If I hear one more so-called marketing expert talk about how to increase social media shares, I might just scream.
It's not that social shares are bad. It's just that social shares should never be the end goal. When it comes to choosing which marketing KPI to track, all roads should lead to a single, all-important goal: revenue.
So long as you are consumed with the goal to increase revenue, everything else will fall into place. You won't make the mistake of thinking that social shares in and of themselves are important. Or brand awareness. Or page views. Or any other "soft" metric a marketer might measure.
Instead, you'll rightly realize that all of those metrics are valuable if and only if they lead your business to increase revenue.
In other words, start with the end in mind.
Let revenue determine which marketing KPIs to track
For example, if your goal is to increase revenue by $500,000 this year, do the math backwards. You'll want to start by calculating a few important metrics:
- Average revenue generated per customer per year
- Average conversion rate of leads to customers
- Average customer acquisition cost per marketing channel
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This information will let you know:
- How many customers you need to add to get to $500,000
- How many leads you'll need to generate to close that many customers
- Which marketing channel will be the most cost-effective route to pursue
(To be fair, we've simplified this here quite a bit. In reality, you'd want to also look at the average conversion rate per channel, so you could determine not only your costs per channel but also your effectiveness per channel. But for the sake of brevity, we'll keep it simple here.)
Let your marketing KPIs set your strategy
Let's say you determine that the average customer generates $10,000 in revenue yearly. This means you'll need to land 50 new customers this year.
Let's also say that you typically convert 2% of leads into customers. This means you'll need to add 2,500 new leads into your pipeline this year in order to land at that magical 50 new customers.
Let's also say that you determine that social media is the most cost-effective channel for you to pursue.
Now we're getting somewhere! We've transitioned from the la-de-da "social media is fantastic because it lets people know about our brand" thinking to the precise and action-oriented "social media is important because it's an effective way for us to generate the leads we need to hit our revenue goals."
See the difference? Things get real very quickly when we know what we're trying to achieve.
The right focus matters
We've now got a great deal of focus.
From here, we can start planning how we're going to leverage social media to generate 2,500 new leads. Because we know exactly what our objective is, we're less likely to resort to blindly throwing something up on a social media account and hoping it works.
We can look at past social media campaigns to see what's given us great results before. We can ask targeted questions about what our target audience likes to engage with. We can start brainstorming creative ways to up the engagement, drive visitors to our website, and transition them from strangers into leads into delighted customers.
By building our entire conversation around revenue, we automatically set up the framework that will help us achieve actual goals. After all, a social share is worthless if it doesn't move the needle, right?
For more insights on measuring marketing ROI, download our ebook, Six Marketing Metrics You Can't Afford to Ignore!