Can you calculate Return on Investment (ROI)? Or is it as elusive as a sunny day in Chicago spring? Business leaders are constantly looking for data to drive their decisions; a gut check just doesn’t cut it anymore. With so much data at our fingertips, it would be ignorant to go on happily ignoring the data, and more importantly, what it can tell us about our business.
One of the most beautiful things about social media is that there are TONS of metrics; so many that sometimes it can feel like you’re drowning beneath the sheer number of numbers. Data on its own is worthless. What you need to know is what that data is telling you, and specifically, how much money it’s making you.
But all the data in the world can’t tell you what you need to know unless you tie it to your business goals. Social media has often been dubbed as the “ROI black hole.” In fact, according to eMarketer, measuring ROI was still the number one concern for social media marketers. But I’m here to tell you that when it comes to social media, calculating your ROI is possible … and it’s not even that hard.
Start at the beginning: your strategy. What are your goals? Are you trying to drive more traffic into your dealership? Do you want more people to look at your VDPs? Is a potential customer filling out a lead form a priority? Are you trying to build brand awareness? Look at your business goals and tie your social media strategy to those goals.
Once you’ve established what your social media goals are, evaluate how you could calculate success. Here are a few ideas to get the gears turning:
Evaluating brand awareness? → Measure impressions and new followers
Looking for leads? → Track the number of lead forms generated
Driving to VDPs? → Monitor the page views and time spend on a VDP
Driving traffic to your dealership? → Track of how many people come through the door!
And we bet you already know how to track how many cars you’ve sold and the profit you make off of a sale!
Once you’ve established your goals and determined which analytics are strong representations of those goals, define what those goals are worth to you. Start backward from the sale and tie numbers to different parts of the consumer journey. How much is a lead worth? You can evaluate the likelihood for a customer to buy a vehicle after they’ve viewed a VDP; multiply that percentage by your profit and you can calculate how valuable a VDP view is to you.
Now that you’ve identified how valuable certain actions are, you can compare how much you invested in your social media to the value your social media generated (if you want to get granular, you can assess the cost per action or impression and tie that to your end goal). Voila! You’ve calculated your social media ROI!
Social media is an ever-changing game, and as the technology develops, it’s getting easier and easier to prove the value of social media for your business.