One of the most important, and often overlooked, elements of any paid promotion is the ability to judge success. In social media, determining if a campaign was worth your money can be even more daunting:
1. Determine the Value of Your Average Customer
The first step in judging paid promotion success is understanding the value of your average customer. For someone who buys your product or service, what is the average order value? What percent of customers order again in the future?
Let’s say your average customer order is $100 and 50% of customers reorder at the same average order size of $100. Your average customer would be worth $150 = $100 + (50% X $100).
2. Track the Traffic That Your Social Campaign is Generating for Your Business
There are several ways that you can determine how much social traffic you are driving with a paid promotion. One of the easiest is to extend a special offer through your social channels that can be redeemed with a specific code or phrase.
For example, if you’re a florist and want to track traffic generated by a social media promotion on mother’s day, offer a 10% discount for customers who use the promo code “Mom2014” on your website or at your physical store. After the promotion ends, you’ll be able to total up all of the purchases that were generated.
3. Compare Earnings and Expenses
The final step of determining success is comparing how much you earned with the promotion to how much you spent in social media advertising.
Earnings: Average Customer Value X Number of Customers
Expenses: Social Media Advertising Expense + Any Discounts or Free Giveaways
A good rule of thumb for any campaign is to have your Earnings greater than twice your Expenses. This builds in a margin of error for the above calculations and provides more confidence that social media truly is working for your business!
Try tracking your next paid social promotion with the techniques described above and you’ll instantly have a better grasp on the value of social media to your business. Let us know how it goes in the comments below!