When evaluating social media campaigns, it’s easy to get distracted by the metrics that don’t have a direct correlation with revenue goals: Twitter Followers, Facebook Likes, social mentions, etc.
While these measurements are all good to have, when it comes to measuring ROI, it’s necessary to translate social actions into quantitative reports. An increase in social engagement will not satisfy those only looking at the bottom line unless you are able to demonstrate a (positive) relationship between the two.
Set Goals & Survey Starting Points
•Clearly define what you’d like from a social media marketing campaign. Is your end goal increased revenue or better customer loyalty?
•Before moving forward, calculate and record the baseline for all relevant metrics associated to each of your goals: sales data, % returning customers, website traffic rates, average conversion rates, traffic sources, etc.
•Later you can compare this information to the same metrics after implementing social media campaigns.
Record All Social Media Activity & Track Metrics:
Be sure to carefully note the dates and times of all major social media initiatives.
Assess the social engagement indicators:
• Social mentions
• Website Traffic
• Click through rate from social media sources
• Comments, responses, and re-sharing of content
Assess financial indicators:
• Sales revenue
• Number of transactions
• New customer growth
• Average order amount per customer and transaction
Assess non-digital Metrics (if applicable):
• Brick & Mortar store traffic
• Special event turnout
Calculate Cost of Social Media Efforts:
•Realistically measure and record how much time and resources are spent on social media work.
•You may be able to offset some of these costs with savings from existing costs. For example, customer service or PR resource needs that are reduced thanks to social media outlets.
Prove Quantitative Financial Patterns:
By layering the baseline measurements, the social engagement figures, and the financial outcomes, you will be able to demonstrate number-driven relationships between social media campaigns and ROI.
ROI = (Gain From Investment – Cost of Investment)/Cost of Investment
Common Twitter Marketing Examples For Ecommerce & How to Measure ROI
Promoting a Specific Product or Merchandise Category via Twitter:
In the examples below, both Diptyque and Michael C. Fina are directly promoting a specific product and category. Each includes a link directing users to a landing page that can be tracked. In order to calculate the value of these Twitter efforts, these brands can measure the click through rates of the links and the difference in conversion rates of the promoted products before and after the time of the tweets.
Promoting An In-Store Event via Twitter
When Twitter is only one of many marketing voices used for promoting an event, you’ll need to go back to the data gathered as a baseline. How many fans attended in-store events before Twitter was used and what was the resulting sales revenue? Is there an increase in attendance and sales after broadcasting via Twitter?
Promoting An Online Promotion via Twitter
Similarly, unless you are promoting solely through Twitter, you will need to compare baseline numbers when advertising a discount via multiple channels. You can also test across different social media platforms. For example, how many Twitter followers convert vs. Facebook Fans for the same discount?
Big changes have been happening recently for Twitter, so for the next social media post, we will explore the latest redesign and new features announced by the platform.