Measuring Social Media Return on Investment

Here’s a basic equation for measuring social media return on investment …

Social Media Return on Investment ROI

And here’s an example of measuring social media ROI in a typical situation …

Social Media Return on Investment ROI

The question with any ROI is “Is this a good ROI?”  The challenge is to compare your social media ROI versus other forms of marketing.  For example, how do your social media tactics compare to more traditional marketing channels such as tv, radio, print and direct mail?  Calculate the ROI on each of these and do the comparison.

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  • When sales are done online, or referrals or leads are generated online, getting to the new sales metric can be relatively straightforward (if not always easy). But how would you know how many more sales were generated by familiarity, awareness or event the greater customer satisfaction?

  • You can usually measure these metrics through customer research, including surveys or post sales questionnaires. At the end of the day, it will require some level of manual interaction with the customer to determine what drove the sale. Depending on the sales volume you may need to speak with every customer or just a statistically significant sample.