Do you measure social media return on investment (ROI) for your company? Marketers tend to track ROI for every other channel of online marketing including email, search, and ad marketing. But for some reason, many seem to cringe when it comes to channels like Facebook and Twitter. Realizing that his company needed to understand exactly what the value of each social media connection is to their bottom line, Dan Zarella developed the value of a Facebook like (VOAL) formula:
L (Total Likes): The total number of audience members connected to your social media account. On Facebook, these are Likes of your page, and on Twitter, these are followers.
UpM (Unlikes-per-Month): The average number of fans who "unlike" your social network account each month. On Facebook, this is an "unlike," and on Twitter, this is an "unfollow."
LpD (Links-per-Day): The average number of times you're posting links, and potentially converting links driven from your social media account. On Facebook, this is the number of posts you're making, per day, that lead to a page on your website. On Twitter, this is the number of times, per day, you're Tweeting these kinds of links.
C (Average Clicks): The average number of clicks on the links to your site you're posting on your social media accounts.
CR (Conversion Rate): The average conversion rate of your website, from visit to sale or visit to lead. This can be an overall average, but for increased accuracy, use the conversion rate measured from traffic coming from the social network you're calculating.
ACV (Average Conversion Value): The average value of each "conversion." In this context, a "conversion" is the action you've used to measure CR for. It could be average sale price or average lead value. For increased accuracy, use the average conversion value of traffic coming from the specific social network.
The first part of the formula uses UpM and L to calculate a chum rate for your social media following. This will allow you to derive the average length of time an individual user will be subscribed to your social network profile.
The rest of the formula calculates the VOAL metric for each follower using the number of links they're exposed to over the length of time they follow your brand and the values from your conversion funnel.
If this all looks a little daunting to you, don't worry, there is an easy calculator tool that will calculate this for you.