Social media ROI (return on investment) is a sore point with most marketers. They simply can’t put a figure on the returns social media marketing is producing for them.
Don’t believe me?
55% of marketers find it the most challenging to measure social media ROI. 3 in 5 marketers do not even discuss ROI with their bosses. It’s like the elephant in the room that everyone can see but nobody wants to acknowledge.
But how long can you avoid the question of social media ROI? Not for long, I’m afraid. When you invest in a strategy, you are accountable for its results.
And wouldn’t it be great if your social media ROI is excellent?
I get you. That’s exactly why I’ve written this post. I’m going to share tips and tools that I’ve leveraged to skyrocket my social media ROI. In fact, I make it a point to include them in all my social media marketing strategies so that I can deliver demonstrable results.
But first, let’s take a closer look at how to calculate social media ROI.
Why, you ask?
Because you can’t multiply what you can’t compute.
How to Calculate Social Media ROI
Social media ROI is the net gain that a social media campaign or initiative yields.
You can use this formula to calculate social media ROI:
Social media ROI = (Revenue – Investment)/ Investment
The social media ROI of a campaign depends on the key performance indicators (KPIs) or goals that you identify for it.
For instance, if you start a social campaign to build brand awareness, the right KPIs to measure would be follower count and/or brand mentions. If your followers or mentions increase, your campaign will have fulfilled its objective.
But the social media ROI is not simply the tally of these two metrics.
You have to factor in the expenses incurred on the campaign from start to finish (labor costs, ad spend, influencer commissions, tool subscriptions, whatever is applicable). Then, deduct the investment from the revenue and divide the difference by the investment to arrive at the social media ROI.
To simplify things, I like to use tools with social media ROI calculators, like Hootsuite.
For the above example, here is how they computed the social media ROI:
Now that you have a fair idea about how to calculate social media ROI, let’s discuss how to amplify it.
How to Multiply Your Social Media ROI in 5 Easy Ways
Before we dive into the tips, you need to research your target audience and platforms. Not all of the strategies I’ve mentioned below work for all kinds of consumers and platforms.
Understanding consumer expectations and platform dynamics will enable you to pick tactics that can provide assured social media ROI.
For instance, out of all the methods I’ve listed, the best tactic to succeed at Instagram is influencer marketing since influencers are intrinsic to the platform. But the same trick may not work as well on another platform, say LinkedIn.
That said, let’s proceed to the social media ROI-building tips:
Tip #1: Partner with Influencers
With traditional advertising losing steam, influencers are becoming a critical channel for marketing and monetization on social media.
If you collaborate with the right influencers (with the same audience demographics, values, and niche as you) and leverage them smartly, your social media ROI can surge exponentially.
Influencers can drive direct sales since 63% of consumers trust what influencers say about a brand and not what brands say about themselves.
Example: Popular US car brand, Subaru, worked with 20 Instagram influencers to improve their brand’s online presence. For the brand’s #MeetAnOwner campaign, each influencer created posts in their authentic voice to convey the brand’s value to the audience.
In the post below, Zach King posted a video in which he mentions how a Subaru car impresses his date. This video alone has 9 million+ views. You can imagine the combined impact on Subaru’s social media ROI when 20 influencers unleashed their power.
Do you think I’m joking?
Subaru’s Instagram engagement rate increased by 9%, attributable to the millions of likes and comments garnered by the 58 sponsored posts. In addition, their sales increased by 10% immediately following the campaign.
Influencers can mobilize positive sentiment about your brand by leveraging their follower relationships. When they vouch for your brand, it’s like a hallmark of trust for their audience. Your brand gains credibility and consumer trust that shapes most purchase decisions.
Example: When Youfoodz (a fresh-meal delivery chain) wanted to make a space in the competitive health foods market, they partnered with 81 fitness influencers. These content creators developed 167 Shoppable Stories and sponsored posts highlighting the brand’s convenient and healthy menu options.
In the image below, Brittany Daisy, one of their influencers calls Youfoodz “a lifesaver” and endorses their sugar-free sesame bites.
Youfoodz earned about 500K impressions and 70K direct responses (comments and shares) from these influencers. The “in-the-moment” Stories cemented the brand’s authenticity in a big way.
There is one more way by which your social media ROI benefits from influencer marketing. If you partner with experts and thought leaders in your industry, you can establish domain authority and become the preferred brand for consumers.
Example: Pottery Barn wanted to showcase their new decor collection in the best light. They hired interior designer and blogger, Holly Becker, for the job. On her blog decor 8, Holly wrote an insightful post featuring the brand’s pieces in artistic arrangements.
With each piece of architectural advice Holly provided, she explained how exactly the brand’s furniture pieces fit in. Since the influencer was an acclaimed designer with a demonstrated history of great content, there were many takers of her advice.
This single post received 500+ comments and a social reach of 4 million.
The best part?
The blog has verified and engaged readership who have the potential to turn into paying customers — the ultimate win for any brand’s social media ROI.
Tip #2: Have a Formal Affiliate Marketing Program
While influencer marketing can take time to deliver results, affiliate marketing is a more resultful and reliable method of boosting social media ROI.
How does it work?
In simple terms, affiliate marketing or performance-based marketing means paid promotions.
It works like this:
- People (affiliates) sign up for your affiliate program.
- You assign them trackable UTM codes that they embed in their promotional posts.
- When a promotion leads to a sale, the attributable UTM code helps you calculate the affiliate’s commission.
Example: Take inspiration from Moosend’s affiliate program. They pay 30% lifetime commission to their affiliates for each referral that they produce. The recurring income clause is bound to keep affiliates hooked for the long term.
Having a formal affiliate program like the one above helps you measure your affiliates’ efficacy accurately and instantly. Also, instant gratification in the form of monetary compensation encourages affiliates and makes the arrangement mutually beneficial. That’s why 79% of successful marketers use affiliate marketing to drive social media ROI.
Tip #3: Take Advantage of Coupon Marketing
Who doesn’t love a sale?
Literally, nobody. In fact, social media users are active deal seekers.
Don’t believe me?
Check out the stats below:
To increase your social media ROI in record-time, share enticing coupons, and deals with your social followers. Your affiliates and influencers can also spread the word for you.
To boost engagement and reach, instruct participants to reshare the coupon-laden posts and tag interested friends in the captions. That’s a very effective strategy since 28% of people share coupons on social media. You not only earn new leads but also brand exposure to untapped markets.
You can also include a cut-off time to redeem the coupon to induce urgency.
Example: Gap’s wildly-popular 50% discount coupons go viral almost instantly. According to the company stats, 534 coupons are redeemed every second through Twitter and Facebook.
They also have 1,500 affiliates working overtime to promote the deal and propel the social media ROI for the brand.
Ready to Grow Your Social Media Marketing ROI?
Drawing a decent social media ROI can be easy if you know the right marketing tactics. Apart from the above strategies, you can also invest in social ads to multiply ROI. However, it’s not the best way to sustain social media marketing on tight budgets, which is why I didn’t cover it in this post.
If you need a step-by-step strategy to improve social media ROI, you can check out the infographic on the same topic: