Determining return on investment (ROI) from social media marketing strategies helps businesses make important data-led decisions. This is because it shows the monetary value gained from social campaigns, allowing marketers to keep implementing those tactics that work, and give up on those that don't. Let's look at how to measure social media ROI and what can be done to boost it.
How is social media ROI calculated?
Before diving into the calculations, first you must establish clear goals – is the aim to measure brand awareness? Leads? Or sales? Depending on this, track the relevant social media metrics, for example, engagement, reach, leads and conversions.
Then, assign monetary values to these, based on aspects like customer lifetime value (CLV) – the forecasted total net profit generated from a customer over your entire relationship. Finally, consider costs like staff time and ads.
Now you can start calculating. To find out your ROI, take the return gained from social media campaigns and divide this by the investment made. Essentially, a positive percentage means that you are making money.
Tips to improve social media ROI
Like with anything in business, there's always room for improvement. So, no matter what your social media ROI is, consider the following.
Understand your audience
Keep an eye on your social media analytics to find out who engages with your business on each platform, and use this information to create detailed buyer personas.
Optimise your content
With this data, create engaging content that resonates with your target audience. Always favour quality over quantity, and make sure to include eye-catching images and videos.
Partner up with relevant influencers to widen your reach, and consider influencer marketing for B2B too.
Test and optimise campaigns
It's important to stay on top of the latest trends, so experiment with new ad types and target audiences to determine what produces the best results.
Written by: Stephanie Clark