Are you looking for the best strategy to increase your profits? If you have been a business owner for a while, you can attest that marketing plays a vital role in the impact that your brand has in the market. One of the most effective ways to do marketing these days is by using social media, and one of the preferred ways that businesses from all industries like to measure the convenience of a certain project, is with the ROI (short for return on investment). Whether you have experience with marketing tactics and investment terms, or you are new to the business world, it is very advisable to have at least basic knowledge in these valuable matters. If the topic sounds interesting, you are in luck! In this article, we will discuss how you can achieve a higher ROI through a smart use of your social media accounts.
Measuring and following up on the social media ROI
One of the trickiest things when people in any kind of industry want to measure the impact related to a certain social media campaign, is the difficulty to track the numbers, because users on these platforms do not specifically click on a certain link or subscribe to an email list (these actions are called CTA or call to action). Fortunately, there is actually a metric or key performance indicator called social media ROI, which can be quantified in economic value or another kind of positive metric, for example, the amount of views that a certain video got or the number of new subscribers to our channel. The type of metric used to measure your social media ROI comes down to your business’ goals.
Does measuring social media ROI make a difference?
When starting to implement digital marketing strategies for the first time at a company, it is very common to find people from all levels and even from staff positions, who do not understand the importance that it has or don’t agree to the investments made, whether you call it money, work force, time. And while this reaction is very natural (it is part of the resistance to change that we can find when an innovative approach is taken), you may want to be ready with objective data that can show the positive influence that social media campaigns are having, this is when social media ROI comes into play. Thanks to this metric you can quantify the results of the efforts made, remember that a larger audience leads to building a solid brand and to potential sales.
Formula to estimate social media ROI
After reading through the advantages of an adequate implementation of social media ROI, you are probably eager to know how this powerful number is obtained. Now let’s get to the juicy stuff: earnings/expenditure*100=social media ROI %. Although this operation is very straightforward, it might be helpful to clarify that earnings refer to the money that you have obtained after implementing your strategy ( such as your sales income), while expenditure is the amount of money that you invested. This is a common formula that can help you quantify the convenience of a given project.