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How do you calculate social media ROI effectively?

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Before I begin explaining the nitty-gritty of the process, let me tell you that it’s going to be a little complex to get the numbers right!

There are a few things you need to be clear on when you try to figure out your Social Media ROI.

Your Goal: 

When it comes to ROI, we often relate it with money, cash, and conversions. But in the social media field, the ROI is not necessarily going to be a monetary number. There are lots of verticles that can represent the success & profitability of your investment in social media. You have to be confident about is the goal of the social media campaign. 

Few social media verticles: Brand Awareness, Reach, Traffic, leads. Always remember there’s more to social media than just promoting your brand, product, and services. 

Set Actionable & Trackable Goal: 

FACT: It’s impossible to know social media ROI with tracking & analyze the right data.

To get most out of your social media investment you need to be quite certain about the factors you need to measure; because the success of your social media campaign depends on it. 

Your Spendings: Determine your social media spending – consider everything here.

Customer Lifetime Value(CLV): 

It’s a highly important factor in social media ROI measurement yet most of the brand tends to ignore it. It can be a game-changer if we know (approx) how much our customers can spend with the brand in their whole lifecycle. 

If we can step up creative & targeted sales funnel for these customers then the profit increases drastically. By engaging with these customers and inspiring them to share the brand with their community will boost two things drastically – our brand reputation and customer lifetime value. 

Let me give you an example! If a customer worth buys your product worth INR.5000 and you keep in touch with him/her, inspiring him/her to share a story about his experience with your brand on social media, and 20 people bought the product because of that recommendation, your CLV just shot up to INR.100000.

That’s the power of social media.

New Customer Acquisition/Lead:  

Figure out the approx cost of new lead or customers. Use tracking tools like google analytics, insights to collect the needed data to get the approx value for every new lead or customer you get through your social media campaign. It’s going to time consuming and headache full task, but you’ve to get done with it.

Reach/Impression/Interaction: 

There’s a gem hidden in these metrics. Figure out the read, impression, and interaction you got from all the social media profiles you’ve for your brand, add them together to get that big number. Once you have that big number, divide it by 100 and multiply it with the average CPM cost. (You can get your industry average CPM cost by doing a simple google search.)

The Formula:

Profit: Customer Lifetime Value/10Years X New Customers 

Social Media ROI: (Profit-investment)


In the digital world data is everything and the more data you collect from your digital campaigns, the better for you. All those data can be used to determine ROI, Audience, Conversions, Errors, and many other things that can help you to optimize your future campaigns to generate more profit.

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