Social media is an important business tool. According to the 2018 Global Digital Report, there are over 3 billion active social media users. It’s no wonder, therefore, that businesses continue to amplify their social media efforts in order to reach more customers. At least 88 percent of businesses use social media.
Jumping on the bandwagon won’t yield magical results, though. Joy Elena, CEO of Sleepenvie, who has mastered the use of Instagram and Pinterest for growing her business, says it’s important for marketers to be clear about the results they expect.
“Social media is good for business, but the goal should be crystal clear,” Elena added. “If you have 1 million followers and they aren’t making actual purchases, then you should revisit your strategy. Businesses need to identify performance indicators that are most important to them and track those indicators.”
While there are hundreds of performance metrics you can track on social media, key performance indicators measure how well your efforts translate into meaningful business results. Ultimately, the KPIs you choose will depend on your specific business goals. Here are the top five indicators to track and improve:
Social media engagement metrics—such as number of likes, shares or retweets—are important because they show how users interact with your brand. However, it would be a mistake to focus entirely on them because, taken alone, these metrics don’t paint the whole picture.
Jim Warner, communications director at Paydayr, compares focusing on engagement metrics alone to consumer oversights with loans: “When people borrow money, they are often so interested in the short-term benefits (the cash) that they fail to consider the other terms associated with the loan, such as the interest rate. So, you have customers taking overdrafts at interest rates up to 17,000 percent, when there are far cheaper alternatives. Engagement metrics are useful only if you compare them to other metrics and make inferences.”
Engagement rate can be calculated using total number of interactions, divided by reach, times 100, where reach is the number of people who potentially see your content. This rate can then be compared a competitor’s engagement rate for more insight.
Share of voice
In social media marketing, share of voice is the percentage of mentions that goes to a brand within an industry. Tracking only your brand mentions may give you a misguided view.
Amit Kanabar of Quote My Energy, a U.K. company that compares business electricity and gas prices, says, “It’s important to always keep track of the competition. Most social metrics, taken in isolation, would not mean much for your business. By stacking them against those of the competitors, you get a more balanced view.”
You can calculate share of voice by conducting a search for each of your competitors, and then dividing your company’s number of mentions by the total number of mentions in your market. Tools like Hootsuite Pro also come in handy.
Goal conversion rate
Social media is often used to drive non-revenue conversions such as e-book downloads or webinar registrations. Measuring the social conversion rate for these goals can help you gauge your success better.
To do this, you would need to integrate social media traffic within an analytics tool, such as Google Analytics, and monitor the referral traffic. You can then calculate the goal conversion rate using number of conversions, divided by of referrals, times 100. If the referral traffic from a Facebook campaign is 673 with 65 successful conversions, then the conversion rate is 9.66 percent.
Return on investment
ROI is one of the most important social media KPIs because it measures the monetary aspects.
To calculate returns, you should choose a goal or action to track and assign a monetary value to the goal conversion using historical data or by estimation. For investment, estimate the cost of time, social media tools and advertising campaigns.
As more people turn to social media for complaint resolution, a KPI that proves how social media fits into your customer-service goals can be helpful. Consumers expect issues to be resolved quickly on social media. For example, 72 percent of consumers expect Twitter complaints to be answered within one hour.
By measuring the response time over a given period—say, for a quarter—you can tell how your average response time has fared compared to the previous quarter. You can also keep track of the total number of issues resolved through social media.
Monitoring the right social KPIs helps you understand which social media activities or platforms yield the most benefits for your business and which areas need improvement. The key thing here is to stay consistent in calculations across your social media platforms and to constantly revise your methods.
Pius Boachie is a freelance writer and inbound marketing consultant who works closely with business-to-consumer and business-to-business brands on providing content that gains social media attention and increases search-engine visibility. He shares actionable marketing ideas for businesses on his blog, Digimatic.