In the first part of our Social Media KPIs series, we discussed the campaign goal Reach. Reach is important to measure if your social media campaign’s goal is to build brand awareness and to target as many qualified users as possible.
Reach includes KPIs like follower count, impressions, social mentions and share-of-voice. It’s important to remember that even though your content might reach thousands of followers, it doesn’t mean it will bring a desired action; e.g., click, download, registration signup.
A KPI such as engagement, however, does begin to answer the question: “Are my followers showing interest in my brand and my products?” And… “how can I determine this?”
Social engagement measures how you directly communicate with your customers and how they communicate with you. Common engagement and conversion indicators include:
- Likes & Favorites
- Ratings and reviews
- Inbound website links
- Direct Sales Revenue
- Lead Conversions
- Retention and loyalty
To help you understand where reach and engagement fall within the hierarchy of social media KPIs, we created the following graphic:
Engagement is a better metric to determine the true success of your social media campaign, because it demonstrates how people are taking action in relation to your brand; i.e., how often your audience interacts.
A high engagement rate is an indication of quality content and “real” followers (people that engage).
Likes or favorites
Tracking your likes and favorites will help you establish whether your audience actually appreciates your content. When someone ‘likes’ your content, it serves as a sort of stamp of approval.
Hootsuite calls this your Applause Rate. Knowing this rate will ensure that you always share valuable and appropriate content with your audience. An applause rate is determined by comparing your total likes to the number of followers you have.
Example: Let’s say you received 50 likes on a post, and you have 1,000 followers. Your calculation would be 50 ÷ 1,000 =.05 or a 5% Applause Rate.
Comments are worth tracking because they demonstrate how your audience engages. If people frequently comment on your posts, it indicates that they are consuming and “engaging with” your content.
Sharing and retweets
Shares and retweets demonstrate that your audience cares enough about your content to pass it along to their colleagues, thereby implying their endorsement or point-of-view.
Ratings and reviews
Not only is it essential to track ratings and reviews to protect your brand’s reputation, but also customer reviews demonstrate strong engagement and opinion.
Inbound website links
Tracking how many of your inbound website links come from your social media posts demonstrates that your content is driving action; viewers are interested enough to click through to your site.
You can calculate the average engagement rate of your social media content by using the following formula:
Example: Let’s say you want to calculate the engagement rate of a post. You have 500 followers, and your post received 30 likes, 20 comments and 10 shares. Your calculation would be 30+20+10 ÷ 500 = .12, or a 12% Engagement Rate.
A critical social media KPI to measure is ROI (Return On Investment) since it directly affects your company’s bottom line. Management will want to know that for every $1 invested in social, there was, say, $1.50 generated in sales.
Unless you have an eCommerce brand, it’s difficult to demonstrate such a straightforward ROI. However, there are tools and gauges to help you fine-tune your approach. For a complete breakdown of social media ROI click here.
Let’s take a look at the 3 most common ROI calculations:
Cost Per Click (CPC) – Measures the price you pay each time an online advertisement is clicked.
Example: If you spent $200 and 20 people clicked on your ad, the CPC would be $10.
Cost Per Lead (CPL) – CPL is the amount of money spent on generating a single lead.
Example: If you spent $100 on a campaign and received 3 phone calls/emails from people interested in your product, the CPL would be $100 ÷ 3 or $33.33.
Cost Per Sale (CPS) – CPS is the amount of money spent on generating a single sale.
Example: You spent $1,000 on Campaign A, which generated $5,000 in new revenue, so your cost per sale is $0.20.
Direct Sales Revenue
The best way to track direct sales revenue is by analyzing purchases that result from specific social media campaigns. For example, if you are advertising a 10% discount coupon-offer on Facebook, the best way to determine the impact of your social media campaign is by tracking orders generated by the coupon. Another example would be to track unique links to your website driven by a specific promotion (shared on social media) that actually led to a purchase.
According to Hubspot, lead generation is the process of attracting strangers and prospects, converting them into people who have indicated an interest in your products or services — that is, “people who raise their hand.” Some examples of lead generators are job applications, blog posts, coupons, live events and online content.
Tracking lead conversions shows that your lead magnets are actually moving people to take action. For example, if you are promoting a lead magnet like “trial software” or “a free ebook” you would track the number of actual sign-ups or downloads to establish if your lead magnet is successful.
You can calculate your conversion rate by using the following formula:
Example: 4,100 people clicked on the link to download your ebook. 130 of those people downloaded your ebook. Your calculation would be 130 ÷ 4,100 = .03 or a 3.2% conversion rate.
Retention and loyalty
This social media KPI is all about knowing what people think about your brand and product. To measure retention and loyalty you have to take a deeper look into the following aspects of your business:
- Customer reviews and ratings.
- Issues resolved; i.e., how well you take care of your customers through social media.
- Time to respond: the amount of time that passes between when a customer reaches out and a response.
- Time to resolve: the amount of time that passes between when a customer reaches out and a solution.
According to Social Media Examiner the best way to measure retention is by actually assigning a lifetime dollar value to every customer. If you respond to a negative review and subsequently convert a disgruntled customer back into a loyal customer, ask yourself: “How much is one customer worth to me?”
With every social media effort, you are in some way maintaining relationships. Each month a customer remains loyal is worth a certain amount of revenue to the company.
Something to think about…
“When people ask me what’s the ROI of Social, I ask them… what’s the ROI of Trust, and what’s the ROI of Loyalty? The answer, when used to build relationships, the results will be…longer lifetime value of a customer, larger average order value, and increased frequency of purchase. All measurable and all lead to increased sales and profits.”– Ted Rubin (Author of The Age of Influence)
Social Media KPIs play a substantial role in building the foundation for the success of your social strategy. Revisit your KPIs every six months to ensure they still align with your social goals.