So, you’re working heavily on social media. You have tons of likes, follows, and shares. But you’re just unsure of what it all means. You don’t really know how much revenue is exactly being generated. This is a very common problem, and it’s something that should be quickly addressed. All of the time and effort that you’re spending on social media strategy could be for nothing if you do not really know how well it is performing.
The Most Important Step
The very first thing you should do is place traceable links on every single social media post. This means that every single link to your website is tracked.
Yes, “likes” and shares are important, but they necessarily don’t equate to sales. This is the first thing that you should understand.
Once traceable links are set in place, tracking ROI will become much easier. Below, I’ll list some must-know metrics for your social media strategy.
The Amount Clicks to Your Website
This metric will show how many people are visiting your website from your social media page. This is a very simple metric to track and understand.
The “Original Click” Metric
Perhaps there is a more sophisticated name for this metric, but for now, we’ll call it the “original click”. When a sale is made, this metric will trace back to the exact point where that customer was brought to your website. If that customer is traced back to a social media link, that sale is credited to your social profile. Even if the customer bought something for your site 6 months in the future, if he initially accessed your site via social media, that sale will be credited to social media.
The “Original Optin” Metric
This is the same concept as the “original click” metric, except it looks at what link or click the initial opt-in came from. So, let’s say a sale gets made from an email, but you want to check exactly where that customer first opted in. This metric will determine if the sale originally came from a social media post. If so, social media will be credited for the sale.
The Last Interaction
If the last click to your site was from a social post, social media will be credited.
How to Measure the Costs of Social Media
So, now that you know how to trace how social media is impacting your revenue, it’s time to track costs. This is something that is much easier than tracking social media revenue but is still largely ignored by marketers.
So, here’s the question that you absolutely need to answer: How much are you really spending on social media?
At the end of the day, here’s the hard, cold number that you need to know: Cost per engagement.
What’s a cost? Think of it like this:
Are you paying someone to run your social media pages? Are you doing it yourself? If you’re doing it yourself, you need to attach a price for every hour you work. So, if you work 10 hours a month, and you price yourself at $100 per hour, you are essentially spending $1000 per month on labor. Do you pay for any software or tools? All of this needs to be accounted for.
What’s an engagement? Here’s a simple list to make it easy for you:
Different social platforms will have different types of engagements. But it’s basically any type of interaction someone has with your social profile.
Let’s say that you have 1500 engagements per month. And let’s say that you spend a total of $1800 per month on social media.
You will divide your total cost ($1800) by the number of engagements (1500).
$1800/1500 = $1.20
For each engagement, you would be spending $1.20 on each social media engagement.
This model works great for engagements, and it works just as well for sales tracking.
Earlier in this post, I said that engagements don’t necessarily equate to sales. Your revenue, at the end of the day, is your most important metric.
Just like we did for engagements, we will do the same for sales. So, using the tracking methods in the previous sections, you will want to add up the number of social media generated sales for a given month.
Let’s say that you have a total of 50 social media generated sales for that month. You still spend a total of $1800.
$1800/50 = $36
You would be spending $36 per sale.
While that $1.20 per engagement sounded good, the $36 per sale metric can be much more of a concrete metric that can help you understand whether or not your social strategy is worth it.
You can never know if your social media strategy is effective without knowing how many sales it brings in and how much money you’re spending on each sale. This will tell you if you need to make adjustments on your strategy, or if you need to continue on the same course. Follow the tips in this post to get a clear idea of the effectiveness of your social media.
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