How to Measure Social Media ROI for Marketers and Business Owners


How to Measure Social Media ROI for Marketers and Business Owners

Did you know that in 2016, a significant 86% of marketers still wanted to know how to measure their ROI for social media activities? Someone visiting your Facebook, Twitter or Instagram account might not purchase from you straight away, but may do so a month down the line. This can sometimes make it hard to determine whether or not your leads come from social media or elsewhere.

The topic in many cases is also misunderstood because many marketers believe they need to merge all of the measurements together including:

  • Reach
  • Engagement
  • Followers
  • Traffic
  • Lead generation
  • Sales

This isn’t necessary. To measure ROI you should narrow down which social media measurements you should pay attention to and before you do this, you must set out clear goals and objectives for your brand.

Define your goals

Before you are able to measure your social media return on investment, you need to be clear on your goals. What are your overall goals with social media? What are you trying to achieve?

  1. Is it to gain email subscribers?
  2. Is it to increase traffic?
  3. Is it increase engagement?
  4. Or is it to gain more sales?

Map out your SMART goals first!

* SMART (specific, measurable, attainable, realistic, timely).

AN EXAMPLE OF A SMART GOAL: Increase overall website traffic by 25%, from 10,000 to 12,500 in 3 months.

How to track and measure your goals

Ask yourself these questions… How much time, money and effort are you investing in social media? How much value do you get in return?

Here’s an example from HubSpot’s Social Media Training video guide to show you how to measure ROI



As shown in the example above, 6 hours spent on social media, generated 1500 new website visitors. 1500 visits led to 225 new leads (email subscribers).

You then need to find the conversion rate from leads to customers.

Out of 100 new email subscribers how many are buying from you?

In the example above it was 4%

So 225 * .04 = 9 customers

Do you know your lifetime value of your customer? In other words how much money do you earn on average from your customer? In the example above it’s $1,000. So if 9 customers out of 225 leads buy, you’ve made $9000 from 6 hours spent on social media. Not bad is it?

If you don’t know your CLV (customer lifetime value), you can also measure the average of how much your customer spends per transaction…

An example of average $ spent per transaction:

If your customer purchases a product that is worth $50, and 9 customers buy… you’ve made $450 ($50 X 9 = $450 ).

Useful links and calculations:

  1. Use trackable links like Google URL Builder so information is included in your google reporting.
  2. Not sure how to measure your customer lifetime value (CLV)? Read here…
  3. Not sure how to measure conversion rate from leads to customers?
Not sure how to calculate average spent per transaction? Use this formula:

Annual monthly visits / annual website revenue  X 100  

= Average $ per visitor

Importance of measuring followers, engagement and reach

It’s important to track these metrics too because it helps with brand awareness and builds social proof for your business. You will gain customer trust and confidence leading to improved conversion rates.

All of the above mentioned metrics will show you what’s working and what isn’t working. To make the most use of your analytics and measurements don’t forget to improve and optimise your work. Set the right goals for your organisation, then track and measure them. Measuring social media ROI, will give you not only valuable insight for the success of past campaigns, but  will help you with the planning and budgeting of future campaigns.

Still not clear on how to measure ROI for your brand? Contact for a free 30 minute consultation.

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