KPI analysis

Driving sales, increasing brand awareness, and attracting targeted audiences are just some of the drivers for companies to have a presence on social media. Of course, you may think that the content you see on your favorite company’s Facebook profile is funny or even totally irrelevant to their services. But have you ever taken a closer look and noticed all those CTA buttons and other lead and conversion tools that have a much deeper purpose and meaning for that company? It is all about generating revenue. In the end, if businesses want to succeed, they must make profits. That is what makes them grow quickly. If you run a business yourself and wish to increase your revenue from social media, you must measure and analyze. ‘What should I measure and analyze?’ you may ask. The answer is Key Performance Indicators (KPIs).

KPI – Definition & Types

KPI stands for Key Performance Indicator and it is basically a type of measurement of success. KPIs allow companies to evaluate their results in terms of particular activities such as product performance, increasing brand awareness, driving conversions, and so on.

There are various types of KPIs that companies can and, in fact, should  track: 

• Quantitative KPIs are measurements such as those of time, money, and weight; pure numbers 
• Qualitative KPIs include opinions, characteristics and traits of (typically) processes and business decisions 
• Leading KPIs are used to evaluate the effects of a change in processes and confirm long-term trends
• Lagging KPIs indicate success or failure of a project at the end of a certain period of time
• Input KPIs allow companies to monitor resources used in a business process, such as work time or equipment
• Process KPIs are designed to help organizations assess the efficiency of their processes and implement helpful changes, and are used very often with customer support tickets
• Output KPIs are the most commonly used type of KPIs to measure the success or failure of a business activity, and examples include profit or customer acquisition rate
• Practical KPIs look at the current actions of a company and analyze their impact
• Directional KPIs assist companies in assessing specific trends within their companies
• Actionable KPIs help establish a company’s level of commitment and effectiveness at implementing changes
• Financial KPIs concern economic stability, growth, and business viability, with  examples including gross profit, asset rations, and net profit, etc.

Reach KPIs

Reach KPIs measure how many users come across your social channels. These users might only interact with the channel passively — reach and engagement are two different things. Think of reach as a quantity measurement — reach data demonstrates your existing and potential audience, growth over time and brand awareness.

Impressions

This is the number of times your post was visible in someone’s feed or timeline. This doesn’t necessarily mean the person who viewed the post noticed it or read it.

Follower count

The number of followers your social channel has at a set time.

Audience growth rate

You want to make sure you’re gaining followers, not losing them. Audience growth rate demonstrates how follower count is changing over time. Here’s a simple formula for tracking it:

Reach

This is how many people have seen a post since it went live. Reach changes depending on when your audience is online and how good your content is. It gives you an idea of what your audience finds valuable and interesting. Here’s how to calculate it:

Potential reach

This measures the number of people who could see a post during a reporting period. Put another way, if one of your followers shared your post with their network, between 2% and 5% of their followers would factor into the post’s potential reach. Here’s how to calculate potential reach:

Social share of voice

This metric tracks how many people mentioned your brand, compared to the number of people mentioning your competitors. Simply, it shows how relevant your brand is within your industry. Here’s how to calculate social share of voice:

User Lifetime Value 

Sometimes also called Customer Lifetime Value (CLV or CLTV), this is a metric that indicates the total revenue a company can possibly expect to earn from a single customer throughout their whole business relationship together. In other words, it is the net profit contribution of a customer over their lifetime to a specific firm. Knowing your user lifetime value allows you to find the right balance when it comes to short-term and long-term marketing objectives for your business. By tracking this metric, you can also develop a better understanding of the financial return on your investments in social media marketing. 

Customer Acquisition Cost

Every time you launch campaigns, you should look at social media metrics like audience reach, impressions, click-throughs, likes, shares, comments, and more. However, when focusing on generating revenue from your social media campaigns, what you should specifically pay attention to is how much money you have to spend in order to convert someone from your target audience on social media into a new customer. To calculate this, you need to divide the total amount of money spent on acquiring new customers (social media marketing campaign expenses) by the number of new customers acquired during a particular period the money was spent on. Knowing the value of this metric will allow you to establish whether or not your campaign was worth spending money on and how many new customers you can expect to acquire in the future from social media if you spend a particular amount of money on advertising. 

How to track social media KPIs

Now that you know the important social media KPIs to track, how will you go about tracking them and reporting your successes? There are a few ways:

Native solutions

Tracking social media KPIs natively — meaning, using the built-in analytics features of individual social media platforms — is one option. They’re free, easy to use and can be a good option for social media managers who are only tracking KPIs for one or two social accounts. Social media managers can track KPIs using Instagram Insights, Facebook Insights, Twitter Analytics, LinkedIn Analytics, YouTube Analytics, etc. All major social media platforms offer basic solutions for tracking social media performance. However, this method is not ideal for teams who manage several accounts across social networks. That’s simply because tracking metrics from different sources requires switching between dashboards, which makes it more challenging to compile, compare and analyze results.

Custom reports

Custom reports involve compiling social media KPIs into a single easy-to-read document for your team and your supervisors. To create one, manually input the data you collected across your brand’s different social channels into one document. Make it visual and digestible. Be sure to include graphs, charts and examples to demonstrate how your work is meeting the brand’s business goals and affecting the bottom line.

Tools

If your brand’s social media strategy involves managing multiple accounts on numerous platforms, using a social media management platform to track your KPIs will make your job easier.