Often times, people tend to think of social media as a platform that promotes entertainment and social interaction. While this is true, it is not the whole truth. Social media can also be a great tool for measuring how that interaction translates to success for your business-- your Return on Investment (ROI). There are a number of methods that may not seem as though they could contribute to measuring your profitability with social, but once we take you through a few of the options, you’ll wonder why you hadn’t thought of these methods earlier!
1. Develop Goals
When it comes to profiting from social media, it’s important to establish what you’re working towards with your interactions. Developing goals for your business is one way that you can gauge how well you’re doing. For example, you may set the goal to have a certain amount of clicks or online purchases by a specified date. If this is the case, you’ll know whether or not you reached that goal by looking into the analytics of your landing pages and how many social referrals got them there.
2. Assign a Dollar Value
Sometimes we forget our self-worth, but investing in social media is not a waste of time. It’s important to convert your time and goals into a dollar amount that can be tracked. For every new follower or click to your website, attach an amount to assure that you’re following a path to profitability, even if it’s only hypothetical for now. This may mean assigning a $0.60 value to every Facebook like or $0.80 for every thousand impressions when it comes to your reach. This can be calculated by taking a look at where your company currently sits in comparison to where you would like to be. If you set an amount that’s too high, you may find yourself disappointed. Be reasonable based on how your site is progressing.
3. Goals + Dollars = ROI
The first step is determining what your hourly cost is towards social media efforts. This can be done by taking your hourly rate and multiplying by the number of hours you’ve committed to social media. Once you have this value, you’ll want to calculate how much you’ve spent towards boosting posts, and promoting your ads. Finally, add up the cost of all the outside sources required to run your social media pages, including the tools necessary in keeping your sites live and up to date. Together, these three costs will total your investment towards social media. To find ROI, you’ll simply take your return, whether it’s an actual dollar amount or the hypothetical value you’ve assigned, and subtract your investment. Once you have this value, you’ll divide it by your investment to receive your Return on Investment. Voilà!
Measuring your ROI doesn’t have to be an impossible concept. With a bit of brainstorming and a dash of planning, you can have the information necessary to keep your social media efforts on the path of profitability! Remember, your goals can always change and adapt to the success of your business. If you find that your site traffic has doubled, set a new goal with higher values to keep your social media at its highest potential!