Measuring the return on investment of social media activity is no longer optional says Tiina Kontra, social media and communications consultant, but the good news is that there’s an easy way to do it
You might be working hard on your restaurant’s social media, but are you able to establish the return on investment for your efforts? The good news is there is a simple way to do this.
Socialmediaexaminer.com defines social media ROI as “a measure of the efficiency of a social media marketing campaign”. A straightforward formula for establishing this is: social media ROI = (return – investment)/ investment.
However, before doing any calculations, we need to first understand the audience we are trying to reach. It seems like a simple question, but it really is the key to everything. Once the audience has been clearly defined, we can find out where they live on social media.
“If you are doing all the hard work yourself, write down the hours that you put into content development and social media management and how much this costs you. And there you go, you have your numbers to calculate return on investment”
Ask yourself who your ideal customer is. How old is he/ she? Are they on Facebook, Instagram, Snapchat, Twitter, YouTube, Google+ or another channel? Using the wrong social media platform is an absolute waste of money, and if you are on multiple channels, it is worth knowing which ones work best for you so that you can give those the most attention.
Secondly, we need to set specific and measurable goals to achieve, and understand how these relate to our business goals. For example, these might be new followers, clicks on advertisements, coupons or website, check-ins, sign-ups for newsletters, time spent on the website or use of promo codes.
Next, choose some of these and start tracking. Check out the built-in trackers on the social media channels you are using, or use Google Analytics. Offline, ask your staff to conduct short surveys with questions such as “Where did you hear from us?” or track used coupons mentioning a special code only available on social media.
To figure out return, we need to give a monetary value to the set goals. There are various different methods to calculate return, for example lifetime value of a customer, lifetime value multiplied by conversion rate, or average sale. If you lack historical data, make a ‘guestimate’ using common sense and experience.
The next step is to calculate the investment that you put into your social media. Are you using advertisements or paid social media tools? Or are you working with a social media consultant or a graphic designer? If you are doing all the hard work yourself, write down the hours that you put into content development and social media management and how much this costs you. And there you go, you have your numbers to calculate return on investment.
To go the extra mile, consider coming up with a visual way to report your results. First choose a timeframe that makes sense to you – is it for your weekly, monthly or quarterly reports, or all of these? Once you have done this, review the results and reset your goals.
You could even go a step further and benchmark yourself against a competitor’s social media activity. Perhaps you may even uncover an opportunity for your restaurant to be heard through the noise.
About the author: Tiina Kontra is a Dubai based social media and communications consultant with more than five years’ experience working in the United Arab Emirates. She provides advice and assistance to lifestyle brands for building stronger brand awareness, online presence and connections with target audiences.