What is the best way to measure a return on your social media strategies?

Perhaps the most frequently asked question when it comes to developing social media strategies for a client is how they can expect to measure a return on their investment. There are a number of factors one can look to when determining what the return might be on social media strategies, and we’ve detailed a few of those below.

Growth of Your Networks

One of the simplest measurements one can look to when evaluating a brand or client’s social media strategies is the growth of one’s networks. Yes, this is a superficial measurement and it seems like a given, but people often forget about the non-fiscal measurements of a return. If a strategy is in place, then the growth of a follower base on Twitter or ‘Likes’ on Facebook means that a very targeted audience is interested in what you have to say, and that is certainly a valuable return. Nearly every one of those contacts is a lead, and knowing how that pool is growing is important to the next steps of any program.

There are number of areas one can look to in order to determine what this growth looks like. For example, Facebook insights offer a tremendous amount of information about your followers. Self-reported demographics like age, gender, location and education are made available to brands on Facebook, and this can help you tailor offers and content to those groups.

Carefully Monitor Your Campaigns

Facebook and Twitter campaigns are a great way to generate some quick sales and new customers, but make sure you are not simply implementing the campaign and watching sales come in. You need to know exactly what your rates of return are in order to maximize the profits generated from the campaign. This, again, should be carefully planned using some of the insights at your avail on different social networks. If, for example, you find that nearly all of your fans are females under 25, don’t offer a product geared towards older males. You might want to start attracting that demographic to your page, but that’s best saved for content as opposed to spending on a campaign.

The last point to consider is when you are not able to monitor your return in a fiscal manner. How do you show a return from social media strategies when there is no direct measurable return from your efforts?

Noting Intangible Returns

Time for some statistics! It’s not going to get terribly complicated, but you will need to do a little research to measure intangible returns from social media strategies, but trust us, it will all be worth it. Intangible returns tend to be the most impressive, and if you can show them properly, it will get your client on board with your social media program no questions asked.

The easiest way to go about this is by taking into account increased benefits as a direct result of the campaign. Say for example, you go through some numbers and deduce that the customer lifetime value (CLTV) for you or your client is X dollars. How this is determined depends on what you or your client offers. You can then study the number of new customers acquired as a direct or indirect result of social media (easily monitored with a Google Analytics Social Dashboard) determine the overall value brought to you or your client’s company as a result of social efforts and implement the following formula:

[(total value added-program cost)/program cost]x100=% ROI

If this generates a positive number, you have gone to show that percentage value added of your social media strategies. (Good job!)

Can you think of any other measurements for the return of social media strategies? Tell us in the comments below or on Twitter!