many appointments have been booked?
- How many views did a post generate?
- The extent of post engagement on each of the platforms. This should include tracking thinks like the number of views, comments, shares, and likes among others.
- The number of followers obtained from a network for instance, on the Facebook page, Twitter, and LinkedIn.
- Website visits
3. Estimating the Benefit of the KPIs
In order to determine the return on investment, you’ll have to estimate the value of all the metrics recorded. This is achieved by assigning each of the KPIs an estimate monetary value, then get the total amount to be used as the overall benefit.
The next thing to do is to calculate the total costs. Sum up all the amounts you spent on paid adverts, paying online marketers and other expenses. Finally, you can work out the percentage RoI of your social media efforts as follows.
Percentage RoI = (Benefits – Costs)/Costs X 100%
Calculating RoI is the best way of achieving prosperity in your social media marketing activities. Always ensure to set up relevant goals and accurately track all the metrics in order to record success.