3 important ways to measure the impact of social media on your business
Pay attention to these areas to evaluate the profitability of social media and the impact on your business.
May 26, 2021
5 min reading
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Social media offers a myriad of benefits for large and small businesses and if you want to grow your business and brand today you need to harness the power. Great content can help build brand awareness, define your personality and push you to the forefront of your industry. There are also great business opportunities. It is estimated that 420 billion people actively use social media and 54 percent of those users are browsing to buy. There is no doubt that social media should play an important role in the marketing strategy of any business.
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One company I started, Tapestry Girls, relied heavily on Pinterest posts and Facebook announcements to connect with early potential customers. But how could I know if social media was working? How can any business owner measure the success of their own social media practices? Where’s the money? – in retweets, in comments or somewhere else?
That’s why it’s important to measure the profitability of social media to determine if likes and dislikes are boosting your business, not just your followers.
Critical KPI for social media
There are endless KPIs on social media and it’s easy to travel down the rabbit hole. Instead of trying to put it all together, focus on a few key points. You can split these clues between engaging in your content and engaging off-site.
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Content of participation
By participating in the content, you should pay close attention to the following:
- Followers. Of course, the more followers you have, the more potential customers you will be able to reach. But apart from the number, you should also keep an eye on how fast your followers list is growing. If it rises fast, it means your content is effective. On the other hand, if there is stagnation, you may need to adjust your formula.
- Likes, shares and comments. Likes are the basics of social media; if many users like the post, it means the content is resounding. The more you like, the longer your social media algorithm will support your post at the top of the feed. Shares or retweets are important because that way you will expose your brand to people outside of your local network. Finally, comments indicate that you have submitted something compelling enough to encourage conversation, and those conversations can provide valuable data (such as customer feedback about your brand, feedback on new products, etc.). As a bonus, responding to these comments gives you the opportunity to communicate directly with your customers.
- Impressions. Impressions tell you how many people could possibly see your post in their stream. The larger the number, the more opportunities you have to reach new customers.
You may be wondering, “What is a good number for these measurements?” There is no hard and fast rule for this. In general, growth is the goal. As long as you create a baseline and move beyond that, you can count on it to be successful. A much better way to assess whether or not your index is good is by measuring the effectiveness of your followers over social media.
The goal of your social media content is to get your followers to buy, either through in-store store links of your choice or by going to your website or landing page. To find out if this is happening, follow these three measurements:
- Total sales. Use analytics tools like Google Analytics to understand who is visiting your site, where they are coming from and what they are doing when they arrive. This tool can help you figure out what sales are coming from social media users to other types of customers.
- Jump rate. The bounce rate indicates the percentage of users who viewed only one page on your page before leaving. If the number is high, it means that something is not working, whether it is the usability of the site, the offer or the product itself or some other technical issue. A great result here would be a bounce rate below 40 percent.
- Conversion rate. Business tells you how many of your visitors bought something. A high conversion rate means that your website is doing exactly what it is supposed to do. When your followers click through and land on your page, everything falls into place. The average landing page changes to about 5 percent, so you should aim for at least; 10 percent or higher would put you in the Premier League.
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If tracking all of these different metrics sounds like a lot, then there’s a much simpler way to think about social media ROI, similar to how you would measure it for an advertising campaign. Add together all the resources you have invested in your social media content – tools, membership, working hours, advertising, etc. Then calculate the total sales that have come from social media visitors. Divide “sales” by “investment” and multiply by 100. This equation gives you social media ROI as a percentage.
Anything over 100 percent would be positive, but as you track your performance over time, you will gain an understanding of your basics, trends, and standards for good, bad, and average performance.
However you decide to measure your success, the main lesson is not to get swept up on social media unless you truly understand what the data is telling you. Take time to determine your social media ROI so you can make sure your content works for you, not against you.