Building a social media strategy for business can feel like piloting a spacecraft. You’ve got places to go, high hopes and ambitions, but when and how do you know you’re getting there? The universe is disorienting. Social media is an ever-expanding, constantly evolving tool. How do you track your progress as you keep moving and avoid running into a black hole (financially speaking)?


If you’ve seen any science fiction, you know that you need a reliable navigation panel. Social media may be the new marketing frontier, and to succeed you may need to boldly try what you’ve never tried before, but that doesn’t mean you fly blind and hope for the best. Measuring the ROI of your social media investments is possible. Here’s how you can make sure you’re on the right track.


Social Media: Target CPA


As in other areas of your business, you want to hit your target cost-per-acquisition (CPA). This is a powerful metric. It reflects your cost in resources spent to make a sale divided by the number of sales. In other words, it shows you how much your organization spends to create one conversion. You may have an overall marketing CPA, but you can also narrow it down and calculate a social media CPA.


So what is a reasonable target CPA for social media in your industry and a business of your size? Only you can answer this, but you may have to do some math. It begins with your sales goals: What is your desired net profit per conversion? Here is your formula to figure out your CPA:


Average Transaction Value

 – Cost per transaction (fixed and variable, non-marketing)

   = Gross Profit


Gross Profit

  – Desired Net Profit

   = Target Social Media CPA


This yields your total, ideal cost for social media efforts per sale. You may look at your platforms and strategies at this point and ask, What percentages of this CPA do I want to spend per platform (Facebook, Twitter, LinkedIn, etc.), and/or what percentages do I want to spend per effort (direct sales vs. likes, shares, comments, etc.)?


A note on the math

The point here is not to be perfect — especially not the first time. Tracking your ATV and costs will get better over time, but it is never going to be one hundred percent accurate. Calculating targets that may need to be adjusted down the line is far better than neglecting to create them at all — a mistake which cuts your ROI calculation off at the ankles.


Now that you have your targets, how do you know when you are meeting them?


Direct ROI


There may be some instances in which you can measure a direct ROI. This includes any instance in which there is a clear, traceable link between a social media engagement and conversion or sale. You may, for example, tweet a “decision” link which leads a customer straight to a product or services page to make an immediate commitment. You might post a video that does the same. In this case, you can follow a direct line from platform and method of engagement to a sale. By totaling these, minus costs, you can see whether you are hitting your target CPA.


Indirect ROI


But most of your interactions will not be direct. How do you calculate the monetary value of being retweeted, for example? How do shares, comments, follows, and other interactions translate into sales?


Awareness over time

This is where it gets a little trickier, but over time, it’s not impossible to gauge.


Visit your goals. What are your top one or two marketing priorities right now? This might include a new service you’re hoping to sell or a new or underdeveloped branch of your company you want to promote. You might want to rebrand or build brand awareness. You may want to earn prospect trust, gain industry attention, or expand community networks. Different goals will render different strategies, and each strategy will engage a different percentage of energy toward particular platforms and gaining particular kinds of attention. The point is, an ROI calculation works when you know where you want to go, and thus, which platforms, outreach, and types of response are going to give you the data you need.



As you post targeted material, engage analytics tools. Some are offered directly by Google and Facebook but consider engaging a third-party service. An analytics partner can use the most current tools and trends to help you track how many times targeted posts lead to clicks, shares, and likes. They can tell you how many people view your content and for how long, and if and how any of these interactions increase traffic, deepen online engagement, or lead to direct sales. But most importantly, they can assist you in interpretation over time, adjust tactics, and measure alignment with multiple goals.



Apart from direct sales, you cannot calculate an exact post-to-revenue ratio, but you can track whether your efforts are “moving the needle.” If your current marketing goals met, ultimately, this translates to a growing business, whether this means you see more direct flow toward your website’s contact page, or you’re building reputation through colleague and client comments and shares. But to broadly analyze short-term results, if you find an increase in social media traffic alongside an increase in revenue, you have good reason to believe your strategy is working.


Over time, however, it’s important to develop an eye for the data flow, so that you can predict which kinds of posts will lead to which kinds of engagements, which will lead to particular commitments. At this point — and sooner with a professional partner — you can start to align more precise CPAs with each type of communications effort and move your ROI from “It appears to be working” to a monetary value.


When you’re ready to partner with an expert in analytics and business solutions, Range, a Deluxe company, works alongside your team to craft a social media strategy poised to yield your ideal ROI. We’re ready for you. Call today to inquire.