Most marketers spend a lot of time on social media marketing, developing campaigns and engaging with followers and so-called ‘friends.’ Yet many express frustration at their inability to measure its effectiveness.
According to Econsultancy’s sixth Quarterly Digital Intelligence Briefing, 70% of respondents believe social media needs to be more rooted in data, but less than 25% are leveraging social data to optimize their marketing.
Yet calculating social media success is not that difficult. Here are a few tips and tricks to help you measure your Twitter ROI, along with four bonus metrics to quantify your success
related to this platform.
Return on Investment
Return on investment, or ROI, is the most important measurement metric for all of your marketing efforts, including social media. The calculation for ROI is:
(Gain from Investment – Cost of investment)/ (Cost of Investment) = % ROI
Gain from investment
Gain from investment is the sales revenue you generate from tweeting. To determine this number, use closed-loop marketing. It is the process of tracking the path of a website visitor from the time they click on a link in Twitter, visit your site, complete a form (or take another conversion action) and turn into a customer.
There are a number of analytic tools to help with this process. Google analytics are free and track the number of people visiting your site from Twitter. Paid tools, including HubSpot, Marketo and Pardot, show the number of people who land on your site from Twitter, and then convert into a lead.
For larger companies, a customer relationship management (CRM) solution such as Salesforce lets you close the loop between the leads generated from Twitter and sales. If you work for a small company, it’s easier to track the link between sales and leads, without the need for additional software.
Cost of investment
Unless they purchase paid ads, many marketers mistakenly believe social media is “free.” Yet many companies, if not most, dedicate countless staff hours to developing and implementing an effective social media strategy. In the case of Twitter, even if your company doesn’t purchase any ads, there is still an associated cost.
Let’s assume you work for a mid-sized company selling software to large, enterprise organizations. Your marketing director and social media community manager work together to develop your social campaigns. The community manager spends most of their time executing the campaigns, responding to people via your various social channels, and monitoring the results.
Your marketing director makes an annual salary of $120,000, while the community manager is paid $80,000. If the director dedicates 10% of their time to social media and the community manager spends 20% of their time on Twitter alone, the cost of your Twitter investment is:
20% x [10% x $120,000] + 20% x $80,000 = $18,400 per year
This B2B company sells software on a subscription basis for $10,000/year, and the lifetime of a customer is typically 5 years. In other words, their customer lifetime value is $50,000.
There are two ways to calculate the ROI of their Twitter investment. The first uses the sales from the initial sale only, while the second uses the customer lifetime value.
ROI using sales from initial sale: $10,000 – $18,400/$18,400 = -46%
ROI using customer lifetime value: $50,000 – $18,400/$18,400 = 172%
If I were the marketing director at this company, I would definitely use the second calculation to demonstrate the value of Twitter to my boss.
Other quantitative Twitter metrics
If you’re new to Twitter, it can take a while to see a positive ROI from your efforts. In the interim, here are 4 additional metrics to gauge your progress.
#1 Follower count and growth rate
I do not put a lot of faith in follower count. At any given time, tweeters have a percentage of followers who are no longer actively tweeting, plus more who are not online when they tweet.
On a related note, there is also the problem of ‘fake’ followers. According to this article in the Daily Mail, celebrities, businesses and government departments buy bogus Twitter followers from click farms to enhance their social proof.
Nevertheless, tracking your Twitter follower count and its monthly growth rate is an indication of your initial success on this platform. And let’s face it, you need followers to participate on Twitter.
#2 Twitter followers to following ratio
The follower to following ratio, also called the TFF Ratio, is a simple calculation that divides your followers by the number of people you are following. This number should be greater than one.
When someone follows me on Twitter, I look at the TFF ratio to help me decide if I should follow back. If it is less than one or greater than 10, alarm bells ring. If it’s the former, they may be a BOT. And if it’s the latter, either they like to hear themselves talk or they have many ‘fake’ followers.
#3 Listed
A Twitter list is a curated group of Twitter users. It’s easy to create your own lists or subscribe to lists created by others. They are a handy tool, especially if you follow many people. A list helps you group specific people into more manageable groups. For example, I regularly follow lists of clients, social media influencers, inbound marketers, and media.
The number of people who have listed you on Twitter is an important metric. It shows people want to hear what you have to say, beyond the noise of their never-ending Twitter home feed.
It’s simple to calculate how many people have ‘listed’ you. Go to your Twitter home page, click on lists on the left hand side, then select member of:
#4 Engagement
The calculation for Twitter engagement is:
@replies + retweets + @mentions
It’s another important metric since it indicates how engaged people are with you on Twitter. If no one is responding to your tweets, or you aren’t having any conversations, it is unlikely you will convert any customers.
A final word (or two) about awareness
While researching this post, I found a number of articles that advised measuring awareness from Twitter with metrics like volume, reach, exposure and amplification.
Two words: please don’t.
You can only measure awareness with a survey that asks people to:
- Name the first brand that comes to mind in your category (top-of-mind awareness)
- List any brands in your category (unaided awareness)
- Indicate if they have heard of your brand (aided awareness)
And the only way you can measure awareness from Twitter, is if it’s your ONLY marketing activity. If you are thinking of hiring a marketing agency who recommends measuring awareness from the reach of your tweets, run for the hills.
If you need help developing and measuring your social media marketing campaign, get in touch to find out how we can help.
