Many companies waste an enormous amount of money on exciting, quantity-focused metrics such as page likes, amount of impressions, video views, etc., which are considered ‘vanity metrics.’
Vanity metrics may look great when presented to a client or boss, but often they cause companies to waste money as sales continue to fall short of goals. Looking at these metrics alone do not tell the entire story. You can not look at them individually. They must be part of the full story of return on investment (ROI).
“Don’t be deceived by looking at vanity metrics alone. They are one part of the entire measurement story.” – Steph Nissen
As a digital marketer, I consider it my job to educate clients on the metrics they need to measure so that they can correctly show the actual results of social media marketing.
While there are several different lead generation metrics depending on the needs of a client, below you’ll find the 6 “go-to” key performance indicators I use to endorse effective digital marketing management. It’s important to dive deep into each to give you a clear picture of how to measure the results of your social media marketing.
Social Media Originated Customer Percentage
What percent of your CUSTOMERS come from each lead source within social media? Of all the new customer acquired each month, quarter, year – how many can you attribute back to social media? And of that number, how does it compare to the total new customers from all sources?
From knowing this number, along with the total amount of revenue attributed to those customers, it can give a clear picture if social media is producing meaningful revenue.
Calculation: (Number of New Customers from Social Media) / (Number of New Customers Total)*100 = Social Media Originated Customer %
Cost of Lead Acquisition (CLA) by Source
What is it costing you to acquire leads? First, determine all of the various sources bringing in leads. Then break it down into the number of leads coming from each source. How much is each source costing you?
By finding the number of leads coming from each individual source, you’ll begin to understand the value of each lead source and whether or not that source is worth the time or money you are investing into it.
Maybe your least expensive source is bringing in the most leads, while your most expensive source is bringing in the least! This is a great step to analyze which sources you should allocate more or fewer resources towards.
Calculation: (Total Cost of Source)/(Total # of Leads from Source) = CLA for Source (repeat for each lead source)
Traffic to Lead Ratio
While many people may view or interact with your social media content, how many are engaged at a high enough level to be considered ready to advance in the sales process?
While this metric can be a scary one to find it’s also incredibly important. By determining the effectiveness of your social media efforts to bring in leads, you can then begin to craft your social media strategy around this data to source more leads instead of hiding from the scary data!
Calculation: (Total Social Media Acquired Leads) ÷ (Total Social Media Acquired Traffic) = Traffic to Lead Ratio (repeat for each acquisition source to have a clear picture of your best traffic to lead source)
Engagement Rate
When it comes to your target audience, who is actually engaging with your social media content to learn more about your brand?
While some content may drive likes and comments, do these engagements lead to people wanting to learn more about your company or are they simply engaging because it’s a cute quote or funny picture?
This metric helps to uncover whether your social media strategy is working to engage and guide your audience to discover more about your company. Both pieces are important for developing an effective social media strategy!
Calculation: (Total Number of Engagements)/(Total Impressions of Your Social Media)*100 = Engagement Rate
Marketing Qualified Leads (Lead to MQL Ratio)
Are your leads downloading content, clicking to the website, filling out contact forms? If not, how can you use social media to direct people towards these actions in an engaging way? If so, are these leads within your target market or do you need to rethink your messaging?
While it may seem like enough to bring in leads from social, you must calculate how many of these leads are meeting marketing qualification requirements pre-determined by your company to determine the quality of these leads.
Calculation: (Total Number of Marketing Qualified Leads from Social Media)/(Total Number of Social Media Leads)*100 = Lead to MQL Percentage
Sales Qualified Leads (MQL to SQL Ratio)
Once you determine the amount of marketing qualified leads from your social media marketing, now it’s important to track how many of these leads meet sales qualification requirements.
You’ve done your job to bring new leads through the door, warm them up with relevant content, and drive those in your target market to action, but do your social media efforts have what it takes to turn these leads into customers?
This metric will determine how well your social is doing to not only attract new leads but to bring in the right customers already excited to buy.
Calculation: (Total Number of Sales Qualified Leads from Social Media)/(Total Number of Marketing Qualified Leads from Social Media)*100 = MQL to SQL Percentage
Calculating Social Media ROI
If you are struggling to measure the results of your social media marketing, start integrating these six metrics into your auditing process. Work with the sales team to understand your company’s current sales goals and use these metrics to restructure your social media strategy to help generate leads.
While it may be exciting to report on vanity metrics and how great it looks like you are at your job, using these metrics will ultimately save, or better yet, make your client or company money, nearly guaranteeing that you will be an asset to the company going forward.
Note that these social media marketing ROI metrics are based on a social media strategy that focuses on lead generation. If your social strategy revolves around sales validation, sales enablement, recruiting, customer advocacy, market research, or any other primary goal, you will have a different set of metrics to review. If you’d like to discuss which metrics you should be traffic to your company or client’s specific social media ROI goals, set up a time with me and I’d be happy to discuss.