How Do You Measure Social Media ROI?

ROI_descriptorsIf you’ve heard me speak on social media, you know that I spend a lot of time talking about ROI (Return On Investment).  I’m of the opinion that if you can’t measure your social media marketing efforts, you’re wasting your time.  Both direct sales and network marketing companies, as well as independent direct sellers should have a plan to measure what they’re doing, so you know if social media marketing is a good use of your time, as well as where to make adjustments.

But how do you actually do that?

It all starts with a plan.

You will have no idea how effective your social media marketing efforts are if you don’t know what it is you want to achieve.  For example, let’s say your goal is to increase your sales by $500/month.  You must start with a baseline number (for example, I currently sell $2,000/mo.)  Now that you know your baseline and what your goal is, you can identify specific activities that you will do to reach that goal.  You might form a customer group on Facebook in order to generate reorders.  You might set up an autoresponder to reach out to all former customers on a regular basis.  You might start blogging to provide information that solves problems for potential customers, related to your product line.

Once you’ve defined your activities and put your plan into place, the next step is to look at your analytics.  Are people coming to your site?  Where are they coming from?  If you don’t have access to Google Analytics (which you may not if you’re driving traffic to a replicated website that your company provides) maybe you need to reach out to each customer that places an order to find out how she heard about you, or what enticed her to make a purchase.  On your blog, you can view the analytics to see where people are coming from, and what they click on within your blog posts.

CBR002669Finally, take a look at your sales numbers.  Are you seeing an increase over your baseline as a result of your online activities?  While you may not be able to get the information from every single person that places an order, can you identify the additional $500 each month that comes as a result of your efforts.

And then, which efforts are bringing you the greatest impact?  Are there places you can tighten up your strategy?  Are other efforts less effective?  By taking a look at the numbers, you can then determine which efforts are the best use of your time.

Well, you may say, that’s fine for concrete objectives like sales and recruiting, but what about for more intangible goals like brand recognition?  Fortunately there are tools out there to help you measure that as well.  You might start with a baseline search on a tool like SocialMention.com to get an idea of how many mentions are currently being made about your company, and how positive they are.

At that point, your strategy might be to begin talking to people, building relationships, and eventually mentioning your company.  Maybe you want to form strategic relationships with influential bloggers who do product reviews on their blogs in exchange for free products.  If the point is to get people talking about you, then measure how many conversations are going on, and how positive they are.  If you see an increase, you are making progress towards your goal.

Measurement is far too often the step people skip as a part of their overall social media marketing efforts.  And yet, it truly is critical if social media is to be considered an effective business tool.  After all, if you did a party and at the end of the night you spent more than you made, you wouldn’t be in business very long.  The same holds true for social media.  Your time is valuable, and must be spent on activities that positively impact your bottom line.

Are you measuring the ROI of your social media efforts?  How?  Have you been inspired by new ideas as a result of this article?  Would love to read your thoughts in the comments below.

Photo Credit: Cambodia4Kids

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