How to Measure the Return on Investment of Social Networking for You and Your Clients

Editor note: I came across the great article on measuring Social Media ROI (AWAI) and I thought I published it down here.

By Kathleen Cleary

Congratulations! You’ve jumped on the Social Media bandwagon and set up your Twitter, Facebook, and LinkedIn accounts. Perhaps you’ve even created a Facebook fan page and scouted out some niche-oriented sites to post comments to, answer questions, and start discussions on.

But wait … do you find yourself wondering if your Social Media efforts and time are really paying off? How do you measure the Return on Investment of relationship-building and engagement? How can you be sure you’re not sucking the time out of your most productive hours each day with little return?

If you are participating in Social Networks in a willy-nilly fashion — a tweet here, a blog post there — without much thought to what your true purpose is, you are just a ship without a rudder in the vast sea of Social Media. And, you won’t be gaining the kind of attention which will drive business to you, or to a client you may be advising on how to effectively use Social Networks.

Establish Your Clear Defining Purpose So You Can Unmistakably Measure the Return on Your Social Media Time

To see results from your Social Media activities, it’s vital that you have a “clear defining purpose” for being there in the first place. Let’s take a look at some of the common motivating factors to getting involved with Social Media …

• Build brand visibility
• Lead generation and list building
• Education and awareness
• Increased credibility and authority (Thought Leadership)
• Increased blog/website traffic and leads
• Promote products and services
• SEO and link building
• Gather insights into your community of interest (surveys, polls, market research)

As a copywriter, your defining purpose might be to: “engage and add value to (your chosen niche) community in order to increase leads and work opportunities.”

If you are consulting with a client on how to participate in Social Media, you must help them define their primary purpose before creating an effective action plan.

Let’s say your client is a fitness center. Their defining purpose might be to: “provide education on the life-changing benefits of proper health and fitness activities for members and prospects as well as to increase leads for new memberships.”

If your client is a natural beauty product retailer, their defining purpose might be to: “increase awareness of the lasting health benefits of using natural beauty products in order to increase the customer base for ‘X’ Brand.”

Once you are clear on your defining purpose, it’s time to set up specific and measurable goals, develop and execute a strategy, and then evaluate your Return on Investment. Social Media actually provides two types of ROI. There is the traditional Return on Investment, which looks at concrete dollars, customers, subscriptions, etc. And, there is also the Return on Influence. Both should be measured.

Return on Influence has more to do with brand authority/credibility and one’s levels of influence, engagement, and popularity in Social Media channels. Positive outcomes here will eventually have a real impact on the measurable dollar amounts which show up in the Return on Investment numbers.

So, back to setting your goals. Be sure they are not too vague or hard to measure. A weak goal for your fitness center client would be: “Our goal is to raise our brand awareness and increase our total number of memberships.”

An example of a stronger goal could be: “Our goal is to increase website traffic resulting in 75 new leads and 25 new memberships in the next six months.”

Perhaps your client is focused on connecting with influencers in their industry. A weak goal would be: “Our goal is to increase our brand visibility and unsolicited mentions of our company each month.”

A much stronger goal is: “To achieve 15-20 unsolicited mentions of our company in industry blogs, publications, and forums each month.”

As a copywriter, a vague goal would be: “To increase my Facebook fan base and Twitter followers.” A more specific and measurable copywriting goal could be: “To acquire 50 new leads from Social Media and contract with five new clients in the next six months.”

In looking at the two types of ROI provided by Social Media activities, here are some suggested ideas of what you can measure:

Return on Investment examples:

• 500 new subscribers
• 50 new product sells
• Six new clients
• Five new joint venture partnerships
• $10,000 increase in donations for a non-profit

Return on Influence examples:

• 1,000 new Twitter followers
• 2,500 participants in your Facebook Group
• 1,500 fans to your Facebook fan page
• 25 mentions per month in blogs, Twitter, niche social sites
• 400 new RSS subscribers to your blog

Useful Tools to Help You Track Your Social Media ROI

Be sure to take advantage of these very useful tools available to help you track your ROI:

