What’s The ROI Of Your Social Media Strategy
When I start talking to lifestyle entrepreneurs about their businesses and the specific challenges that they're facing, usually one of the first things to come up is social media. I hear things like if I didn't have a business, I wouldn't be on social media. Social media is so draining. I'm exhausted from trying to think of something new to say on social media. Does this sound familiar. It's a really common problem. And yet everybody seems to persevere and keep fighting this uphill battle with social media. So today I want us to look at whether or not that is a viable strategy for you. And I think that is part of the problem. With all the social media options that are out there, we're never quite a hundred percent sure if it's working. Yay, we're growing followers, but we're also getting a couple of clients. How do we actually know if we need to push more or if we need to pull back a little bit? And in order for us to find a way to get a sense. It's just a direction, a guideline on whether we're going on the right track. I want us to pull from paid advertising. maybe you jumped onto this episode and you're thinking, I don't really know what ROI is, so let's start there. ROI is the return on investment. This is a nice financial way of saying how much profit did I make as a percentage of how much money I spent to make it. Ideally, you want that to be positive? You want to be making money. So in a paid traffic situation, if you're speaking to someone who's going to run Facebook ads for you, and they have an ounce of integrity, one of their first questions to you should be, how is your funnel converting? Because you can drive as much traffic as you like to your business. You can pay Facebook, all of your money in the world and you will get traffic. But if it is not converting, there is no point. We hear a lot about people talking about Oh, I put $10 into Facebook and I get $20 out. There are a lot of people putting $20 into Facebook and getting $10 out. A lot of what happens with paid traffic is there is a lot of metrics that go into it, there's a lot of monitoring that's happening to make sure that overall you are making more money than you're spending. Now, if we look at social media, organic traffic in general, we start to think about, how do I measure the cost of this. because it's free. So does that mean even if I only make one sale a year it was totally worth it? If that was the case, why do people feel exhausted? Drained, frustrated. what I want to look at is how we can work out what our return on investment on our free traffic is. As the CEO in your lifestyle business, you have two assets that you can invest your money and your time. In your free strategies, you are investing your time. You're investing time in finding the perfect picture, writing an amazing caption, finding the right hashtags, engaging when people comment, maybe doing an engagement strategy where you are going into, Instagram to find your ideal people, and engaging on their posts. Maybe you're having DM conversations with people. There are a lot of elements that go into social media and all of them are taking time. The problem is that often when we are putting our time into our business, we are not adding that in as a cost. We see it as well, we didn't have to pay to be on social media. So therefore there is no cost to social media. let's say you did an hour a day on social media. I want you to think about what that hour might be worth and your business. Could you be using it for sales calls and bringing in new business? Could you be offering that as a power hour to someone else? Could you be with your kids for that extra hour and not have to pay for childcare? That is how you start to think about your time in terms of cost. And once you have a cost, you can start to calculate a return. I want you to take a month and really track the time that you are spending on social media, creating it, responding to comments, engaging with people. I want you to give that time of value. I want you to stop seeing your time as free. It's free in monetary terms. It is not free in terms of time and energy. And if you have a time goal in your business, say you want to only work four days a week. Your time resource is even more restricted. if you take nothing else away from this episode, take that your time has value. Once you know what that cost is, it's a really simple, like the number of hours, times hourly rate gives you your cost. You'd then be able to look at, okay, how much money did I make organically. So if you have a paid strategy, exclude that revenue. if you don't have a paid strategy, you just put all your revenue in for the month. And I want you to say, okay, what's what was my profit? So I made this much revenue and a cost this much. I want you to see, first of all, is that number profitable. If that's not profitable, you need to rethink the strategy. And then I want you to think about, okay, how much of a return on my time did I get. what is that profit over the cost that I invested? And the reason I want you to have this ratio is I want you to be able to start thinking more deeply into your business about what other strategies you might be employing, such as referral marketing or direct outreach. You can measure in a similar way to work out, which one is giving you more ROI. ROI is basically how much bang did you get for your buck? Just in your case, that's your time buck instead of your monetary buck.
If social media is a free strategy, how do you measure whether it worth your time, effort and energy?
As the CEO in your lifestyle business, you have two assets that you can invest your money and your time. In your free strategies, you are investing your time.
In This Episode
- What is ROI?
- How to calculate a return on a “free” strategy
- How to set up and monitor a metric going forward
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The information contained above is provided for information purposes only. The contents of this podcast episode and article are not intended to amount to advice and you should not rely on any of the contents of this article or episode. Professional advice should be obtained before taking or refraining from taking any action as a result of the contents of this article. Diane Mayor disclaims all liability and responsibility arising from any reliance placed on any of the contents of this article.