Thursday, 15 December 2016

How to Measure Return on Investment

It‟s difficult to say how each company should quantitatively measure their social media efforts without knowing more about the company, but in general, anytime a company can convert metrics and analytics into dollars is usually the best approach. This is easier to do with sales and customer services usages, while more difficult to do with public relations, marketing, and research and development usages. Here are some metrics to keep in mind when trying to calculate the ROI of various services:



Landing page conversion percentage

# of opens for each email

# of clicks of links in each email

# of email subscribers who purchase something


Total # of posts or average page views per post

Traffic overall or per post via a service like Google Analytics

Subscriber counts via an RSS service like Feedburner

Comment counts per post (measures engagement)

Demographics information via a service like Quantcast


# of Fans of members in your group Percentage of items shared on Facebook Percentage of traffic driven to website Facebook fan page analytics


# of followers

# of retweets of all links

# of people who respond (@) to questions, polls, etc. Percentage of traffic driven to website

Became a trending topic or not


# of reviews for submitted item Traffic driven to site

Made it to the front page or not

# of people who subscribed or signed up after landing on the page


# of Diggs

# of comments on the Digg site Traffic driven to site

Made it to the front page or not

# of people who subscribed or signed up after landing on the page

Case study to calculate ROI: Naked Pizza

Naked Pizza is a New Orleans-based healthy pizza join that specializes in its low-calorie slices that weigh a fraction of a normal pizza slice. The company built a 4,300 person following on Twitter in 2.5 months. Though the company is local, Naked Pizza is still able to use Twitter to advertise within a 3 mile radius.

Using analytics tools to find entrance rates, Naked Pizza has found that, on average, 20% of sales come from users who enter the site via Twitter.Furthermore, during one particular advertising blitz on Twitter, the company found that 69% of their sales for that day first came to the site via Twitter‟s website. The normal 20% of sales per day are sustained as long as CEO Jeff Leach tweets – which he does at least once and up to 15 times every single day.

Because Naked Pizza was able to change their analytics metrics into dollars, the company was able to make an important business decision: to change their company sign, which originally had an order phone number on it, to their Twitter handle. By the way, Naked Pizza gets an average of 35,000 people who drive by every day, and is working to become a national chain.