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Social Media ROI Isn't Enough
Posted on March 21st 2013
You’re using Google Analytics like a pro. You’re tracking likes and comments to measure engagement. You’re tracking shares and retweets, using those numbers to gauge the success or failure of every social campaign related to your business.
Great work. Now, how does your social strategy impact revenue?
Your brand awareness is up. Your customers are really engaged in conversation on your pages, and you’re creating brand evangelists.
Great work. But again, how much money have you made from your social strategy?
Here’s my pet peeve about social media tracking: Engagement doesn’t necessarily equal revenue. And let’s be frank — that’s what we’re all after, right? We want to serve our clients to the best of our ability, produce innovative work, and make a difference in the world. But to do that, we have to keep the doors open and the lights on.
If social media tracking is taking up all of your time but not producing any monetary ROI, what are you really tracking? The company with the highest popularity rating doesn’t necessarily have the most loyal customers or the best business model. Without all the ingredients for a sustainable venture, your social media success means nothing.
So, what should you be tracking? Here are my suggestions for a thorough checkup of your social strategy:
1. Take a look at your overall goals. In “Living Your Best Year Ever,” Darren Hardy recommends setting S.M.A.R.T. goals — specific, measurable, attainable, relevant, and time-sensitive. Develop baselines for Web traffic, bounce rates, and lead generation. For example, how many leads are all of your marketing and sales efforts generating per month? Once you have the current number, set a specific goal for how many you’d like to generate per month, regardless of the means.
2. Create a smart predictive. As Stephen Covey says, “Begin with the end in mind.” Think of your social strategy in terms of the end goal, and look backward. Using our example, how many leads do you currently get exclusively from your social media efforts? How many people are signing up for your newsletter, registering for a webinar, or filling out your contact form after interacting with your social presence? If that number doesn’t meet your new lead generation goal, you need to either tweak your social strategy or stop spending so much time on Facebook. Find other ways to attract new business.
3. Track referral traffic. Do you see spikes in Web traffic in response to certain types of posts, or an increase in unique visitors after social campaigns that inspired a lot of engagement? Take a look at the numbers. Social media is one of the most cost-effective ways to increase site traffic, but be realistic about the results you’re actually getting.
4. Compare your analytics with your customer base. For example, let’s say your car dealership Facebook business page has 1,000 likes at the beginning of the month. You invest a lot of time and effort into social, and 30 days later, you have 1,200 likes. Plot out the names of the original 1,000 fans on a spreadsheet, and then add the 200 new fans on a separate tab. Compare those names with the list of people who bought cars over the past 30 days. Look back 60, 90, and even 120 days using your 1,000 fan list. Are all those likes translating into sales?
Next, give each fan who did make a purchase a lifetime dollar value that includes purchases, service requirements, etc. You can also take a look at fans who are using coupons, making smaller purchases, or calling in with questions.
Taking into account all purchases from a specific time period, total the revenue you earned from social media. Compare that to the time and money you spent. Are you getting a satisfactory return on your investment?
5. Finally, look at how social media is complementing your other digital marketing efforts. If you’re blogging or using PPC, you should be seeing traffic from those sources as well. Compare the numbers across your entire digital strategy, and make sure that each channel is contributing to your overall business goals.
Social media may, in fact, be the key to the lead generation kingdom. But that isn’t the case for every company. Don’t let 10,000 or even 200,000 Facebook fans distract you from the bottom line of what they mean to your business.