These days, it’s pretty much a given that your business needs to have a digital and social media marketing component. And the businesses that don’t currently have one are scrambling to hire people to implement these strategies into their marketing model to quickly get with the times.
Amidst all the hype, how do you actually measure the return on the money and hours you spend developing an online presence? As it is, there really is no tangible measurement for social ROI.
We’d all like some Benjamin Franklin’s (or Robert Borden’s for us igloo-residing hockey players) to materialize out of thin air every time we purchased a Facebook ad—but unfortunately, it doesn’t work that way.
So what can we do to measure ROI for our digital marketing efforts?
1. Face the Music
The first thing you must do is face reality. Understand that, especially if you are a smaller business, money will not come back to you right away from your social and digital marketing. No, it will not be “raining dolla signs”; and in the words of Big Sean, there will not be million dollar deals on your email.
Many businesses will find it hard to tie digital marketing to direct improvement in sales. However, it can benefit your business in other ways—even if it’s growing your Facebook page.
Needless to say, social marketing is vital for building your brand, and connecting with your users to provide outstanding customer service. If you create a sustainable social strategy, in the long run, you will see a more visible growth in your user base, and a great satisfaction level from your customers.
2. Know What You Want
How will you ever measure success if you don’t know what you’re trying to achieve?
There’s a surprising number of people who would hire a social media marketing assistant to grow their business; but if you sat down to ask them “what do you want?”, they probably wouldn’t know what to tell you.
In order to gauge how successful (or unsuccessful) your marketing efforts are, it is important to set goals. This helps you set concrete expectations in terms of what how much time and money you want to put in, and how much you are hoping to receive in return.
This way, you can conduct a periodic audit of your marketing to see whether you are meeting your goals and whether your costs are actually worth it.
3. Track, Track, Track
So you understand the situation and have set yourself a goal.
If you were following a weight loss or body training plan, you would find yourself doing a similar thing: setting expectations with a trainer, having a goal weight, and then tracking your weight, food intake, and exercise periodically.
The same thing applies to your digital marketing: track, track, track! This is the only way you would be able to analyze fully if your input equals your output; that is, if the money you’re spending is giving you suitable ROI.
You want to set up a tracker to follow the time you’re spending, the direct cost of ads, and any return (likes, shares, and social activity) so you can begin to understand the bigger picture of your social marketing impact.
4. Understand Your Reach Metrics
There are different metrics to measure your social reach—traffic, leads, customers, etc.
It is important to pay attention to your leads and your customers—more importantly, the conversion rate, which tells you how many of your leads are actually turning into customers.
Many companies will focus solely on lead generation; however, leads aren’t anything. You can have hundreds of leads, but if your social and online platforms are not prompting them to continue their journey with you, they are meaningless.
If you notice that your leads are not turning into customers, you might need to optimize your digital marketing to push them further along and convert them into your customers.
5. Know What Your Conversions Are Worth
The reward from your investments will not come only in an increase in sales, as we talked about before. To realize a real picture of what you are getting out of your marketing investment, you must know what each of your individual conversions are worth.
This means that if you want to make an equation out of all this, you will have to give your conversions each a bottom line value.
For example, in Google AdWords, you can assign values to your conversions. Note that there are different ways to how you might choose to value your conversion.
You can assign your conversion a static value, which does not change; this is helpful if you want to separate the value of each time of interaction on your website (i.e., sign up, purchase, searching up a location, etc.).
You can also assign your conversions dynamic values, which change even when the same conversion occurs. This is useful in online stores and with e-commerce; the type of interaction—in this case, a purchase—will remain the same. However, a different value might be assigned depending on how many items or how much the person purchased.
In closing, measuring ROI for digital marketing is not such a hopeless case after all. The important thing is to know what you are looking for and being able to track your input and output. Now, go forth and make those Benjamin Franklin’s rain (very, very figuratively speaking, of course… we all know there’s only one Benjamin Franklin).