How to calculate your social media ROI
Begin by defining what your goals are for a specific social media campaign, such as generating leads or getting mentions for a hashtag and then decide on suitable social media KPIs, which allow you to track and measure your progress in achieving those goals. Social KPIs help you assess the effectiveness of social media efforts and are an essential measure for determining your social media ROI.
To calculate your social media ROI for a particular project or period of time, you subtract your costs, or your total spending on everyday social media efforts or a specific social media campaign, from the revenue or total value (which may not be immediately quantifiable) derived from that effort. You then divide the result by your costs and multiply by 100 to obtain your social ROI as a percentage. The higher the percentage, the better the ROI, or the more efficient your campaign.
In order to assign monetary values to social KPIs that don’t immediately provide you with a dollar amount, you may want to refer to historical data and take into consideration the lifetime value of the customer. For example, you may need to think long-term when estimating how much value an additional follower, response to a questionnaire, or download adds to your business.