18 ways to measure the ROI of social media for small businesses

18 ways to measure the ROI of social media for small businesses

To help small businesses effectively measure the ROI of their social media efforts, we asked 18 industry experts, including founders, CEOs, and marketing professionals, to share their insights. From tracking qualified sales to gauging brand awareness growth, discover the top strategies these experts use to inform their social media strategies and drive success.DEEPER DIVE: Forecasting 2023 PR and marketing trendsCount Your Qualified Sales Utilize Conversion Pixels EffectivelyMonitor Engagement Track Conversions and Optimize ContentAlign Social Objectives with Business GoalsFocus on Social Media Conversion RatePrioritize Authentic EngagementUtilize Customer Lifetime ValueFactor Time Spent in ROIEvaluate Efficiency with Cost per AcquisitionCompare Profits with ExpensesEstimate Success with Click-Through RateAssess Referral TrafficTrack Influencer CollaborationMeasure Reach and ImpressionsConcentrate on Customer ExperienceIncorporate Facebook Pixel and Google AnalyticsGauge Brand Awareness and Share of VoiceCount Your Qualified SalesAlthough there are lots of metrics that can be tracked to measure the ROI of social media, I personally count on the number of qualified sales. For many small businesses, this could also be the amount of exposure or publicity. Tracking the number of qualified sales ensures that I can track the effectiveness of my strategy and further experiment with new tricks to increase the ROI.Arsh Sanwarwala, Founder and CEO, ThrillXUtilize Conversion Pixels EffectivelyMeasuring the ROI of social media can be a tricky problem to overcome, but not if you use conversion pixels. This involves adding a small piece of JavaScript code to your website or to particular advertisements, which then tells you each time the link is clicked on. You can then work out how many times customers have placed an order after using the link you have provided. More than this, however, it will tell you information such as how many times a video has been watched, how often your post was shared, how many subscribers you have gained through the advertisement, etc.Using the data supplied, we have been able to craft posts that have been relevant and interesting to our audience, and also, what ideas can be dropped due to lack of interest.Jonathan Elster, CEO, EcomHaloMonitor EngagementMonitoring engagement metrics like likes, shares, comments, and clicks is one way for small businesses to gauge their social media investment return. These metrics show audience involvement and aid in determining the reach and engagement of social media initiatives. Through post-performance analysis, audience research, and approach modification, I have used these indicators to guide my social media strategy. Additionally, monitoring conversion metrics like website traffic and lead generation offers information on how social media directly affects business outcomes. This data-driven method helps me increase ROI for my small business and optimize my social media strategy.Michael Lees, Chief Marketing Officer, EZLeaseTrack Conversions and Optimize ContentI measure social media ROI in my personal training business by tracking conversions. For instance, I’d create an Instagram campaign offering a free session. By placing a unique link in the campaign, I can track new client sign-ups directly to it. This process illuminated surprising insights, like personal fitness stories generating more client conversions than professional advice posts. This data-driven approach reshaped my social media strategy, optimizing content and ultimately driving more business.Evander Nelson, NASM-certified Personal Trainer, evandernelsonAlign Social Objectives with Business GoalsSmall businesses often have a hit-or-miss relationship with social, particularly because they find it difficult to measure the ROI of their social media efforts. In my experience, one of the easiest ways to measure and track the ROI of social media is to tie social media objectives to your business goals. Never approach social media in terms of brute profit: “This post will make me X amount of money” almost never works for social media. Instead, setting clear social objectives such as growing your profile to 10,000 followers or getting 100 shares on this post and tying them to your overall business goals will help you effectively measure the ROI of your social media efforts.Cath Brands, Chief Marketing Officer, FlintfoxFocus on Social Media Conversion RateTo measure the ROI of social media, small businesses need to focus on the social media conversion rate (SMCR). This metric represents the percentage of social media followers who take a desired action, such as making a purchase, filling out a form, or subscribing to a newsletter. SMCR helps small businesses determine the effectiveness of their social media strategy in terms of customer acquisition and revenue generation. By tracking SMCR, small businesses can identify which social media platforms, posts, and campaigns are most successful in driving conversions, and make data-driven decisions to optimize their social media strategy and budget allocation.Basana Saha, Founder, KidsCareIdeasPrioritize Authentic EngagementIf you’re a small business just dipping your toes into social media, forget about measuring ROI initially. Trying to quantify success too early can lead to disappointment and a premature halt. Consistency is key. Stay the course, adapt your content, and respond to the audience signals you receive.Once you gain traction, the critical metric is “authentic engagement.” In the age of bought followers and likes, genuine interactions from your target audience—likes, shares, comments, or even direct messages to you—are gold.Keep in mind, this isn’t limited to small businesses. Even large brands evaluate influencers primarily based on engagement rates. You might be surprised to find that many big-name Instagrammers boast massive follower counts but negligible engagement, making their profiles useless for brands.Stay patient, encourage genuine interactions, and you’ll see the real ROI of your social media efforts.Rafael Sarim Özdemir, Founder and CEO, Zendog LabsUtilize Customer Lifetime ValueOne way to measure the ROI of social media for small businesses is through the Customer Lifetime Value (CLV). The CLV calculates the total revenue a customer generates over the course of their relationship with your business. By determining the CLV of customers acquired through social media and comparing it to your investment in social media marketing, you can estimate your social media ROI.I’ve used the CLV metric to inform my social media strategy by focusing my efforts on the platforms that bring in high CLV customers. In addition, I’ve tailored my content to appeal to these high-value customers, ultimately maximizing