How to Measure Social Media ROI

Step-by-Step Guide

1. 1

   Step 1: Calculate the new customer value using social media (N): This includes the sales

   and placing a value on these things.
   
   Add them all to get new customer value.
   
   Use Google analytics or any other website tracking software to track these costs.
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   Step 2: conversions

   (It’s like losing a little to gain more and adding the lost and the gained) Here is a formula on how to calculate user lifetime value:
   User lifetime value (U) = (Gross distribution per customer) X Σ (yearly retention rate)^i / (1+ yearly discount rate)^i
   - (Retention cost per customer per year) X Σ (yearly retention rate)^p / (1+ yearly discount rate)^p+0.5 Where Σ runs from i= 0 to n in the first set while in the second set Σ runs from p= 0 to n-1.
   
   Here 'n' stands for the number of periods used in the calculation. ,(In other words the internet advertising for which one has to pay for every time their advertisement is displayed) Here is on how to calculate it:
   Use this formula to calculate, Impression value (I) = (Add up all impressions from Twitter, Facebook, You tube (Cumulative views), website traffic and other online sources) X (Industry based cost per thousand impressions (CPM))/100 ,(Twitter, Facebook ,websites, etc.).
   
   Add all these values to get customer service value (C). ,, Here are the steps on how to calculate the social media expenditure:
   Hard costs:
   Calculate the hard costs which denote the work or costs associated with the actual project during the campaign or during a specific interval.
   
   Soft costs:
   Calculate the soft costs which include the unseen work that composes the initial part of developing a project during the campaign.
   
   Cost/Time spent:
   Unlike other investments, social media has a greater value when it comes to time spent on it.
   
   Calculate the money spent per time spent on social media during the campaign.
   
   Sunk costs:
   Calculate the sunk costs involved during the campaign which include the costs that were required during a new addition or an internal fix during the campaign.
   
   Social media expenditure (E) = Hard costs + Soft costs + Cost/Time spent + Sunk costs ,
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   Step 3: Business to business transactions (B2B)

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   Step 4: Contact value

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   Step 5: Calculate user lifetime value: Here you include the costs that you forgo to retain a customer plus the profit that you gain as a whole

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   Step 6: while endorsing your brand to retain a customer.

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   Step 7: Calculate Impression value: This includes the easy costs that are used to impress customers via social media to ensure a quick viewership or membership.

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   Step 8: Calculate customer service Value: This includes the costs saved on customer service via social media.

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   Step 9: Add all the investment Returns: Investment Returns (IR) = {(Customer Value/ (Time Interval in years)) X Number of new customers + I + N +’’C’’}

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    Step 10: Calculate social media expenditure: Here you need to calculate the amount that you spend on social media during the time of your campaign or just taking a specific campaign interval into consideration.

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    Step 11: Calculate your Social Media ROI using the formula: Social media ROI = (‘‘IR’’ - E ) / E.

Detailed Guide

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