Do you know how much it costs your company to acquire a social media follower? In this post we’ll share a simple formula to calculate cost.
Social media followers represent potential customers, but in our rush to build up our followings, few marketers take the time to understand their ROI. By measuring the customer acquisition cost from social media and comparing it to other channels, you’ll be able to determine how best to allocate your resources.
If you participate in a tradeshow, sponsor a workshop, or run an advertisement, you probably track how many leads that activity netted, and you’re likely to consider the acquisition cost of those new leads before participating in that channel again. Social media is no different, but we find many companies fail to track how much it costs to acquire new leads using this channel.
Yes, we know how easy it is to lose an entire morning retweeting, favoriting, liking and sharing. But, being active on social media is important in terms of staying up-to-date in your industry and in-touch with your contacts. In this post, we’re going to assume you’re already socially active, so we’re not capturing the cost of your time “socializing” in our calculations.
We’ve identified 3 variables (content generation, scheduling and promoting) that represent additional actions that may be taken to grow a social media following. Increasing any one of these variables may have a positive impact on growing your followers, but will also take more resources. We suggest that you experiment with adjusting these 3 variables, until you find the right balance that results in the highest number of quality followers for the lowest acquisition cost for your company.
Let’s take a look at these variables in more detail, using Twitter as an example:
- Content Generation: Track the amount of time spent creating a month’s worth of branded and non-branded tweets.
- Scheduling: Track the amount of time spent scheduling those tweets. We like Buffer and Hootsuite, to batch schedule posts, so tracking this time is pretty straightforward.
- Promotion: Twitter Ad Campaigns offers options for growing your following by promoting your profile or your tweets. Alternately, you can do you own promotion by searching for Tweeps most likely to value your content. We use a method described by Neil Patel (@neilpatel) of Quicksprout and search for and follow 20-50 profiles each day (Followerwonk and TweetAdder are both great for searching profiles), and then at the end of the week we unfollow anyone that did not follow us back.
Cost of Acquisition = (Content Generation Cost + Scheduling Cost + Promotion Cost) / Net New Followers
We recently completed this calculation for periscopeUP, and determined our cost of acquisition to range from $0.91-$1.00 per new Twitter follower. This compares favorably to other channels we use to acquire customers, but we wondered if we had the right balance of the 3 variables.
We were curious to see if our method of manually following and unfollowing people was more expensive than just running a Twitter Ad Campaign to attract new followers. We found that our cost of acquisition more than doubled when we paid Twitter for followers (see below).
Analysis of cost to acquire followers on Twitter.
The cost of acquisition by social channels is measurable, and there are some basic variables you can adjust to try to reduce that cost. For your own company, the balance of content generation, scheduling and promotion will likely vary quite a bit depending on how well-established your social media presence already is, your industry and how narrow of a user profile you’re trying to attract.
By keeping track of your cost of acquisition, you can better allocate your marketing resources. So, before you spend another minute on social media, do a quick calculation to determine how much it’s really costing you to acquire followers. From there, you can calculate if this cost is resulting in leads or sales, by looking at conversions and assisted conversions from social channels.
By the way, if you’re wondering about the spike in our followers in early April, it coincided with our attendance at SearchLove, the connections we made there and great content we were able to share.
If you have some killer strategies, please share them – we’re always looking for new ideas.
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