1. Google Analytics – http://www.google.com/analytics (This is a very good tool to track website visitor traffic and conversion from Social Media sources)
2. Feedburner – http://www.feedburner.com (Tracks the number of people subscribing to your RSS blog feed)
3. Frogloop – http://www.frogloop.com/social-network-calculator (This cool Social Media calculator is designed for non-profit campaigns, but can be adapted for other business campaigns as well)
4. BlogPulse – http://www.blogpulse.com (Shows the growth in bloggers talking about your business/your client’s company and tracks the growth in blog posts regarding a particular domain name)
5. Trendpedia – http://www.trendpedia.com (This is a comparative tool to track the number of blog posts that mentioned a particular keyword)
6. Social Network Influence Statistics:
   • Increased numbers in Facebook fans on your/your client’s fan/business page
   • Increase in Twitter conversations pertaining to your business/your client’s company
   • Increase in Twitter follows, Facebook friend requests, and FriendFeed subscriptions

If you want to be sure you are participating in the Social Networks effectively, discover the strategies fellow AWAIer Jim Turner uses to find all the clients he needs solely through his Social Network activities. Jim’s program, Social Networking: The 21st Century Way to Find New Clients details how you can use Facebook, Twitter, and LinkedIn to create a steady stream of hungry prospects and new clients for your freelance copywriting business.

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Great tips. Never thought about the return on influence part.

I use facebook mainly
it really helps me in traffic
Thanks for your great topic :)

Anetta

Glitches and Cheats´s last blog ..Call Of Duty 6 Modern Warfare 2 Glitches, Cheats: Out Of Mission Hornets Nest (Singleplayer)

Hello.

Thank you so much for this article. It’s so helpful…
Great tools as well. I like the “return on influence”, Very interesting point of view. Thanks for sharing this with us.

Thanks for the article. Writing content is and always will be the #1 way to generate visitors online. Quality content gets found and writing with the idea to be found is a smart way to increase your influence.

Wow. Thanks. Never thought about social advertising this way. Very interesting article.

Social medias are nowadays so much of web marketing tools that I can’t see them as social networking systems anymore. To be honest I’m not sure is this the way it should be, but because we have no choice we need to use them the best way possible to increase traffic on our sites.

Quite knowledgeable article, thanks! I also think that Social networking is an excellent marketing tool which can be used as additional means to many marketing strategies.

Wow There so much to absorb with all of the Social networking, Going to start digging in and learn the ways

Great review. thanks for sharing this very forwarded idea.i use twitter only for this.
search engine marketing tips´s last blog ..Web directory submissions- get high pace outputs

It is a very nice article about social networking. I like the post. thank you very much for writing. Once upon a time I have never think about it. but At present I am very curious about social networking.
bestpricemoving´s last blog ..Hello world!

Wow, Great article!
I do believe Social media now turns more to a marketing arsenal.
But to be able to manage this and get some return of investment is still a hard job…
Sahra´s last blog ..Business Bookkeeping

Social media marketing is very effective these days, and it will grow in the future at a very rapid rate. With the growing number of social sites like twitter these days, SMM is an important marketing tool

Social medias are nowadays so much of web marketing tools that I can’t see them as social networking systems anymore. To be honest I’m not sure is this the way it should be, but because we have no choice we need to use them the best way possible to increase traffic on our sites.

Arif

The tips and tricks regarding social media marketing no doubt describing in better way. This type of post always valuable for guys who are related to such type of work.

Abel

I like your suggestions of goals for measuring the effect of social media marketing. In this exact field it is relatively easy to get quantifiable data. I have found that some will argue it costs more to employ the necessary size team to take on all these social media marketing tasks than to simply throw ads out there and hope they stick- it is all the same gamble. Thanks for sharing a truly brilliant post much-needed for any client-facing social media marketing consultant challenged on costs and ROI.

This is a very important thing you have discussed here.I do use Social Media sites for my business purposes and i have benefited a lot from it.Nevertheless these are some very useful tips you have provided here that are worth taking note of.Damn good post!

