Measuring the ROI of B2B Social Media

Any time people start talking about social media for B2B companies, the question always comes up about how do you measure the ROI, or return on investment, of it. There are lots of opinions of the value of this calculation on both sides of the argument. On one side, if you can’t measure the monetary value of what you are doing in either increased sales or reduced cost, it is just not worth doing. And the other side of the argument is that social media is a way of communicating that companies cannot ignore, and measuring the ROI of it is like measuring the ROI of having a telephone. I have even recently heard someone compared it to measuring the ROI of pants.

But no matter which side of the argument you land on, social media marketing is a highly measurable activity, and like other marketing tactics, unless you establish goals of success from the outset, you will never know if you have succeeded. So before we go any further, we must ask the question, are you currently measuring the return on investment of your traditional marketing programs? If not, establish parameters for those measurements before scrutinizing your social media programs, because ultimately you want to measure your social media success as a component of your marketing success. And you need to establish commonalities across all channels.

The following thoughts about measuring social media and its ROI are based on a presentation by Kim Williams that I sat in on at ConvergeSouth this past weekend in Greensboro, North Carolina. While this post is not exactly a summary of his session, the measurement approach comes from his talk.

Each of the following four sections are stacked vertically and shaped like a funnel, with Reach as the largest section at the top, narrowing as it moves down to conversion. This idea matches a sales funnel where the top is total awareness to your message and the bottom is where people take a final action where they become a lead or a sale.

Reach is the largest category and includes your whole audience. This is made up of everyone you have contact with: email subscribers, Twitter followers, Facebook Likers, LinkedIn connections and followers on any other social platform. Track the growth of each one of these numbers. Set goals for how you want these numbers to grow, and pay attention to what makes these numbers grow. These are the easiest numbers to both track and grow, but they also have the least business value.

Engagement is the quantity of the reaction to social media messages. Again, most of this is easy to measure, as it is things like Twitter re-tweets, Facebook wall posts, blog comments, LinkedIn Group comments. This is how people are responding to your content, whether by sharing or adding their own thoughts to the conversation. One way to understand engagement is to test different content, for example tweets, and measure the effect of how it drives traffic or elicits action.

Sentiment is the quality of reaction to the either the content you post online or content others post online about you. These can be positive, neutral or negative. The majority of comments online are neutral, but the negative ones are the most important, as they most likely require action. And while many tools can find and score the sentiment of online comments, this is one measure that requires human intervention to make sure it is correct.

And finally, the bottom of the funnel is the conversion. You need to measure the value of the reaction to the reach. In most B2B environments, this is a lead, but in some instances this could be a sale. Once someone becomes a prospect or a customer, social media has been shown to be very successful at retention of those customers. The measurement of these leads, or sales, must be a part of all marketing efforts so you can properly understand the success rate of social media versus other channels.

Once you have your established metrics for each stage of the social media funnel, you need to develop an equation to measure what each category costs. Since many social media sites are free, companies don’t always think about the time involved as being a real cost. But to truly understand numbers like cost per lead, you must factor in creative time to develop messaging, engagement time, monitoring time, as well as the cost of any paid tools or outside resources required. The total cost divided by the number of leads, or other number that represents conversions, is the cost per lead. As these leads go into the normal sales funnel, and get qualified, you will see the return on your social media investment.

How have you measured the cost and return on your social media investment?


  1. says

    What a nice succinct analysis – a lot of posts fall into the trap of the emotion around the whole subject.

    For anyone who would like to take the conversation further, who happens to be in the UK on October 15, I’d love to invite you to this (free) event:

    If you have any materials that you’d like to share via the site, do feel free to share them via the site, or reach out and I’ll post them there for you.

  2. says


    Thanks for the recap of Kim Williams presentation at ConvergeSouth. I had to exit early to set up for another sessions and this filled out the info I was missing nicely.

  3. says

    There are only two ways measure the ROI of B2B social media:

    1. Direct REVENUE (cash “in” – the most popular)

    2. Operational Efficiency (cash “saved” – a close second)

    IF, you need examples:

    1. Revenue – Sales executive learns how to maximize social media through our services (sorry for the plug) – and then sources a new prospect through existing relationship on LinkedIn. Prospect becomes client and BOOM! Social Media ROI!!

    2. Operational Efficiency: A Recruiter learns how to maximize social media through our services (sorry for the plug AGAIN!) – and then sources a new candidate through existing relationship on LinkedIn. Candidate becomes employee and BOOM!! Social Media ROI happens again!

    In both cases, the employ(ER) can now drop some of the more expensive and traditional tools they have been providing for their employees (i.e. Hoovers, Monster, etc) and BOOM!! Social media ROI!

    Wow – sometimes I can’t believe why people struggle with this.

    Disclaimer: My partner and used to work for LinkedIn so we probably have a better handle on social media ROI than most.

  4. says

    great ideas to measure B2B social media ROI , I reach, engagement, conversion and ROI is easy to understand , but I never measure sentiment before, is there any tool to recommend? in terms of conversion , the leads must be email opt-in or any other form? how about facebook fans who shows the service/product by commenting in the fan page? does it count as lead as well?

  5. Steven Phillips says

    How do you measure ROI if no money ever changes hands? I work for a company that just launched an internal social media add-on to their intranet. Senior leadership wants to measure the success of the launch with some sort of metrics. I can’t figure out how to but a numerical value to an internal social media channel.

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