There are so many social media networks in the online world today such as Facebook and Twitter. Due to the incredible reach of these networks, businesses have been using them to market and sell products. You, too, can use social media networking strategies for achieving success in your business.
However, there is often a question regarding the returns on investments brought by the social media marketing strategy. Measuring the ROI can help you understand whether any changes need to be made to the strategy. After all, if the strategy is not working, you are simply wasting your money, time and resources.
The effectiveness of your social media campaigns can be measured using actual metrics. Vague concepts such as followers and shares are not enough to give a good idea about the ROU. In order to gain a clearer picture about the status of the returns on your investments, you can make use of the following steps.
Determine the Conversion Goals
The goals of your organization will certainly differ from other companies and business even if they operate in the same niche. Therefore, you can have a different set of goals for your social media marketing campaign. However, you should determine the goals beforehand. At the same time, the goals should be measureable. You will want your customers to take actions that result in a financial value for your business.
Tracking the Conversions
The method you use for tracking the conversions will be dependent on the social network that you are using. Your IT systems and even the goals of the campaign will affect this process. On the other hand, there are tools that can simplify this process such as Google Analytics.
Determine the Financial Value of Each Conversion
You can determine the financial value of each conversion in two ways. You can use the historical data of the customers for this purpose. Another method would be to use guesses or estimates.
Measurement of Benefits by Channels
You should collect the data of the traffic that is inbound to your website from the social media network. Also, take into account the conversion rate of that traffic. The analytics tool can be used to get these numbers. You can then easily correlate this data with the total financial value of all those conversions.
Determine the Total Costs
You should calculate the total costs of the campaign for each social media channel. Use all the metrics such as labor costs, promotional account fees.
Analyze and Improve
Now that you have got all the necessary figures at your disposal, you can easily calculate the returns made on the investments for each social media channel that you have used. This data can also help you understand where you need to make improvements.
Social media channels can be powerful tools. However, you should not be using them blindly. Try to understand whether your business is actually being benefitted in any way through the implementation of these marketing strategies. Moreover, a high ROI can give you another reason to keep improving your efforts in social media.