Every astute business owner wants to determine the return on investment made in all aspects of their business, including Social Media and Social Networking. Here are five ways to determine ROI for these important marketing media.
1. Reach – This is the number of Twitter followers, Facebook fans, LinkedIn group members you have and is directly related to your social media success. The more people will see your content, the more people will spread your messages. Track how your reach is increasing over time. If you’re not attracting new followers as time goes on, focus more of your social media efforts on generating new fans and followers. You must build your reach to increase the value you get from social media marketing.
2. Traffic to website/blog – In social media marketing, one major goal you should have is to drive traffic from social networks to your website and/or blog. Look at your website/blog’s referral sources to determine how many visitors came from social media sites. For example, when you post a blog update use bitly.com to shorten the link to your blog since bitly.com will track number the of persons who click on the link and therefore traffic driven to your website.
3. Lead Generation– This is arguably one of the most important metrics to use when measuring social media marketing ROI. Take another look at the traffic you’re generating from social media sites. Of that traffic, how many of those website and blog visitors are converting into leads? Of course having a lead conversion form on your website to capture visitor contact information is extremely important in this process.
4. New Customers – Now take the lead data one step further. Are your social media leads actually turning into customers? And just how many of them are? Being able to attribute actual customers gained is perhaps the most powerful indicator that the time you spend on social media marketing is actually worth it.
5. Conversion Rate – What’s the visit-to-lead conversion rate of your social media traffic? In other words, of the social media traffic you’re generating, what percentage of those visitors become leads? While this may seem like a useless metric in itself, the conversion rate can be very useful when comparing one channel with another. For example, you can compare your Facebook conversion rate to your blogging conversion rate to analyze the ROI of those channels relative to each other.
Do share with us your how you determine the success of investing your resources in Social Media and Social Networking?