Is it possible to generate a return on investment from social media? Chances are if you're reading this post, you've asked that question once or twice before.
The short answer is: Yes. Of course, you can. Given the right systems are in place, you can track the ROI of almost any action. Since social media is an incredible place to build a fanbase and increase followers, many dealers wonder if their social media efforts are paying off.
But wondering if your efforts are paying off won't help. You need to be able to prove it, especially if someone higher up than you at the dealership is wanting answers.
In this post, we're going to explore some ways to track the ROI of social media for your dealership using tools you already have at your fingertips.
Before we dig in, it's important to remember one thing. Though ROI is an acronym that gets tossed around in almost every conversation, it means nothing if there isn't a clear objective to measure.
Most dealerships struggle to create clearly defined objectives for their marketing efforts. In that atmosphere, ROI is impossible to track. How would you even know which way is up without a reference point?
Marketing done right means that you start with a clearly defined objective. It should be as accurate as possible so that you're not leaving holes in your strategy and measurements.
In other words, don't set yourself up to fail by not knowing what you want to achieve. And don't just say 'leads and sales,' either. You'll need to be more specific than that!
What type of leads do you want? New car? Used Car? Finance? Service? Until you know exactly what you'll be measuring yourself by, you're not ready for the ROI conversation.
A clear goal/objective gives you something to reverse engineer. Like any goal, it's important to understand what steps you will need to take to get from where you are to where you want to go.
What steps will your customer need to take to achieve your objective?
When 'Results' Aren't Easily Quantified
It should be no secret that automotive retail doesn't have the immediate fulfillment of a transaction like other industries do. The consumer's path to purchase ranges from 30 - 90 days with between 24 - 900 (that's right, 900!) different touch-points considered.
When results aren't easily quantified, you'll have to rely on a variety of data sets to help you understand the consumer's path to purchase. By analyzing data, you'll be able to see if the customer is following the course that you've intended them to take. At a base level, you should be able to see whether or not your social media efforts are capable of bearing fruit.
Again, for this to work properly, you'll need to have a clearly defined objective and chart out the steps that they'll need to take along the way. Those steps lead to the overall goal and create a marketing funnel.
In this example, you can see that the Facebook Ad promoting a $19.99 oil change directs the user to a Landing Page on your website where they can get more information about the offer. The landing page also includes a call-to-action where the user can claim the offer. Once claimed, the user redirects to a thank you page on your website which includes other options of things they might be interested in learning about.
Let's simplify everything I just wrote there:
1.) Facebook ad promoting $19.99 oil change (or whatever your offer is)
2.) User clicks on ad and lands on a Landing Page on your website.
3.) User clicks the CTA (call-to-action) on your site to claim the offer and clicks "submit."
4.) This redirects the user to a "Thank you" page on your website
Keep this funnel clear in your mind because we're going to refer to it throughout the rest of this post.
These non-financial reference points can help tell the story of each users' behavior. Can you see how these actions lead through to a financial outcome?
Consider Your Cost to Gain Ratio
Once you have a marketing strategy, objective, and funnel created it's important to factor in your hard costs. These might include:
- Time / Labor
- 3rd party agencies
- Paid media
Are you keeping tabs on everything that is going into making social media work for you? It's important to set aside some time to conduct an audit of everything you have going on, measuring it against your core objective.
Until then, you won't have a clear picture of what's working and what's not working, and that may cause you to take missteps that muddy up your social media efforts further.
Tracking Leads and Revenue
Tracking leads specific to your social media efforts can be done. To do it effectively, though, you'll need to know how to set up goals within Google Analytics.
Once you've correctly created goals in Google Analytics, you'll be able to track what traffic either completes or abandons the steps in your funnel.
Watch this quick tutorial on how to create goals in Google Analytics.
Referencing the simple funnel we talked about earlier, here are some things that you should track:
1.) How many visits to the landing page originated from Facebook
2.) What percentage of users clicked on the call-to-action
3.) What percentage of users opted-in and landed on the "Thank You" page?
The number of users that arrive at your "Thank You" page should align with the number of leads that you're tracking through your website provider or CRM.
Again, all of this is dependant on whether or not you've clearly defined an objective. In this case, it's the "Thank You" page because that means they submitted a lead (or opted-in to claim your offer).
Tracking goals and conversions is one of the leading reasons many dealers are tracking an ROI from their social media efforts. They either aren't setting up their funnel correctly, creating the right goals, or aren't doing any of those things at all.
Don't Discredit Vanity Metrics
There has been a lot of chatter out there about the irrelevancy of vanity metrics such as +1's, Likes, Retweets, or followers but it depends on what you're aiming to achieve.
Mike Davenport is a rock star when it comes to leveraging social media. Not only has he worked deals on Facebook directly, he recognizes that there is more to vanity metrics than meets the eye. That's not to suggest that there is a shotgun approach to success, but vanity metrics can give you an indication of the approval level of your following.
For example, if you're posting regularly to Facebook (non-paid, organic) and aren't getting any level of engagement whether vanity or not, that would serve as a simple indication that what you're posting is of little interest to your audience.
With that in mind, a good goal for you to achieve is focusing on the quality of what you're posting to see if you can find the sweet spot of information/topics that resonate with your ideal audience.
Doing so is less expensive than going 'all in' on paid advertising, especially if you're having trouble getting to know your target audience' interests and problems.
Marketing (whether on social media or some other medium) is about conveying the right message to the right person at the right time. Though very simple, vanity metrics can help you understand how aware people are of your brand. This is especially important if brand awareness or an increase in followers is a step in your path to acquisition.
Make Adjustments as Needed
Never, and I mean NEVER EVER set and forget! This is something that might be costing you more money than you think!
It's not enough to just set things up once and hope that they keep working. Your job moving forward is to monitor what's happening. Are people engaging with your offer and funnel? Are they following through?
As you keep a close eye on consumer movements through the funnel, you'll be able to make some calculated adjustments that will get rid of what's not working to make everything work more efficiently.
Can you measure ROI from Social Media? Of course, you can. While there is more to it than just posting regularly or creating some ads, social media is a powerful resource to build brand awareness and acquire new customers. We can help you understand what to measure and what doesn't matter - let's chat!