How to measure your Social Media ROI in just a few steps!

Customer Segmentation

How to measure your Social Media ROI in just a few steps!

So many small businesses are using social media. But, without being a social media guru, how do you know which social media channel is giving you the best return on investment (ROI)?

Social Media ROI

Would you know where to spend your money on social media if you were asked? Would you be able to make informed decisions? If the answer is no, then read on to find out how you can measure your social media efforts in just a few simple steps!


What is social media ROI?


Social Media ROI is what you get back from the time and resource you have invested in a channel (for example Facebook). By measuring your ROI you will be able to: –


– Prove which social media channel works for you

– You’ll know where to spend and allocate your social media marketing budget

– You’ll be able to modify and optimise future use of social media channels


But what does it mean to me?


“ROI” means different things to different people… some businesses may want more product sales and others might want to simply increase their app downloads… so where do you start?


Firstly, you need to…


Set up Google Analytics to track conversions 

Google analytics the most powerful tool for tracking and analysing website traffic. To determine whether your social media efforts are paying off, you should get familiar with the “acquisition” tab. There you’ll find out not only how many visitors come from each type of referral method (e.g., organic versus social versus paid, etc.), but also how many find your site through specific platforms such as Facebook.

Define your goal

(eg. “Cupcake Delights” would like to measure ROI on its newsletter sign up through Facebook.)

Specify the right action that meets your goal

(eg. To measure this goal “Cupcake Delights” will set up a “goal” in google analytics to measure how many people have signed up for the newsletter)

Specify the value of this action

(Eg. To work out the value of an action “Cupcake Delights” will use Formula A and B below)


Formula A – Customer Lifetime Value (CLTV)

How much do you earn on average from a customer?


Customer Lifetime Value (CLTV) (average order size) x (how long the customer stays with the company)


For Example

Cupcake delights is a cupcake business selling to the public and the corporate sector. 1 in 10 visits who signs up to the newsletter becomes a customer.  A typical customer spends £15 per month and stays with the company for an average of 2 years.  To find out the Customer Lifetime Value “Cupcake Delights” will use the following calculation: –


£15 per month x 12 months x 2 years = £360.00 (CLTV)


To work out the value of each goal “Cupcake Delights” will use Formula B: –


B – Value of each goal completion


Customer Lifetime Value (CLTV) x Conversion Rate (CR) = Value of each goal completion

Customer Segmentation2


For Example:

1 out of 10 visits to the cupcake website sign up = 10% Conversion rate (CR)

CLTV (£360.00) x CR (10%) = £3,600 (Value of your goal)


Check out your competitors!

It’s always good to see what your competitor is doing to help you benchmark your marketing efforts. By using these steps, you will be better informed, understand what social media platform works best for you and will be better equipped to compete with others in the market place!


Making Sense Of ROI

If calculating ROI seems like an impossible task, don’t worry! we are here to help!

Our social media and Facebook advertising specialists are on hand for as little or as much support as you need. Contact us if you’d like to discuss a strategy, get ideas for content, or even have a complete Facebook Ad sales funnel designed especially for you.


Just contact us, and we’ll even throw in a free overall marketing consultation!


We look forward to hearing from you 😉

Click to book a strategy session

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