Three Ways to Analyze Social Media ROI

Calculating ROI on Social Media

In order for organizations to see a return on social media, it is important for the business to make a social objective. This way the company has vision and direction in order to get closer to achieving the ROI they are hoping for. The following are several ways an organization can determine whether or not they may see a return on their social media investment.

1.     Reducing Customer Support Calls

Companies may deem it appropriate to invest in social media if they want to drive down the amount of traffic to their call centers. If the business were to set up a company forum, they could answer customer inquiries online, which would be a less expensive method than a call center. To determine ROI, a customer call center must know the average cost per call. In the United States, “the average support call cost is approximately $10 to $25 per call” (Holmboe, 2011).

Example: At a TELUS call center it is on average $15 per call. Now we’ll calculate an average of how many customers call in a day. If last Monday, total calls made were 300, on Tuesday total calls made were 440, and Wednesday total calls made were 290, the average daily calls to the call center is approximately 343.

343(15) = $5145 daily spent on call centers

In order to determine how to decrease this figure, the company can estimate how many people will join the customer support forum and how many will find solutions on the forum. Say they predict 75 customers a day.

75(15) =$1125 saved on preventing calls to the call center

With these cost savings, the company can see the ROI social media can have and begin a test run with their community forum to determine actual results.

2.     Determine how many customers you are reaching

Once a company has set up a Facebook, Twitter, and or blog, the company can see how many people they are reaching through posting a coupon or a deal that will expire quickly. American Apparel calls these flash sales. Through posting a daily deal on a product that most loyal customers of the brand would buy, the company can calculate their ROI on social media.
For St. Patrick’s Day, TELUS wants to give a discount on green accessories. They tweet or post on their Facebook wall the following:

For St. Patrick’s Day, TELUS wants your phone to not miss out on being green. For March 16th and 17th, come into any TELUS store, present this post and receive 30% off any green accessory!

The stores would record the profit made on these green accessories during these two days and compare it to profit made on green accessories on these days made in the last three years. If there is a substantial difference in profit made, there is ROI through social media.

3.     Decreasing costs of market research by providing social platforms for public opinion

Many companies hire focus groups in order to garner insight on consumer’s needs and wants. To drive down the cost of focus groups, organizations can set up a focus group simulation online by asking the questions they would ask the focus group online instead. The company can ask questions through Twitter or Facebook, see the type of helpful responses they get, and put that research into creating or improving their product/service. If they get the same amount of useful responses that they would typically receive in the focus group, the company would save money because they are not paying each individual for their insight. However, they could provide incentives such as coupons or free product to the best responses.

Example: HTC usually asks focus groups how they can improve their products. Say each focus session costs $3000 to put on and they receive 100 helpful insights.

Through social media asks customers (through Twitter, Facebook, blog) how they can improve their latest smartphone. The company receives thousands of replies and sorts through what they think are the highest quality responses. Out of thousands of responses, they receive 100 helpful insights.

Doing this comparison of these two situations can determine ROI through social media. If putting out a post through social media and qualifying results costs significantly less than putting on focus groups, HTC would see the ROI through social media.

Holmboe, D. (2011, October 12). How to Estimate Your Social Media Return on Investment. In Social Media Examiner. Retrieved April 21, 2013, from

Schottmuller, A. (2013, February 21). Social Media ROI: 14 Formulas to Measure Social Media Benefits. In Search Engine Watch. Retrieved April 22, 2013, from


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