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How can you measure the ROI of your social media activity?

6th July 2016

Social media appsWe talk a lot about having to invest a lot of your time into your social media and digital marketing.

But we appreciate that many of you don’t have enough time to do your actual jobs, let alone add this into the mix! We are asked over and over, what do I have to invest to get out of it? If I spend 3 hours a week on Twitter will that equal 3 new customers? If I spend £200 on Facebook advertising will I make 10 times that the following month? Ultimately, you want to know what ROI you get from investing all that time in your social media.

However, it really isn’t as simple as that. Digital marketing in general is very different to how business used to be. Measurement of your offline marketing could be managed, depending on where you targeted your advertising equating to how many people signed up. This doesn’t happen anymore, and for a number of reasons.

Firstly, it is important to remember that the reach and the value of social media is so much bigger than old school marketing. However, this isn’t ever appreciated until later on down the line. Secondly, it is virtually impossible to measure the customer journey from the first time they saw you, or what was the deciding factor in them deciding to buy from you.

Of course you can use Google Analytics to see how many clicks you get to your website or your blog from your Facebook page, for example, but this still doesn’t give you a clear picture of why the customer clicked. Was that the first time or the tenth time they saw your link?

We want to keep things simple so please do imagine the (very typical) scenario;

Business creates website and pages on Facebook, Twitter and Instagram. Business posts once a week on each channel if they remember and concentrates on building their service. Business doesn’t engage with other businesses on social. Business doesn’t blog or send out newsletters. After 6 months business is still not growing. Business blames social media for not bringing in customers.

However, imagine the flipside;

Customer spots business post on Facebook, may pause briefly but doesn’t click ‘like’. Customer doesn’t see another post due to Facebook algorithms. Customer isn’t on Twitter or Instagram. Customer doesn’t receive a newsletter. Customer doesn’t have the business in its periphery. Customer doesn’t buy.

Evidence shows us that it takes 6-8 touch points to generate a viable sales lead, and that’s a minimum. It is very rare, and almost impossible that a customer will see a social media post and decide to buy there and then.

Therefore, the importance of targeting your digital marketing through a wide range of channels is fundamental. Of course, they need to be the channels where your customer hangs out, but make sure you are on all of those channels! Which social media platform is right for you?

Consumers are now more interested in buying from a company that they have prior knowledge of, or who has been recommended to them. Customers want to trust the business that they are buying a service or product from, and they aren’t interested in a purely ‘sales’ tactic that the company may want to project.

By using social media, your business can help you interact and engage with an enormous number of people but also helps you target your message to the right place. Think about the customer experience and how can you help nurture that relationship with them. Don’t think about short term sales, but more long term relationships. You not only want that one potential customer to buy from you, but you want them to recommend you to all of their contacts too.

Now imagine the (very possible) scenario;

Business creates website and pages on Facebook, Twitter and Instagram. Business posts regularly about news of their industry. Business engages in Twitter chats. Business sends out a weekly blog and monthly e-newsletters to all their subscribers. Business builds trust and loyalty amongst customers.

Customer sees business post on Facebook, but doesn’t click ‘like’. Customer receives newsletter offering a free trial/consultation. Customer doesn’t respond. Customer hears recommendation from friend who saw business on Twitter. Customer bumps into business at a networking event. Customer reads blog shared by friend on LinkedIn. Customer needs service. Customer thinks of business.

By being in all the right places and creating opportunities for your customer wherever they may find you, will ultimately help you stick in their mind when they need you. This is why it is so hard to measure the ROI of your social media activity, or your digital marketing, because how do you know which post/advert/retweet was the one that convinced them?

So it’s probably time to stop thinking about the ROI of your social media activity, and more about the relationships that you know you have built from using social media and how you can help them to grow.

If you would like any help or support with your social media marketing please don’t hesitate to get in touch.

To finish, we’d love to share this video from Moz about your digital content marketing, which really helps explain how it works.