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Social Media ROI: 3-Steps to Effective Measuring

Author: LHAWorld Inc.

Date Posted: August 11th, 2011

Whether you’ve already joined the social media revolution, or are simply taking a “wait and see” position, the question of return-on-investment seems to be on everyone’s minds.

We know that a solid social media plan can be effective in many ways including:
• Improved website ranking / SEO
• Increased website traffic
• Successful event promotions
• Increased retail foot traffic
• Greater product sales

But how do we isolate and tangibly quantify the real results of social media?

There are many different metrics you can use – some more meaningful than others. For instance there are those that measure Social Media Audience Growth (number of followers, fans, subscriptions, etc), Engagement Metrics (number of Tweets, forwards, ratings, endorsements, comments, etc), or Influence Metrics (how social media is affecting your target audience’s perceptions and attitudes about your brand). But these methods are very difficult to assign definitive values to.

One of the better ways to monitor social media success is simply to use your Google Analytics to monitor the specific traffic that comes directly to your site from the various social media channels. Where are they coming from? What is compelling your social media visitors to click onto your website? Where are they going once they get there?

Evolving technologies like campaign tracking strings on social media links back to your website, last-click transactions, or Google +1 now allow better measurement of online activities. You can easily track spikes in your online social media channels to determine the most successful of the social media links. And this information is invaluable to test different promotions or tactics in real time to refine the most effective approach.

But how do these methods measure the impact of leads, conversions or sales that come to you offline (not directly through the social media channels) as a direct result of a social media engagement with your brand?

The answer is to apply the nuts-and-bolts measurement techniques used with all successful marketing initiatives. These techniques include ways to measure increases in leads, conversions, and SALES. It is a simple 3-step approach:

1. Before you are able to measure any social media approach, you must first set the baseline of where your numbers are today – your sales, leads, and leads-to-conversion numbers – before any social media has been added into your marketing mix. This becomes your reference point, or measuring stick to determine the effectiveness of your future social media activities.

2. Incorporate any (or all) of the above measurement techniques to assist in monitoring ongoing results. Also include unique codes and landing pages to further help clarify the online activity.

3. Then – after a predetermined period of time – use your baseline to calculate the before and after growth in the specific areas you defined at the onset of your social media marketing program. This allows you to see the actual results – your return on investment – of your social media marketing efforts.

One thing is for sure: social media is here to stay. It is a new way of thinking, a new way of shopping for products and services, and a new way of buying. Regardless of if your world is business-to-business (B2B), business-to-consumer (B2C), or even business-to-government (B2G), the use of social media marketing channels should now be a part of all integrated marketing programs.

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