Why calculating ROI is an important step in using social media

Why calculating ROI is an important step in using social media

Guest Post by Melissa Harrison

Be honest: How many of you thought you’d jump on the social media bandwagon because it was free and easy?

How’s that working for you?

Social media is appealing to businesses of all sizes because yes, the tools are free. However, just because the tools are free doesn’t mean social media free in the sense of time, management and strategy. Social media channels are only as good as a) the time you put into them and b) the level of engagement from your audience.

Forget about the ‘likes’

During almost every meeting I have with a new client that revolves around social media, I hear something like: “We need to increase our Facebook ‘likes’ by 250 in the next two months.”

And you know what I say to that? “Why?”

Seriously. Why is it beneficial to increase your Facebook ‘likes’? What will you do with those new fans once you have them?

It’s easy to think in terms of ‘likes’ because it’s a number we can all see. But quality always trumps quantity. Never mind the 1,000 ‘likes’ you could get on your page (there are ways to buy those). If those 1,000 people aren’t interested in what you have to say, engaged or invested in your brand (as to some day make a purchase or be an advocate for your services) than it doesn’t matter.


Social media is not a popularity contest. It’s a group of tools to help you interact and engage with your audience in their space.

In their space. Remember that.

As a business, the last thing you want to do is gather up a bunch of likes and then push out marketing jargon to clutter up newsfeeds. That’s a great way to lose connections. Fast.

Why ROI?

If you think about your business model before social media “made it big” you probably had everything mapped out into a strategy, plan or list of KPIs (key performance indicators) that looped directly back to your business objectives and goals. The same holds true when it comes to social media.

Yes, you want to be engaging. You want consistent content. You want to create a space where your audience is comfortable and enjoys hanging out with you. But you also need a purpose for why you are there.

Think about why you started using social media in the first place. Now think about your business objectives. How can the two compliment each other? Examples of business goals that can be supported by using social media include:

  • increase brand awareness
  • drive website traffic (and what will you do with them once they get there?)
  • increase product sales
  • establish your brand as the “expert” in your product/service area
  • give back to the community
  • be a leader in customer service

For instance, let’s say you are a company offering a new line of services that can be purchased through your website. Your business goal may look something like this:

Solidify $100,000 in net profits through website purchases of product ‘x’ and increase visibility as a leader in industry ‘xyz’.

Great. A good, measureable goal. Now, how will you incorporate your social media channels to reach a broader audience, establish yourself as an expert in that industry and, ultimately, drive sales to your website?

An easy way to start tracking your social media ROI

Once you see how using social media ties into your business objectives, it’s time to start tracking. You don’t have to have a huge marketing budget to track social media ROI. Sure, third-party analytic applications can be useful (SproutSocial is one my firm likes) but sometimes you just need a good-old-fashioned DIY spreadsheet.

Before setting one up, make sure you know what your business goals are and how you can help achieve them by using social media. Next, make a list of key words or phrases that you’d like others to think about when it comes to your brand. In a perfect world, what would people search for on Google to land them on your website or social media channels? And finally, think about the social media channels you currently use (or would like to use in the future) and what information will be helpful in determining your success. Below are two examples of items worth tracking as it relates to Facebook and Twitter:


  • total likes
  • # of people talking about
  • new fans
  • page impressions
  • page impressions by user
  • average reach
  • total reach
  • average engagement
  • total engagement
  • top day of week for posting (based on engagement, impressions, etc)
  • top post/comment (based on engagement, reach, impressions, etc.)


  • total followers
  • total following
  • total tweets
  • connections
  • mentions
  • messages sent/received
  • total clicks
  • influence
  • engagement
  • conversation vs. updates

And it can go even deeper than that. Your social media channels are an extension of your main source of online communication—your website. It’s also important to understand social from a “home base” point of view. That is, understanding how people are getting to your website using social media (think of the key words list I mentioned above). Google Analytics can be a wealth of (free) information when it comes to tying back social media statistics and website ROI.

Social media can be a great tool for your business—and fun, at that! Just remember to think about why you’re using the tools you are and set up processes to track the success of your efforts. As in all things in life: You only get out of it what you put into it. Be diligent and watch your business grow!

About the author: Melissa Harrison

Melissa is the CEO of Allee , a content marketing and branding services agency in the Twin Cities. Named a 2012 “ Mover & Shaker ” by the Star Tribune, Melissa has more than a decade of experience in content management and strategy, working with SMBs to build strategic social media and online content strategies. Melissa believes that in order for businesses to survive, they must adapt to what customers want, which includes using social media and creative online content to provide relevant, consistent and creative information.