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