I am often asked can you really quantify the Social Media ROI? My answer is always “yes, of course you can.” We will look at three different ways to quantify the Social Media ROI.
A quick comment about quantifying the social media ROI
The ROI, as we by now know, is a business formula that calculates the ratio between an investment and the return. To quantify the social media ROI, we need to determine both the return and the investment in dollars and cents, and we need to ensure that the return has a direct correlation to the investment, ie the return was generated based on the investment.
Please look here for an in-depth discussion three types of returns.
So lets look at ways to quantify the Social Media ROI
- During or after you have run your social media campaign, you look at when and where the investment was made, you look at when and where the return were made. If you can determine and quantify the correlation between the return and the investment, you can quantify the Social Media ROI.
- By physically link each of your sales back to a social media campaign, you can quantify the Social Media ROI.
- Before, during and after a social media campaign, you determine the total return from different return channels. Using the total return and the investment, you can quantify the Social Media ROI. Examples of return channels are cost savings from not having to purchase impressions, or savings on focus groups because your social media campaign generates consumer insights, or savings in support calls.
In our application, we use the third way to quantify the Social Media Return. Please see here for a discussion and here for a video.
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