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Social Media ROI: How to Ensure Your Social Media Efforts Pay Off

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In this article, you'll learn...

  • How to measure the effectiveness of your social media marketing
  • Three steps to ensuring you can measure the ROI of your social media efforts

Social media marketing can either be an extremely worthwhile investment for your business or a massive time sink that brings little or no benefit. Unfortunately, in the short term, telling those two extremes apart is not always easy. How much is a Twitter follower worth? Can you put a value on the number of times your business is mentioned on Facebook?

First, you need to understand the social media strategy-development process. How can you start measuring return on investment (ROI) if you do not know the steps you need to take to create a campaign? Knowing the process allows you to look at each step from an ROI perspective.

social media guide to success

The clickable image to the left leads to an interactive visualization (courtesy of Simply Business) that provides a step-by-step guide to developing a social media plan. (For further reading, check out the resources noted in each section of the interactive version of the graphic.) Once you understand those steps, you need to start thinking about ROI.

Initial Steps

Here are three initial steps to take that'll ensure your social media strategy is set up to measure ROI.

1. Have a clear motive

Before you kick off any kind of social media strategy, you need a clear idea of what you're trying to achieve. Diving in without a set of objectives (e.g., improving customer service, increasing online sales) means you won't be able to identify social success.

2. Establish what success looks like

Unless you assign some hard numbers to your objectives, you'll never be able to establish how successful your social media efforts are. If you are unsure what the social sphere looks like in your industry, look into market research companies or conduct analysis independently to better understand what the social landscape in your niche can provide. (Because this step is so crucial to attaining social media ROI, I've included more guidance on it below.)

3. Learn how to measure

From goal conversions to inbound links, pairing measurements with your social media objectives is how you'll begin to understand your ROI. At Salesforce, we've put together a comprehensive guide to social media analytics, but the remainder of this article also offers a robust summary of how to get measuring.

What Success Looks Like

With a few business objectives for your social media strategy in place, working out what your success looks like will be much easier.

Here are three quick tips to get you thinking along the right lines:

  1. Traffic vs. conversions. A lot of traffic looks great in your analytics, but it doesn't always deliver value. You shouldn't forget the fringe benefits of having lots of eyes on your site, but 500 visitors with a high conversion rate are more valuable to your business than 20,000 visitors who never bring you a dime.
  2. What is a "conversion"? In social media marketing terms, a conversion can be anything from a sale to a newsletter sign-up. Look at the various steps in your sales funnel, and consider what your earliest possible conversion could be.
  3. Followers vs. fans. Don't set your sights on gaining thousands of followers on social networks. They can be bought very cheaply, and they bring little value. Instead, identify what a fan looks like for your business, and set incentive targets for acquiring those types of fans.

Determine How to Measure Results

Once you know what social media success looks like for your business, figure out which direction you'll take and how you'll determine that you've arrived at success.

You will measure the effectiveness of your social media efforts by collecting data from various sources, including the social sites you're marketing on and external analytical tools.

Here are a few ways to measure the data output from the most popular social media platforms.

1. Twitter

What to measure: Follower counts, traffic, reach, and conversations

How to measure: Counting followers is easy, and you can measure conversations by looking at the number of replies and direct messages you receive.

Twitter will record the most recent activity, and a tool such as Topsy will help you find older content. Several tools are available to help you measure your "reach." TweetReach is the most straightforward.

Measuring Twitter traffic for a while was tricky (because so much came via third-party software), but Twitter's introduction of its URL shortener ( removed that problem. Simply add a "+" (plus sign) after the URL, and it will bring you to the information page that tells you how many clicks that URL received.

2. Blogs and Forums

What to measure: Traffic, citations, and links

How to measure: Use Google Analytics for traffic, Google Alerts for citations, and an inbound-link checker such as Google Webmaster Tools or SEOmoz's Open Site Explorer for links.

3. Facebook

What to measure: Engagement, fan counts, traffic, and reach

How to measure: Facebook Insights is the network's own analytics center, and you can use it to track and measure most key metrics for the site. Bear in mind that you will often want to differentiate between traffic visiting your Facebook page (use Insights) and traffic visiting your main site (use Google Analytics).

4. Google +

What to measure: Follower counts, +1s, and traffic

How to measure: As the social network from Google, Google + obviously has some nice tools to help you measure its key metrics. For example, Google's Webmaster Tools will help you measure the effect of +1s on click-through rates, site-wide +1s, or just the +1s of an individual page.

* * *

Once you get a handle on what your business is trying to achieve via social media, you can start tracking variables to measure the ROI of your social media efforts.

Remember, social success is possible; you just need to know what it looks like when you get there.

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Kieran Flanagan is inbound marketing manager for EMEA at Salesforce, a leader in CRM solutions that just launched its new Social Success resource site in the UK.

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  • by Michelle Mon Mar 5, 2012 via web

    This is great information. Including the interactive graphic that leads to more info is going the extra mile. Sometimes it's hard to explain the tangible benefits of marketing. It's great to see a how-to for planning and measuring social media effectiveness.

  • by Patrick Zuluaga [PMZ Marketing] Mon Mar 5, 2012 via web

    It is great to see educational articles discussing conversions and mesuring results that add real value to the business. Many a small business owner needs to understand that social media marketing must deliver conversions to be of real value to your business.

  • by Shelly Lucas, Dun & Bradstreet Mon Mar 5, 2012 via web

    #1 is so important! You must know what you’re trying to achieve before determining how you will measure it. In fact, as Olivier Blanchard points out, the question is not so much “What’s the ROI of social media?” as “What’s the ROI of [insert activity here] in social media?” Your goals should, in fact, determine which social activities you engage in. And, as you point out, Kieran, financial KPIs may not apply to every goal—e.g., qualitative conversations. We also need to consider which metrics are relevant to the specific role to which we’re reporting our results. For example, a C-level executive would be interested in how social has decreased costs and/or increased sales. Digital marketers may want to know how social has contributed to lead generation and/or how it has improved brand perceptions. Social strategists, on the other hand, may be more interested in their social influence—how have their social activities changed attitudes/actions of their communities? How engaged are their fans and followers? Risk managers will want to know how social has made teams better prepared to respond to issues that impact brand reputation.

  • by Sean Grace, CoupSmart Wed Mar 7, 2012 via web

    Very helpful tips for business owners, many of which have jumped into social media without clear objectives or a way to know how these efforts are impacting sales. Following these steps could do a lot towards organizing a social strategy and seeing some returns from it.

  • by Marcella Fri Mar 23, 2012 via web

    You said that: - Measuring Twitter traffic for a while was tricky (because so much came via third-party software), but Twitter's introduction of its URL shortener ( removed that problem. Simply add a "+" (plus sign) after the URL, and it will bring you to the information page that tells you how many clicks that URL received.

    I haven't understood how it works.
    Could you explain it more?
    many thanks

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