Talking about social media ROI is a bit like discussing the meaning of life. You spend time debating points and theories, and while you walk away from the conversation feeling like you’ve learned something, you have no idea what to do with the knowledge.
Regardless of whether or not you are currently calculating the ROI of your social media efforts, most social media experts agree that your plan should align with the overall goals of your company. Across the industry, people are calculating ROI in many different ways. Some do it by examining the general sentiment expressed about their brand; others do it by looking at how many Twitter and Facebook coupons are being used by customers. Neither of these completely reflect the total social ROI. That is why we worked to develop a philosophy and formula that is so simple – yet so complete – that it can fit any business goals or desires.
In How To Calculate the ROI of Social Media, I mentioned that we have created a Social Media ROI formula that could be customized to match a company’s size and industry for a more accurate result. It starts with following the track of traditional ROI which is calculated using a standard formula that has been accepted and used across the business world for years. The Return on Investment is calculated by subtracting the cost of the investment from the gain of the investment, dividing it by the cost of investment and multiplying that by 100 for a percentage. The Social Return on Investment is calculated by subtracting the social spend from the value of the social media, dividing it by the social spend and multiplying that by 100 for a percentage.
But the BIG NEWS is in how you calculate the value of your social media efforts. Interested? Watch and learn.
When she’s not working as a marketing manager for Make Me Social, Mandi Frishman enjoys teasing audiences with bits and pieces of formulas. During her time studying at The University of Florida, Mandi became convinced in the power of learning through play. She has since committed herself to playing (and learning) all day, every day.