The Financial Impacts of Social Media ROI
So in my previous post about which metrics to track for social media ROI, I explained the different aspects that you should consider when it comes to your social media networks. Taking these metrics into account, we were able to create conversation rates, amplification, attraction, view ability and click-through rates. It is important to watch the trend that these rates follow and look into any dips and peaks – what caused the conversation to decrease or what type of content resulted in better amplification, etc. – but for many companies this will not be enough. It is nice to see improvements in social media but your end result needs to be cold, hard cash money! Most brands use social media as an avenue to drive sales and therefore need to use these metrics to truly figure out what their social media ROI is.
This is where you will need to gain some web analytical skills if you do not already have a background, or maybe you have someone in your company who specializes in it (even better!). Before I jump into how you can track your social media success on your website, it is important to understand that some of your social media efforts could result in in-person sales, especially if you are a physical store. If this is the case, run coupons or specials that have specials codes or are directed only to specific social network audience. This is a great way to figure out if your efforts are being utilized by your audience…plus who doesn’t enjoy a nice discount coupon J
When it comes to discovering your social media ROI that is restricted to the web, you have to really analyze your website. First of all, if it’s an e-commerce site then that is awesome, this will make things a little easier. But for non e-commerce sites, and maybe even some e-commerce sites, you have to really dig in deep and figure out what you want your audience to do on the website. What is the end result that you are looking for? Do you want them to contact you to find out about your product or pricing? Do you want them to sign up for your newsletter or blog RSS so that you can keep them in the loop with information? There are many purposes of a website so you really need to figure out the purpose of yours.
After analyzing your website and figure out what end results you want (aka conversions), it is time to set up goals on your analytics tool. There are many different tools such as Google Analytics, Yahoo Analytics, Omniture, etc., but they should all allow for you to set up goals. For e-commerce sites, you’re end goal is to sell product so set up goal that gets counted every time a user checkouts and buys some product (you can even go and create values for the goals and products, allowing you to really see how much income is being created). For the non e-commerce conversions, such as contacting you or signing up for a newsletter, create thank you pages and set up goals to track when users do either of those and land on the specific thank you page (after some time you can start analyzing how many of those conversions have lead to sales and calculate an estimated value for each goal).
Once you have these goals set up and running, you can begin segmenting your data with the analytics software in order to see which social media sources had the highest goal conversion rates (and if available, the goal value per visit from that social network).
*Side note: ROI is return on investment so it would also be beneficial to compare and analyze the income that you believe social media has accounted for with the money and time invested on your social media efforts.
I also like to note down the number of new leads and total revenue per month and analyze the trends for these values. Discover when and where you were bringing in the most leads and income. You should also document, when you are not bringing in leads and income. Compare this to your social media metrics for those same time periods. For example, let’s say you have a huge jump in monthly income in October and you look at your social media metrics and notice that your engagement rates for Facebook were at a high point, it’s a no brainer, start to analyze those metrics! See what you were doing and what type of content you were sharing during that time period on Facebook. It could be that you were running a campaign that worked wonders for your organization!
If you put your thinking caps on, you can discover your social media performance, as well as the best tactics for your organization. This process is by no means an easy one. It will take time, and you may even have to discover other efficient ways to calculate financial ROI. So I ask that you please share with our readers through the comment section! We also understand that these concepts are sometimes confusing so feel free to leave us questions or contact us if you would like us to explain something in more detail.
Measuring your Social Media ROI – Small Business Marketing 101
This series includes:
Small Business Marketing 101
Step 1: Position and Plan
Step 2: Create an Identity
Step 3: Spread the word through Internet Marketing
Step 4: Measure your Digital Media ROI
Step 5: Measure your Social Media ROI
Marketing channels have drastically changed over the years, and social media has taken an unprecedented seat in majority of all marketing plans. However, measuring social media ROI has been an industry wide controversy and we have set-out to terminate the controversy. Below is a carefully addressed solution on measuring Social Media ROI and likely the last resource you will need to satisfy your objectives. Yes, our agency Creative Intellects innovated this methodology and has proven its track record through our various success stories.
Engagement in digital actions is important for any digital media-marketing program. However, it is far more important that we enable and empower our market to effortlessly share, adapt and evolve these marketing messages. This allows for us to measure the types of influences these messages create. By quantifying the true impact of digital and social actions, as well as moving beyond immediate impact, includes not only your ROI but also your return on influences.
What does all that jargon mean?
