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How To Measure Your Online Store’s Social Media Success

How To Measure Your Online Store’s Social Media Success

If you’ve been investing a part of your budget in social media marketing, you surely want to measure the returns. However, the common problem social media marketers are facing today is the vagueness of measuring social media ROI.

Is your social media marketing strategy a pop or a flop? But, how can you say so? For many online marketers, measuring returns on investment (ROI) of social media marketing efforts seems to be a bit puzzling – especially by the numbers. It’s quite hard to specify how much returns or revenue a specific Facebook post, an Instagram image, or a tweet brought in.

How much did you get from the $1 Facebook ad you posted a week ago? Or, what good did your most retweeted and favorited tweet bring to you and your business? These questions may be quite hard to answer at once. However, determining the right things to measure and where to get started can make ROI measurement so much easier. Let’s get started with the basics.

What Social Media ROI Is About

According to Investopedia, ‘Return on Investment (ROI) is the measure used to evaluate the performance or efficiency of an investment. It measures an investment’s value relative to its cost.

So, what is social media ROI about? Social media ROI is what your business is getting back from all the time, effort, money, and resources you’re investing in your various social media marketing campaigns. Ideally, returns should be measured with dollar amounts. In tracking your social media ROI, there are key elements you must consider:

  • The amount of monetary investment put into social media marketing efforts
  • The equivalent dollar amount or the worth of your social media goals

The Importance Of Measuring ROI

Because many popular brands and companies are now dominating the social media circle, it really gets appealing to join in on the trend. However, if you don’t track your social media marketing efforts on Facebook, Twitter, Instagram, Pinterest, etc., especially the costs, it would be difficult to determine whether or not your efforts are doing your business any good.

Measuring your social media ROI can save you from wasted time, effort, money, and resources. If you aren’t able to determine whether your social media marketing efforts are working, you’ll keep on campaigning them – including the flop ones. And, that can result in a great loss of money. Knowing how to measure your social media ROI can significantly help you:

  • See social media marketing efforts that need to be improved;
  • Determine which social media channels are driving the highest revenues;
  • See how much you are paying for campaigns ex. pay-per-click;
  • Avoid blindly running campaigns that do not seem to work;
  • See how changes can significantly impact your online goals; and
  • Figure out whether your social media efforts are flop or pop.

A quote from an unknown author says, “Today’s preparation determines tomorrow’s achievement.” Measuring social media ROI may possibly be difficult, but is definitely possible. The preparation may take time, but it can help you achieve your social media goals better.

Setting Social Media Marketing Goals

How To Measure Your Online Store’s Social Media Success

To be able to measure your social media ROI, you have to have something to measure. You need to set up metrics or points of reference for measuring – aka social media goals. However, you need to make sure that your goals are quantifiable, can be linked to specific campaigns to which you can attach a number, and can be tracked. Here are a few examples:

  • Email list sign-ups
  • Newsletter subscription
  • Filled out contact form inquiries
  • E-book or PDF file downloads
  • New followers or subscribers
  • Online purchases

What’s the common factor among the social media goals listed above? They can all be tracked after a user takes a measurable action. Also, if you link these goals with the different social media channels, it would be much easier to track them. The question is, how?

Tracking Your Goals Or Conversions

After setting your social media goals, your next move is to track them. Once you have chosen which goals to push through, you need to get started tracking them. There are a variety of tools you can use to help you with this step. Two of which are Buffer and Google Analytics.

With Buffer for Business, you can track the number of shares, follows, likes, and other interactions in your social media networks. Buffer also offers businessmen a 30-day unlimited trial for free, with no obligations, and no credit card required.

With Google Analytics, you can track different actions taken by your visitors on your websites such as purchases, signups, and downloads. Just navigate to your Google Analytics dashboard to set up a goal – Acquisition > Social > Conversions.

If you don’t have any setup goal yet, you’ll see a prompt to create one. Fill in the necessary fields in the Set Up Goals link. There you can also assign a value to each goal or conversion to make it easier for you to measure your social media ROI.

Assigning Monetary Value To Your Goals

You need to assign a monetary value to your social media goals or conversions to make it easier for you to calculate the returns from your social media investments. You’ll also be able to see the actual amount you’ve earned from your social media investments. Here are different methods you can choose from to figure out how much monetary value to assign to your goals:

  • Average sale. The average sale is the average amount purchased on your website.
  • Lifetime value. The lifetime value is the average sale amount you earn from a customer.
  • Lifetime value x conversion rate. The lifetime value of a customer is multiplied by the average number of subscribers to determine the potential worth of each visit.
  • Pay-per-click costs. The PPC costs refer to the amount of money you’re willing to pay for social media ads (ex. promoted posts or tweets).

If you still find it difficult to assign a monetary value to your conversion goals, you can ask yourself the following questions:

  • If a professional promise to deliver ten completely filled-out contact forms from average-quality potential customers, how much are you willing to pay per completed form?
  • If a professional promise to deliver email list signups for every 100 online visitors, how much are you willing to pay per successful signup?

After assigning monetary values to your social media conversion goals, it’s time to calculate.

Calculating Your Social Media Investment

To fully determine whether your social media marketing efforts are bringing you a positive or negative ROI, you also need to calculate your investment or spending. Here are the costs you need to account for in your computations:

  • Labor cost. Look up the average rate for certain positions (ex. social media manager, etc.) and multiply it by the number of hours you would commit over a time period or per campaign. It would be much more convenient to measure labor cost per campaign.
  • Social media tools. Although using social media channels is free of charge, there are additional tools or software that require extra payments. Just like in computing the labor cost, you should compute this cost on a per-campaign basis.

For example, if a tool costs $60 for a year and you only used it for two months for a specific campaign, you need to divide $60 by 12 to determine its monthly cost. So, $60 / 12 is $5. For your two-month campaign, the cost of your tool is $10.

Your ad spending is the amount of money you spent on social media ads such as promoted Facebook and Twitter posts, post boosts, etc.
If you outsource a content writer for your social media campaign, you also need to count the amount of money you paid for that specific content.
After determining and calculating your social media marketing expenses, you can now calculate your social media ROI.

Analyzing And Improving The ROI Results

You now have all the data you need to get started in calculating your social media ROI. Calculate the ROI per social media channel, campaign, or promo using the simple formula below:

Once you’ve calculated the ROI of your various social media campaigns, it’s now time to analyze the results. Which social platforms or campaigns bring your business the most returns? Determine the social platforms that bring you the most returns and focus on them. For those that don’t, you can either eliminate them or think of better ways to make them more effective.

Without understanding at least the basics of what ROI is and how it is measured, you can’t really tell whether your social media marketing efforts can be considered a success. Use the given tips above as your guide and discover the best metrics or strategies that’ll work best for measuring the success of your social media marketing efforts.

Measuring your social media ROI follows this process: setting goals, tracking them, assigning them value, calculating, and analyzing the results. It may not be easy to get started, but as you get the hang of it, you can even create your own ways to measure your social media ROI. With a strategic and well-planned approach, social media ROI measurement becomes possible.

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