Social media is an essential tool to make any case work. It doesn’t matter whether you’re operating a business, promoting an event, or building your career. If you don’t use social media for it, you won’t find success. Why?
It’s because social media has people. There are 4.74 billion users who log into their accounts daily, so social media proves to be the best way to reach out to your target audience.
But how do you find out if your efforts are paying off? Most people would look at likes for Facebook and Instagram. Although that’s not wrong, there is more to measuring the results than likes.
So, in today’s article, we will talk about social media ROI. Let’s dive in!
What Is Social Media ROI?
ROI is a short form for return on investment. Social media ROI means the return you get on the investment for social media activities. This includes everything from deciding the post schedule to running ad campaigns.
All your time, money, and efforts used for those social media activities will be counted as an investment. With ROI, you learn how successful you were. Did your investment make a profit, loss, or break-even level?
Here’s what these terms mean:
● Profit: the amount left after subtracting expenses from the revenues.
● Loss: the amount lost by a business.
● Break-even Level: the point at which the expenses are equal to revenues. There’s no profit or loss.
So, if you’re making a profit or achieving a break-even level, your efforts are paying off. However, if you’re making a loss, you need to up your game!
How to Prove Your Efforts Are Paying Off?
Social media ROI is a measurement, as discussed above. But how do you measure it? Let’s find out!
Define Your Social Media Objectives
First, you need to have clear and specific social media objectives. What are you trying to achieve through your activities? Typically, businesses have these goals:
● Create brand awareness
● Increase sales
● Promotion of an upcoming product launch
● Boost customer satisfaction
Your goals can be any of these or a combination. Whatever they are, make sure to document them.
Set Your Metrics
Depending on your goals, you will set certain metrics to assess your performance. For example, if your goal is to increase sales, you will calculate the total revenues generated from your social media campaign.
Some common social media ROI metrics include:
● Post reach
● Likes, comments, and shares (engagement)
● Website Traffic
● Inquiries & leads
● Form sign-ups
Once your metrics are set, decide the timeframe upon which you will assess them. The time frame can be less than, more than, or equal to the campaign length.
Use the ROI Formula
Now, you will use the ROI formula to know the success rate. Here’s the simple formula:
Output/Input x 100= Return on Investment
To use it, first, calculate the expenses of your social media activities (input). Of course, not everything will have a monetary value attached to it, like time and effort. You will have to add value to it yourself.
For example, if you spend 14 hours a week building your social media, how much will you pay yourself for it? Consider yourself an employee and decide your pay according to the time and effort required.
Similarly, when calculating the output, attach a monetary value to each Like, form sign-up, or whatever the metric is. This will help you find how much you achieved. Put the final input and output value in the formula and measure the ROI.
Create a Social Media ROI Report
Lastly, create a proper report of your results. This documentation will help you compare the performance with future social media activities.