Return on Investment (ROI) is the most significant and deciding parameter while executing a marketing strategy for any business. Businesses using Facebook for advertising can feel unsure if its providing any real return on investment.
Determining ROI while using conventional online marketing like Google Adwords is easy to gauge and quantify, as here you can see the direct revenue generated by each click. While Facebook also provides such direct returns through its Ads platform, it also gives its users benefits such as leads, traffic and endorsements for no significant cost. Businesses must allow for the fact that financial benefits of Facebook Ad campaigns may not always be well defined. You are building long term relationships with your audience, who can be potential future buyers.
#1 Facebook ROI from Fans sharing with Friends
When a Fan Likes, Shares or Comments on your Facebook Posts, it generates ROI for your business. When your posts show up on your Friend’s News Feed, it not only introduces your business to their friends, but also includes a social recommendation from their friend, which is just about as powerful as your traditional word-of-mouth.
People care about what their friends think and do. If a person’s friend is talking about a product/ brand/ experience generated by your business, you stand to gain by the personal interest it creates among prospective customers.
A research conducted by Forrester Research about online brand building is suggested in the graphic below.
While this holds well, businesses must steer clear of using the wrong ways to drive Likes and Shares. Asking people to share the Facebook post to tell them about your business can be considered as spamming. This will generate no interest or value for your product or service.
Tracking Shares by Fans
Facebook has a feature called Page Insights that clearly shows the number of shares each post of yours is getting. This way you can easily know what kind of posts are more popular and what generate lesser engagement.
Image Source: Google Images
#2 Facebook ROI from Referral Traffic
Social referrals, which include links shared on various social media networks is a huge source of traffic for your Facebook newsfeed. For a long time, Google was a major source of referral traffic, but Facebook has clearly taken over from Google here over the last few years. Recent research shows Facebook accountable for roughly 43% of traffic to its network of social media sites. Referrals work best when people are routed to a landing page where they can get the most relevant information to your Facebook post.
Using Google Analytics to track Referral Traffic
Google Analytics is a simple and highly effective way to track referral traffic from Facebook to your website. Via its Social Reports tool, Google Analytics tracks traffic from Facebook, Instagram, Twitter and all other social media sites. Facebook also has a feature called Page Insights, which will give you further details on the posts that are driving the most referral traffic. This way you can see which posts are getting most clicks.
Image Source: Google Images
#3 Facebook ROI through Sales Leads
Engaging fans in Facebook Contests is a proven way of generating sales leads for your business. Offering Discount Coupons, Gift Vouchers and other such attractions are an excellent way to entice potential customers to try your products/ services. Contests like these can attract tons of entries and people can get interested in your brand. This way you may be spending on giving away one smart phone to a winner of the contest, while generating interest in your brand from thousands of fans who have taken part in the contest, out of which 10-25% are statistically proven to convert into buyers.
What is more, with every person entering your Facebook Contest and providing their email and contact details, you now have a database of leads to sell to. The trick here is to minimise the details you ask for in the entry form and maximise your entry rate. Do not put off people who want to enter the contest with elaborate entry forms and excessive details.
The best way to convert the leads who have entered your contest into sales is to respond to their entries immediately with a voucher or a coupon and entice them to visit your store (physical or virtual). First-time customers will especially be interested in your products, if you give them the incentive to visit NOW.
#4 Facebook ROI by Understanding your Customer
Facebook has a potential repository of unparalleled information of all its users. Businesses can use this information to understand your customers and customize your approach and optimise your marketing effort so as to boost your sales.
Image Source: Google Images
This kind of information will all businesses to create tailored content that resonates with potential customers’ needs and requirements, thus improving conversion rate of advertising and improving ROI.
Conclusion
Social networks like Facebook have the potential to help your business and lead to explosive growth, if used properly. Businesses have risen to the potential ROI that Facebook Advertising can generate when used effectively. Share your ROI experience here with us!