It’s simple. Media that is social is different from digital media. In fact, social media has completely different measurements and cannot be compared against digital ROI strategies. The objectives with social media are measuring the following: advocacy, loyalty, trust, and influence. These objectives measure sentiment, comments, feedback, mentions, and organic reach of a brand. These measurements must be utilized far differently.
Measuring Social Media ROI
Understand social media has many levels of user engagements which are translated into four steps.
1. Engagements
- A prospective user that visited your website
- A prospective user that visited your landing pages
- A prospective user that visited your web blog
2. Contribute
- A customer posted a review about your business
- A customer provided you with feedback on another website
- A customer commented about your product/service on a blog
3. Participate
- Followed you on Twitter
- Socially bookmarked your website and/or content
- Became a fan on your Facebook page
4. Create
- Re-tweeted on Twitter
- Wrote a review about your product/service on a personal blog
- Mentioned your product/service on his/her Facebook status
- Engaged in conversation with your product/service
Through Social Interactions Things Occur In Sequence
The return on investment within social media occurs once all the non-financial impacts are fulfilled as outlined above in the four steps. This means that the user goes through the four steps: engages, contributes, participates, and creates for your business. Each of the four translates into value for your organization, eventually facilitating the ‘Word of Mouth’ marketing. This encourages social networking amongst peers with relevant interests to engage, contribute, participate, and create. Talk about buzz marketing and financial impacts at its best. No wonder social media is an unprecedented marketing tool.
So talk to us! How is your social media strategy working for you? If we can help national brands with their marketing strategies, who says that our agency cannot help you? All you have to do is take notes, and if you really want to be a step ahead, make a small investment in our Internet Marketing eBook. Both of these tools and resources will serve as the perfect guide in establishing your brand.
Measuring your Digital Media ROI – Small Business Marketing 101
This series includes:
Small Business Marketing 101
Step 1: Position and Plan
Step 2: Create an Identity
Step 3: Spread the word through Internet Marketing
Step 4: Measure your Digital Media ROI
Step 5: Measure your Social Media ROI
The Small Business Marketing series is a compilation of what most businesses should be doing to increase their visibility on the World Wide Web. We want to take the time to educate you, and empower you to increase your ROI. Now that we have covered the basics in Small Business Marketing we want to give you a macro view on how to measure your Digital Media ROI.
Before we begin, let’s go over the basics first. A digital media campaign is designed around the idea of building an awareness through various types of media channels. They can range between search marketing, public relations, social media, and online media. These mediums are generally specific in building traffic, increasing lead generation, as well as serving as a tool to monitor website performance analytics.
Keep in mind that you have to be patient, this does not occur overnight by any means. You have to understand the analytics by evaluating the types of visitors that approach your website, just the way you manage your brick and mortar facility. The right metrics are important when you want to see a solid return on investment. If this sounds like a lot of work, its not so bad once you get the basics down. In laymen’s terms, every aspect of your digital media strategy is measurable.
For example, let’s say that a visitor walks into your brick and mortar facility but is somewhat hesitant to make that purchase. We already know that he/she is likely to search on the World Wide Web for competing prices and service attributes. It’s a given. If this prospective customer were to visit your website he/she is likely to make a final decision based upon the quality of your website. Be sure that your website is positioned to obtain your target market, this is where proper design and marketing messages take priority.
Measuring ROI
In order to measure ROI in a digital media campaign, we must review the non-financial impacts first. Non-financial impacts are stages within your marketing campaign that include but are not limited to the following: the number of visitors, number of page views, time spent on website. In digital media the objectives are the following: increasing reach, awareness, coverage, and engagements across all verticals. Once visitors have engaged with the intended website and engagements occurs with the product/service – an ROI can be measured by the conversion rates. The higher your conversion rates the better your campaign is performing. This means that you have succeeded in obtaining successful website usability.
Conversion Rates & Why They Drop
Conversion rates drop for two primary reasons.
1. Website traffic is not targeted to the intended product/service. If you are selling fish tank equipment and a prospective user who is searching to purchase exotic fish, is not likely to remain on your site for too long. Takes extra measures to target prospective visitors for your intended product/service.
2. Website usability and the ability for the user to find the solution they intend is also another reason for poor website conversions. Usability is very important and design strategy plays a key component when it comes to conversion rates. Be sure to measure your shopping cart abandonment rate.
Stay tuned as we are going to be giving you Step 5 of this series in Small Business Marketing 101. If we can help national brands with their marketing strategies, who says that our agency cannot help you? All you have to do is take notes, and if you really want to be a step ahead, make a small investment in our Internet Marketing eBook. Both of these tools and resources will serve as the perfect guide in establishing your brand.
