As therapists, we’re taught that we must use objective measures to track our progress in the clinic with patients. We use range of motion measurements, manual muscle testing, and other methods to demonstrate patient progress toward therapeutic goals. How ironic, then, that most of us have no idea how to track our efforts in the realm of social media!
We’re not alone in this, though. A recent article in Mashable reported that 84% of those using social media programs don’t measure their return on investment (ROI), with 40% saying they didn’t know if they could track ROI from their social tools. While it may be difficult to track the ROI of a social media strategy, it isn’t impossible. It just takes a bit of know-how and some dedication to the process.
This article explains the basics of measuring the ROI on social and contains links to some great resources. The article makes it clear that we need to have concrete goals and baselines in order to calculate ROI. Author Christina Warren states:
“Although ROI ≠ metrics, traditional web metrics like traffic counts, number of comments, Twitter followers, Facebook fans, etc., are an important component when calculating your ROI. The trick is to not rely solely on the numbers, but on what the numbers end up leading to. For instance, does your increase in website visitors correlate with higher sales? Are people that find your website from Twitter or Facebook then clicking on your product pages or going to the e-Commerce section of your site? That's the sort of data you want to be able to look for.”
From Oliver Blanchard's Social Media ROI Presentation on Slideshare, we learn that ROI = (X – Y)/Y, where X is the final value and Y is the starting value. For example, if you invest $5.00 and get back $20.00, your ROI is (20-5)/5, which shows that you got back 3 your initial investment. Blanchard explains that things happen in a sequence:
Investment → Action → Reaction → Non-Financial Impact → Financial Impact
Non-financial impact is shown through website visitors, click-throughs, Twitter followers, retweets, and positive word of mouth. Blanchard explains that the non-financial impact is not ROI (yet), but if we have an established baseline, we can create activity timelines. These timelines allow us to overlay our sales revenue, number of transactions, net new customers, and other metrics to get an idea of how much of a financial impact our social media strategy is having.
Formulas exist to measure the ROI of social media. The Angie Schottmuller article titled, "Social Media ROI: 14 Formulas to Measure Social Media Benefits" shares formulas for calculating tangible social media benefits, like advertising, content, leads, research, support, and sales. Additionally, this article details 50 ways to track website traffic, while this one gives you seven ways to become a Twitter analyst.
By taking baseline measurements of your business metrics, creating a strategy for social media, and tracking your progress with specific formulas, you can have some objective idea of whether your intervention is helping you reach your goals—just like we do every day in the clinic.
How are you tracking the ROI of your social media strategy? Share your thoughts in the comment section below.