Best practices for measuring social media ROI
The first step in measuring your social media ROI will be to define what your goals are for your social media campaign. Is your priority to increase brand awareness? Or improve brand reputation? To attract more traffic to your website? Or boost online sales?
The next step is to establish social media KPIs that you can use to focus on social media monitoring efforts and measure your progress in meeting your goals. Your KPIs help you collect and analyze the social media data necessary for measuring social media ROI. You can then use web analytics tools, social networking services’ built-in analytics tools, or more sophisticated social listening toolsets to track the relevant KPIs.
You will also need to track your spending on social media, focusing on a specific period of time and/or campaign, and calculate or estimate how much-added value is being produced for your business as a result of those expenditures. Some KPIs will provide you with a dollar amount while others are more abstract. For the latter, you will have to assign approximate monetary values based on historical data and the lifetime value of the customer to calculate social media ROI.