Logical Approach to Measuring ROI

social media for small businesses

If you can’t measure it, you can’t control it.

Many argue, correctly to some extent, that social media is just one tool in the overall marketing mix. My view is that we need to look at social media holistically. Like all your business initiatives, you should be able to measure the return on the time and investment you put into social media. Measuring Social Media ROI is in many ways a complex task. E.g. how do you ascertain the value of a Facebook like, or a retweet, follow or share?

How do you measure value?
In essence, when measuring social media ROI you are effectively attempting to measure the value it creates for your stakeholders. There is no one size fits all approach to measuring this as different businesses use social media differently. Some small businesses will find deeper value in direct engagement and focusing on individual clients to influence them over a period of time than others. When viewed as a whole, social media is a complex mix of social and marketing elements.

Metric-driven method
What is important is that you focus on metrics which are aligned with your overall business strategy. Whether your aim is to strengthen your competitive positioning or to cultivate a consistent line of communications with your stakeholders, you can only find out if you are on track if you can, to the extent possible, effectively measure the end value your efforts are creating.
It’s not possible to precisely measure the ROI only in financial terms and there are non-financial indicators we must take into account. Simply put, social media has both quantitative and qualitative aspects.

Before starting out, you must be able to answer the following questions:
1. Where do you see social media in your overall marketing strategy?
2. What non-financial benefit do you get from social media?
3. Do you see social media as a short-term or a long-term investment?
4. How does social media contribute to the likeability of your brand?
5. What is your ideal social media split (tangible and intangible goals)?

Quantitative Measurement 
1. Referral Traffic – Google Analytics – to show the increase in the traffic to your website from social media channels.
2. Another metric is using a measurement tool to measure the number of mentions a brand receives over the course of a 3-month period and identify trends.
3. Number of likes/followers, retweets, engaged users etc.
4. Tracking the number of mentions for brand-specific keywords using tools such as Google Alerts.

Qualitative Measurement 
1. Compilation of most effective/interesting comments, shares etc.
2. Seeking feedback from clients and highlighting testimonials
3. Are you among one of the influential sites in your field? If not, why?
4. Exploring avenues to become a thought leader
5. Identifying brand ambassadors – frequent visitors/supporters
6. Building influence

Even though one can’t quantify everything, it’s still important to develop a metric-centric approach to social media measurement.

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