If the thought of calculating the return on investment (ROI) that your social media strategy is generating for your business feels overwhelming, don’t panic. We believe that it genuinely doesn’t need to feel like an impossible task, so we’re here to, hopefully, demystify the concept somewhat.
The ROI your business is driving from social media is best gauged in monetary amounts. As there are no pound signs attached to likes, comments or shares, we need a reliable formula that we can use as part of our calculations.
The ROI Formula
This might feel as though you’ve been transported right back into your old maths classroom as a school but bear with us here. Essentially ROI equals (your return minus your investment) divided by your investment.
If that still sounds confusing, you’re far from alone. Plus, as there are several other factors to consider as well, here’s a bit more information for you.
The Process of Calculating Your ROI
Unfortunately, it’s not enough to simply plug a formula into a spreadsheet. You also need to:
– Understand Your Objectives
Firstly, you need to know what you want to achieve with your social media strategy. You might want to increase your following, drive sales, encourage newsletter signups or increase the amount of time your site visitors are spending engaging with content on a particular page.
This information will inform how your ROI can be measured, so it’s important to understand your objectives in detail and as an experienced social media agency in Essex, we can help you out here if you need it.
– Monitor your Progress
Next, it’s time to select a way to accurately track the progress you’re making towards achieving your goal. You may, for example, want to track on-site actions like newsletter signups and resource downloads using Google Analytics.
– Allocate a £ Value to your Goal
This is where we start to dive into the nitty-gritty. There are several ways in which you can opt to give monetary worth to your goals. You could, for example, choose to focus on:
- The average amount you earn from a customer
- The value of the average sale you secure
- The investment you would need to make into your PPC ad strategy to achieve the same outcomes those generated by your social strategy
– Determine your Investment
Time is money, so it’s vital to accurately calculate the amount of time you have put into your social strategy. Here you will need to multiply the hourly cost of your labour with the number of hours invested. Additionally, you must also consider the costs associated with any of the social media tools you use and any monetary investment made into the promotion of your social content.
Obtaining Support from a Social Media Agency in Essex
If this still sounds confusing, don’t panic because it is complicated. If you would like some additional support, as a professional social media agency in Essex, we have the knowledge, skills and tools to help you to determine whether your current social strategy is working for your business.
So, don’t be afraid to reach out and ask for help when you need it!