Measuring Social media ROI is like asking a sales person what is the ROI of a phone call. They only way to discover the answer is by tracking a volume of phone calls and looking at the conversion rate, understanding those converted and those who replicated the effort. It can be applied to customer service as well, what’s the ROI for great customer service? We know companies that have great customer service tend to be more profitable than those without it, but is it a truly quantifiable return on dollars spent?

The Return On Investment in social media can be measured by looking at:

• Mentions — people are talking about your business and your product.
• Traffic — track the number of people who visit your site or blog, Fan your Facebook page, or follow you on Twitter.
• Positive feedback — look at what people are “saying” about your product. Engage with your customers through social media.
• Tracking promotional codes — How many people are clicking on a link? You can track clicks on specific urls by using url shortener: bit. ly.
• Other sites like Google Analytics, Spring Metrics, Facebook Insights, Tweetreach

Solution:

A  company can measure their ROI from social media by tracking which posts and tweets are driving traffic to the site, converting these trends to sales number.

It is important to keep in mind; social media is about sharing and connecting, creating a meaningful conversation around relevant content and encourage feedback.

There is a difference between traditional marketing and social media marketing. In traditional marketing, you throw out a message to millions of people who couldn’t care less. In social media marketing, you find the people who are already talking about your message and join the conversation.

Without a well thought social media strategy, is worse than neglecting social media altogether.