Measuring social media ROI can sometimes be difficult. Metrics like followers, fans, and site traffic are easy to measure. What’s not so obvious is how your efforts on social media are affecting your bottom line (sales, revenue). While there are ways to directly measure certain campaigns (clicks on a specific link, visits to a landing page, etc.), how does social media activity affect sales? One way to take a look at the effects are by plotting social media activity (number of posts) and how it’s affecting the traffic to your website (or to a specific landing page) and the number of sales (another metric to look at would be number of mentions).
One of my clients has an eCommerce site, but also has a retail location. He felt like his efforts to post on social media (blog, Facebook, Twitter, etc.) weren’t really worth it. He wasn’t seeing an increasing trend in online sales, so to him, social media wasn’t working. However, his use of social media has not been constant (and he’s still learning about engagement versus information vs. promotion). Intuitively, it may seem like lack of consistency and posting on social media may be affecting sales, but it makes more impact to prove it visually.
I plotted the number of posts on social media versus the visits that the ecommerce website was getting from social media and the affect on the number of sales (numbers have been removed, but the scale is 1 to 1):
When you see the numbers plotted visually, there certainly looks to be a pattern. When there is an increase in social media activity (measured just in number of posts by the client), there tends to also be an increase in traffic to the site from social media. There are also lifts in the number of sales (although they sometimes lag by a month). There may be other marketing efforts affecting sales (including efforts for the retail location), but doing a visual analysis can be helpful in spotting overall trends. (Doing a direct correlation analysis may also be helpful.)
Having dedicated landing pages for specific social media promotions would help to figure out the impact of specific social media tactics. However, there still will be some traffic and sales from people who have interacted with you via social media, but didn’t make an immediate purchase (they come back later).
Marketing isn’t always an exact science, but measurement and trending information can help give insights into the effects of various tactics. Having information about how tactics are performing makes it easier to make good business decisions on how to move forward.
How do you measure how social media activity affects sales?
(photo by borman818, on Flickr)