What is the True ROI of Social Media?


What is the True ROI of Social Media?

What is the True ROI of Social Media?

Have you ever considered what the true Return on Investment (ROI) of social media is? Is it worth having and using Twitter, Facebook, Instagram, LinkedIn, and other platforms? Or is it time that you’d be better off spending on direct sales, such as cold calls? Stay with me while I explore this topic just a bit.

ROI of social media defined

You may be wondering if it’s possible to figure out what the true ROI of social media is. It’s not always straightforward. If measuring your ROI feels like a guessing game, that’s because it is! In fact, Sprout Social in their article How to Define an Actionable Social Media ROI for Your Business says this: “Besides, not everything you do on social media translates directly into dollars and cents.” In my over ten years using social media, I’d have to agree. Sprout Social, like many others talks about brand awareness, not following the money.

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What is the True ROI of Social Media? | Image by Anemone123 from Pixabay

It’s about brand awareness

You can’t always prove that a customer found you because of social media. You can ask them if and when you make a sale, but that’s not always feasible. If you put money into your game, it’s more likely. But bear with me here. It’s more that customers know you exist. Social media is one stepping stone to someone becoming a customer, or knowing someone else who might like your services. And these days with social media, it’s mostly a pay-to-play game, especially if your product is a little odd or not your usual run-of-the-mill service. By the way, I’ve talked about brand awareness and social media before. You might like Social Media Isn’t Actually about Sales.

How many touches before a sale?

This is a question we social media managers get asked all the time. Unfortunately, the answer is: it depends. If you’re selling pencils, maybe it takes one touch. But if you’re selling diamond-crusted pens, that could mean eleven touches! Or twenty! Think about how you make a buying decision. You don’t just buy the first car where the dealer offers you a free pineapple, do you? Well, maybe if it’s a really really juicy pineapple. Just kidding.

Use Bit.ly to point to your Amazon Author Page: http://bit.ly/CSAuthor

Use Bit.ly to point to your Amazon Author Page: http://bit.ly/CSAuthor

So how do you measure the ROI of social media?

You can measure things other than sales numbers, such as when people go to your website or when they want to buy your goods. For a restaurant, that could mean someone using a delivery service to order food or checking your menu. For these measurements, I like to use bit.ly, but there are other ways to create clickable links as well. I’m not an affiliate, by the way, just a fan. If you create a shortened link, you can also customize it. For instance, on my Twitter bio, I have a shortened and customized link to my Amazon Author Page, where I sell my books. You could do the same thing. Occasionally, you can log into Bit.ly and see how many people clicked on that link.

Using formulas to calculate social media efforts

You could also use a formula to discover whether your efforts on social media are paying off. In this article How to Measure Social Media ROI, emplify uses the following formula, which they call the most basic social media ROI formula:

Profit / Investment x 100 = social media ROI %

So you can use this to discover whether your paid ads are paying off immediately. However, as they mention in the article, you can use other methods such as newsletter signups, follower counts after a paid ad campaign, etc. Only you can decide what’s important to your brand.

Benchmarking is important

Benchmarking might seem like an incredibly difficult thing to do, but don’t let it put you off. It’s simply a way of measuring what’s important to you. To benchmark, ask yourself which stats are important to you or your brand. Is it engagement? Don’t forget that follower count is most often considered a vanity metric. Some of the larger accounts with huge numbers of followers have no engagement! And that’s just silly. It’s much better to focus on things like engagement. Here’s an article about engagement you might like: For Better Social Media Results, Focus on Engagement.

Engagement and visibility go hand in hand

For any brand, getting out there on social media is no longer optional. In my opinion, everyone needs to be there. Your potential clients are looking for you and your services, whether it’s on Twitter, Facebook, or Yelp. It’s important to make the effort.







  1. For some of us, I think it’s close to impossible to figure out our ROI, if we actually have one. For instance, most of my potential clients are either going to be in health care or leadership; the competition’s too voluminous, plus search engines don’t always interpret what I do properly; I’m a lost cause.

    With that said, I write for my accountant, who gives me free services. I also created her website; it ain’t pretty, but it gets the job done. Until recently, it was just her, two other accountants and a secretary working in her office; definitely a small business, right? However, if the proper search times are used, she either comes up #1 or at least in the top 10 in accounting firms in the local area. Why? Because I’ve SEO’s her site well and I keep continual new content showing up on her site, while the big boys are assuming that they’ll be found regardless of what’s on social media. My accountant’s thriving; she’ll never be in league with the major players, but she’s living well because of the people I’ve helped bring into her office. Yeah, I’m proud of that! :-D

    • Hi Mitch,
      You’re so right about how impossible it is for some to determine their ROI. Health care and leadership are difficult enough without trying to figure out the ROI of posts.

      That’s great that you write for your accountant! Do you share the articles anywhere that I’d see them? And you’ve done a great job with getting her website found by the right people (locals are probably most of her business, right?). Sounds like you’ve helped her find her niche online, at least so she can be found be the right people. Congrats to you!

      Thanks for sharing,

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