my social media ROI.Will Gill, Event Entertainer, DJ Will GillFactor Time Spent in ROIWhen measuring the ROI of social media marketing, it’s important to accurately factor in time spent.Many social media campaigns are free or low-cost, so creating a strategy heavily oriented around these apps can seem like a no-brainer.But this can result in extra work for employees that inevitably detracts from their day-to-day tasks. Expecting team members to post updates once or twice a week seems like a small ask, but all those minutes add up. A dedicated PR employee might spend most of their day updating as many as a half-dozen apps.Make sure you’re accurately accounting for the energy this takes away from other types of marketing, and take time spent into account when measuring ROI.Tim Walsh, Founder, VettedEvaluate Efficiency with Cost per AcquisitionOne effective way we measure the ROI of social media for our small businesses is by calculating the cost per acquisition (CPA). CPA determines the average cost to acquire a new customer or lead through social media. We determine the average cost per acquisition by dividing the total amount spent on social media campaigns by the number of conversions. This metric allows us to evaluate the efficiency of your social media efforts and compare them with other marketing channels. Monitoring the CPA over time helps us optimize our social media strategy, allocate our budget effectively, and focus on campaigns with the best ROI.Harry Morton, Founder, Lower StreetCompare Profits with ExpensesWe simply subtracted the amount we have spent from the total amount we have earned. And there we had our answer as total profit. You can figure out the ROI for a certain channel by comparing the amount of money made from a given campaign to the sum of money put into it. This similar method can apply to advertising campaigns executed on sites optimized for driving monetary transactions. According to the objectives of the campaign, certain metrics may be of paramount importance. For instance, metrics like reach and engagement might be prioritized in a company’s goal to raise brand awareness. Conversion rates and return on investment are more important if you want to increase leads or sales.Sherry Xue, Digital Marketer, VAZASILKEstimate Success with Click-Through RateYour Click-Through Rate (CTR), determined by dividing total clicks by impressions, is an additional helpful traffic measure. It indicates how successfully your social call-to-actions (CTAs) lure potential customers away from social media and onto your website. You may automatically monitor the CTR of your ad campaigns over time on a dedicated dashboard using our Facebook Ads integration.Axel Hernborg, Founder and CEO, Tripplo.comAssess Referral TrafficAnalyzing social media referral traffic can offer significant insights into your social media ROI. By examining the amount and quality of traffic originating from your social media channels to your website, you can assess the effectiveness of your social media initiatives. This metric has guided my social media strategy by identifying the platforms driving the most valuable traffic.Aysu Erkan, Social Media Manager, Character CalculatorTrack Influencer Collaboration If you work with social media influencers, I believe it’s critical to track their impact on your business. Keep track of KPIs like follower growth, engagement on influencer posts, and direct conversions as a result of their marketing. To attribute sales or leads directly to influencer efforts, use trackable links or unique discount codes. Analyzing the ROI of influencer collaborations allows you to evaluate how effective they are at reaching your target audience and generating desired actions.Tiffany Hafler, Marketing Coordinator, Blockchain LawyerMeasure Reach and ImpressionsMeasuring the reach and impressions of social media content helps small businesses understand the size of their audience and the visibility of their brand. Reach refers to the number of unique users who see a particular post, while impressions represent the total number of times a post is displayed, including repeat views.I have leveraged reach and impressions data to gain insights into the effectiveness of my social media strategy. By analyzing these metrics, I can identify the platforms and content formats that generate the highest reach and impressions. This information helps me allocate resources to the most impactful channels and optimize content to increase visibility and brand awareness.Tiffany Payne, Head of Content, PharmacyOnlineConcentrate on Customer ExperienceThe alignment of social actions with corporate and departmental goals can be defined by having clear social media objectives. Only by demonstrating how social returns relate to the larger picture can one truly understand the meaning of social ROI. For instance, I concentrate on customer experience and brand loyalty because if I can achieve this, it shows I am succeeding with my brand in terms of ROI. You may learn something about whether you’re attaining targets and reaching your goals from all social media analytics. But to truly understand your social ROI, it’s crucial to track the appropriate data.Alan Senejani, Co-founder | Digital Marketing Director, LVL Music AcademyIncorporate Facebook Pixel and Google AnalyticsOne effective way to measure social media’s return on investment (ROI) for small businesses is by tracking conversions. Conversions refer to users’ desired actions on social media platforms that align with your business goals, such as making a purchase, signing up for a newsletter, or filling out a contact form. By monitoring the number of conversions generated through social media efforts, businesses can evaluate the effectiveness of their social media strategy and assess its impact on their bottom line.To utilize this metric, I have incorporated conversion tracking tools like Facebook Pixel and Google Analytics into the social media campaigns of my clients. These tools provide valuable insights into the channels and actions driving the highest ROI, with conversion data showing leads and purchases generated. This allows us to allocate resources effectively, optimize underperforming campaigns, and focus on channels that deliver the best results.Shane McEvoy, MD, Flycast MediaGauge Brand Awareness and Share of VoicePersonally, I believe that gauging brand awareness is critical to evaluating the influence of social media on your small business. Analyze your brand’s share of voice compared to competitors using tools like Google Trends or social listening sites. Analyzing the growth of your social media following, mentions, and reach can provide insight into the rise in brand visibility and awareness brought about by your social media initiatives.Cindi Keller, Communications Coordinator, The Criminal Defense Firm
 

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