What's Social Media ROI?
ROI (Return on Investment) = Are you making more money from social media than you're spending on it?
Spend $100, make $400 = Good ROI! 🎉 Spend $100, make $50 = Bad ROI 😢
🤔 Quick Knowledge Check
If you spend $200 on social media marketing and make $800 in sales, what's your ROI?
Why You Need to Track ROI
Show your boss it works
Prove social media isn't just for fun - it's making real money for your business.
Spend money wisely
Stop wasting cash on things that don't work. Double down on what brings customers.
See what works best
Compare social media to email, ads, and other marketing to see what gives the best bang for your buck.
How to Calculate Your ROI (It's Easy!)
The Simple Formula
(Money Made - Money Spent) ÷ Money Spent × 100 = ROI %
Real Example:
- You spent: $500 on tools and time
- You made: $2,000 from social sales
- Your ROI: ($2,000 - $500) ÷ $500 × 100 = 300% ROI!
That means for every $1 you spent, you made $3 back!
What to Count as Costs
| Cost Type | Examples | Monthly Average |
|---|---|---|
| Tools | SocialRails, Canva, etc. | $50-200 |
| Ads | Facebook, Instagram ads | $100-500 |
| Your Time | 5 hours/week @ $40/hr | $800 |
| Content | Photos, videos, graphics | $100-300 |
What Counts as "Making Money" from Social?
Platform-specific ROI tracking
Instagram ROI tracking
Link clicks to your website from bio and Stories Product tags and shopping feature conversions Story highlights driving ongoing traffic Direct messages converting to sales calls or consultations
LinkedIn ROI tracking
B2B lead generation from professional connections Partnership opportunities from networking Thought leadership leading to speaking engagements or consulting Employee recruitment and company reputation
Facebook ROI tracking
Local business traffic from Facebook posts and events Community building reducing customer service costs Referral traffic to your website from shared content Event attendance and local engagement
Quick ROI measurement methods
Use UTM tracking codes
Add tracking codes to all social media links:
yourwebsite.com/landing-page?utm_source=instagram&utm_campaign=product_launch
This shows exactly which social posts drive website traffic and conversions.
🤔 Quick Knowledge Check
What's the most important thing to track when measuring social media ROI?
Set up conversion tracking
Google Analytics Goals, track newsletter signups, contact form submissions, purchases
Facebook Pixel, track actions people take on your website after seeing your Facebook/Instagram content
LinkedIn Insight Tag, measure B2B lead generation and website conversions
Simple monthly tracking spreadsheet
Column 1: Month Column 2: Social media costs (tools + time) Column 3: Leads generated from social media Column 4: Revenue from social media leads Column 5: ROI calculation
ROI benchmarks by business type
E-commerce businesses
Good ROI: 200-400% Average conversion rate: 2-3% from social traffic Focus on: Product showcases, customer reviews, shopping features
Service businesses
Good ROI: 300-500% Average lead value: $500-5,000 depending on service Focus on: Case studies, testimonials, educational content
B2B companies
Good ROI: 100-300% (longer sales cycles) Average lead value: $1,000-50,000+ depending on industry Focus on: Thought leadership, industry insights, networking
Improving your social media ROI
Focus on high-value activities
Create evergreen content that continues driving traffic months after posting
Build email lists from social media followers for ongoing marketing
Develop customer relationships that lead to repeat business and referrals
Reduce costs without reducing results
Use scheduling tools like SocialRails to save time on manual posting
Repurpose content across multiple platforms instead of creating everything from scratch
Automate routine tasks while maintaining authentic engagement
Test and optimize regularly
A/B test different content types to see what drives the most valuable actions
Track which platforms generate the highest ROI for your specific business
Optimize posting times based on when your audience takes action, not just when they're online
Common ROI measurement mistakes
Only tracking vanity metrics
Likes and followers don't directly correlate to business value. Focus on metrics that lead to revenue.
Not assigning value to leads
If you don't know what a lead is worth, you can't calculate accurate ROI. Estimate based on your typical conversion rates.
Ignoring long-term value
Social media often influences customers over months, not days. Consider the full customer journey.
Not tracking time investment
Your time has value. Include it in ROI calculations to get accurate measurements.
Social media ROI with SocialRails
SocialRails helps improve your ROI by:
Saving time, Automated scheduling and AI content creation reduce manual work
Consistent posting, Auto-recurring posts maintain presence without ongoing effort
Cross-platform efficiency, Manage 9 platforms from one dashboard
Performance tracking, Built-in analytics show which content drives the best results
Cost efficiency, Starting at $16/month vs. hiring social media managers or multiple tools
Quick ROI improvement checklist
✅ Set up proper tracking with UTM codes and conversion pixels
✅ Calculate your true costs including time investment
✅ Focus on high-value content that drives leads and sales
✅ Use automation to reduce time costs
✅ Track performance monthly and adjust strategy based on results
✅ Document success stories to show stakeholders concrete ROI