That’s a good effort you have put on the network through your blog. I appriciate your work.

Superb information.Thanks a lot.

I have found that some will argue it costs more to employ the necessary size team to take on all these social media marketing tasks than to simply throw ads out there and hope they stick- it is all the same gamble.thanks..
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hmm..
interesting post..
i just wandering how to make the best social networking site to drive great traffic to my site..
once again thanks you :)
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Very informative post. Social marketing is extremely important today and if done right can have a huge impact on your brand and traffic to your sites. Going to add this to Favorites for easy access.

Thanks for the great post. I’ve been hesitant to use social networking tools but I like what you’ve written about them. Will probably try out twitter first.

Yes, social networking sites are so important that it is almost unbelievable. I also use their help to give my sites more traffic. It is just another web marketing tool – and very effective one.

Alicia

Social media measurement is one of those topics about which everyone has an opinion, but nobody agrees on the solution. The question about how to measure the return on investment (ROI) for social media participation comes up in every workshop I deliver, as definitive, statistic-based metrics seem to be the primary way communicators feel they can secure approval and budget for these programs from their management teams.

Social Media is very important to look at whem it comes to online marketing and seo. Another great ressource, thanks and greetings

Facebook Fan pages have a built in analytic tool that assists in determining the effectiveness of your marketing…

My tip is generate a fan page not a group if you are looking to use FB… Fan pages allow you to comuninicate better with subscribers… I learned this the hard way unfortunately…

Ben King

We love the idea of anything that enhances the basic quality of a business plan.

However, there are two simple things that a person needs to do in order to get there, and they are things that most people do not want to do.

1) Have a great idea

2) Sell it

Usually, what one reads is that one is going to do exactly what everyone else does, hide behind a computer somewhere, and expect to make money….lots of it.

In order to make money, someone has to buy. In order for that person to buy, someone has to sell. It’s that simple.

For example, Linda Christas College has a wonderful Advisory program in which a person represents them to their community. For every student enrolled, the Advisor makes $500. (The franchise fee is zero, and the training cost to the Advisor is zero.)

Now let’s take two people, one who has graduated from college and one who has graduated from high school.

The high school graduate was willing to sell, to get out there and develop the skills necessary to sell. That person, we know from personal experience, is making well over $100,000 per year. Why? Because she has learned to sell a great idea, Linda Christas College’s Green bachelors degree programs.

The college graduate on the other hand says she “hates” the idea of selling, not realizing that everything in a free market depends on sales and marketing….everything.

One can try to get a job hiding at a desk or hiding behind a computer, but ultimately, it is the person who knows how to sell face to face who is going to get the venture capital, get the development money whatever it takes to actually become wealthy.

We are amazed that so many folks go through school and never understand that ultimately he or she is going to have to sell the skills he or she has or be poor.

Even when one’s job doesn’t (we think) have anything to do with sales, if we stop selling ourselves to our boss, we end up losing the job (being fired).

So, bottom line: If we want to be wealthy, we need to learn to sell a good idea.

Linda Christas College again has positions available in every state. However, they are hard to fill. Why, because a person has to sell a service. One doesn’t need a degree from Harvard to make over $100,000 per year. One merely has to contact Linda Christas College, go through their FREE training program for the Advisor category, and go out and represent them to their community. It’s that simple. But, all the while folks are going to say, UGH, selling.

They don’t realize that EVERYTHING in our society depends ultimately on our selling something, even if its our day to day skills to our bosses at places we don’t THINK we are selling anything. Think again!

The further we are away from the sales desk, the less we will normally make.

CEO’s generally come from the sales and marketing departments of companies UNLESS Daddy owns the place.

I appreciate your work.i use twitter only.It is just another web marketing tool – and very effective one.

I agree with that solid points you have raised in this post and i would say that clear target and goal can make result more than expected.

in my opinion, twitter ist one of the most effective marketing tools of our days – you’ve gotta know how it works..

A Single one?
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Social Networks are no more growing…