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4 Steps to Measuring Social Media ROI in B2B Marketing

  
  
  

The decision to invest in social media as a B2B marketing tool almost always boils down to three words: return on investment.

According to data compiled by Economist Intelligence Unit, 45% of businesses stated that the inability to prove ROI was the biggest roadblock to social media investment.

social media roadblocks

But the "I can't measure ROI," excuse no longer cuts it. The emergence of closed-loop marketing tools, which collect data at each stage of the funnel, has removed this B2B marketing obstacle. There are numerous closed-loop B2B marketing software solutions available. At G2M Solutions we use HubSpot inbound marketing software. In conjunction with the software, we use a four-step approach to measure the ROI of our social media efforts. 

Step 1: Segment data by platform

Firstly, we segment our data so we can analyse the individual performance of each platform. Whilst all the platforms we use are integrated into our overall marketing strategy, we employ different tactics for each platform which need to be examined separately. Furthermore, by analysing each platform separately, we can calculate ROI for each platform as well as overall ROI. 

Step 2: Measure website traffic quantity 

B2C marketers often evaluate social media performance by measuring fan and follower numbers. We do not recommend this. In B2B marketing, it doesn't matter how many fans you have if nobody pays attention to what you're saying. What really matters, is how much website traffic is generated as a result of people clicking on the links in your social updates. Hence, traffic quantity is indicative of how effectively social media is being utilised to distribute content as a means of bringing more people into the top of your funnel. From our experience with B2B marketing, LinkedIn is by far the most powerful social media platform for generating traffic, followed by Twitter. 

Step 3: Track visit-to-lead conversion

After we've established the quantity of traffic generated by each platform, we can then determine the quality of this traffic by calculating the visit-to-lead ratio. The visit-to-lead ratio is calculated by dividing the number of leads by the total amount of traffic. For example, if LinkedIn generated 500 visits to our website of which 50 became leads, the visit-to-lead ratio would be 0.1 or 10%. If in contrast, Twitter generated 600 visits at a visit-to-lead ratio of 5%, it could be concluded that the traffic generated by Twitter is of a lower quality than the traffic generated by LinkedIn. However, it's important to note that a low visit-to-lead ratio could be the result of other factors such as irrelevant or poor quality website content, poorly designed landing pages and weak offers. 

Step 4: Track lead-to-customer conversion   

The last stage of the loop involves determining how many leads converted into customers by calculating the lead-to-customer ratio. The lead-to-customer ratio is calculated by dividing the number of customers by the total number of leads. Once you've worked out how many new customers you've gained as a result of your social media marketing efforts, you can finally calculate ROI!

Learn more about the link between Social Media and Revenue

If you'd like to learn more the impact social media has on revenue, download our free white paper 'Social Media: Can It Impact Revenue?'. 

 

 

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How do you calculate your social media ROI (if at all)? Share with us in the comments section below.

Comments

Nice Post, James.  
 
I agree with you completely about measuring the ROI of social media. As a HubSpot user and service provider in the United States, I also agree with you about the ease and value of using HubSpot to help you do so.  
 
Because HubSpot offers a SaaS or cloud software solution, they can gather data on what works and what doesn't, across the full spectrum of all their 4,500 customers. Interestingly, a HubSpot employee recently told me that social media generate a lot of traffic and leads for their B2B customers, but so far the number of leads that convert to new customers and revenue are rather low. This means that across the board, social media have shown a rather low ROI compared to other marketing tactics. This is likely to change with time. But even today, social media are really valuable for getting more traffic to your site and for getting higher natural-search rankings for your web pages. Bottom line: Social media are definitely worth using in B2B, but it's wise not to expect a high ROI in the short term.  
 
Dave Vranicar
Posted @ Thursday, April 26, 2012 6:28 AM by Dave Vranicar
Thanks for the comment Dave!  
 
You make a valid point. Social media is still in its infancy and marketers are still learning how to get the most out of it. As we get better at building online communities and feeding them with relevant content, we will see ROI improve.
Posted @ Thursday, April 26, 2012 5:27 PM by James Chatman
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