One of the most common questions I get asked when talking about Social Media is how does one measure and report on return on investment.
Amazingly, there are some social media experts that talk about return on investment for social media in terms of reach, likes, followers of your accounts. Yet in 10 years of being in business i’ve never met another business owner who doesn’t think of return on investment in any other way than with Sales.
An investment is measured in £’s. Time costs money, services cost money, stock costs money, marketing costs money, everything you do in business has a cost. So a return on that investment must also be measured in £’s – not likes or shares.
The number of people that “like” your Facebook Page or follow you on Twitter does have a bearing on your return on investment – it’s akin to measuring your footfall outside a retail location. The more people that pass your way, the more chance there is of a few of them popping in to take a look around. The more people that pass your shop, the more sales you’ll could get. But comparing an arbitrary figure such as “likes” of a Facebook Page to ROI is pointless.
If you’re a regular user of social media you’ll be aware of a metric often called “Reach”. This is a figure based on the number of people that potentially saw your content (or how many people it reached). The bigger your “reach” the more people you have walking past your shop window. If you can increase your reach then you can potentially also increase your sales. However, any retailer will know that it’s not just the numbers of people walking past your shop that’s important, it’s who they are and how much they can spend that’s also important.
So just measuring reach is fruitless unless you’re also measuring conversion.
Lobster Engage is a new service we’re introducing for our social media clients that allows users to monitor all the arbitrary metrics such as likes, followers, and your reach but crucially it also enables you to monitor your conversion.
Using a small line of code that is added to your website, Engage will track visitors to your website that come directly from your social media activity and then report back on any that turn into enquiries or sales. You can also add a value to your conversion for average order value and cost of your campaign so you can get an overall figure for return on investment.
Another feature of Engage that we believe is really helpful is the Goal function.
If you’re simply updating social media without any kind of strategy or goal in mind then this could be perfect for you. For example, if you want to increase your reach (because the more people that pass your shop window, the more sales you’ll get) then you can set a Goal of increasing your reach, set a time to achieve the goal by and Engage will monitor and report back on how well you’re doing towards your goal.
For us, Lobster Engage is already proving to be a very useful tool in delivering social media services for our clients. It could do the same for anyone that is serious about their social media activity.
If you would like to try it out just drop me a line at firstname.lastname@example.org and i’ll set up a trial account so you can test it out for a month.