⚫️🟡 How to Calculate the ROI of Social Media

Okay, today’s email is bit longer than usual, but it’s a topic that demands depth: How to calculate the ROI of your efforts on social media.

Now if you’re in a hustle, here’s the TL;DR:

• Not every platform is for everyone – Evaluate if your audience is even there.

• Leading vs. Lagging – Track short-term engagement (leading) while keeping an eye on long-term revenue (lagging).

• Understand Your Sales Cycle – If it’s 8 months, don’t expect overnight sales from a single post.

• Attribution Is King – Even an imperfect system beats guesswork and hand-waving.

• Founder & Investor Demands Are Real – Sometimes you’ll do stuff that looks odd on paper, but you do it to keep the ship sailing.

• Agree on Definitions – Get leadership to co-sign on what success looks like—“likes” are worthless if your CFO doesn’t see how they tie to dollars.

If you prefer video, here’s a 10-minute breakdown.

And if you’re not in a hurry, grab a cup of something and settle in.

Let’s talk about the elephant in the social media room. Three little letters that spark big-time frustration for marketers everywhere: ROI. If you’re tired of side-eye glances from your CEO or CFO when you talk “likes,” “comments,” and “engagement,” keep reading. Because today, we’re unpacking how to finally show the Return on Investment for your social media efforts—so nobody can knock the value you bring to the table.

The ROI Elephant: Why It Matters

Here’s the deal: If we can’t prove how our social media efforts actually bring in revenue, we end up looking like the “Arts & Crafts” team—fun to have around when times are good, but the first heads on the chopping block if the company hits a rough patch.

When leadership sees marketing as a cost center, that’s trouble. But if you can demonstrate you’re a profit center—someone who contributes to the bottom line—you become indispensable.

Not Every Business Needs Social (Wait, What?)

Let’s get one myth out of the way: not every single business needs to be on TikTok, Instagram, YouTube, or fill-in-the-blank social platform. If you manage a property management group, for instance, you might find all your comments turn into public complaint threads rather than helpful leads. It might not be worth the headache.

But for everyone else, social media can be a game-changer—if you know how to tie it to real dollars.

Leading Metrics vs. Lagging Metrics

There are two main categories of metrics we need to distinguish: leading and lagging.

1. Leading Metrics

Leading metrics are the quick hits—the stuff you can see in real time or within a short window:

• Engagement (likes, comments, shares)
  Sure, “likes” don’t pay the bills, but a spike in genuine engagement usually indicates you’re moving in the right direction.

• Micro Conversions
  Did someone download your free guide, sign up for your webinar, or give you their email? That’s a micro-conversion. They didn’t bust out a credit card, but they gave you some kind of contact info. This step is crucial: once you have that info, you can follow up with ads or emails that actually drive revenue.

• Traffic to Your Website
  If social is sending more people to your site—and those people become leads, add items to a cart, or fill out contact forms—you’re seeing early indicators that your content is working.

• Audience Growth & Sentiment
  How many new followers are you getting, and are they actually your target market? Also, are you staying on top of what people say about you online? Because if new folks are rolling in, but everyone’s trashing you on Reddit, that’s not the “growth” you’re looking for.

2. Lagging Metrics

Lagging metrics take time—often weeks, months, or even a year—to reveal themselves. They’re the long game numbers:

• Sales & Revenue
  You might run a campaign today that influences a sale 6 months from now, especially in B2B. If your average sales cycle is half a year, you won’t see immediate conversions the way an eCommerce brand selling $20 items would. That’s normal. Lagging metrics help you connect the dots over time.

• Customer Lifetime Value (LTV)
  Retention is everything. When you keep existing customers happy (and maybe re-target them on social with new offers), you increase their LTV. That’s real money. Answering a frustrated tweet in five minutes can literally mean saving a contract renewal or an upsell opportunity.

• Conversion Rate Over Your Typical Sales Cycle
  Whether your sales cycle is 2 weeks or 2 years, you have to know your timeline. That helps you trace back: “We started doing X on social in January. By August, we closed Z deals.” You can’t claim every single sale was 100% from social, but you can track how social content (organic or paid) contributed to those wins.

The Real-World Hurdles Nobody Likes To Talk About

Founder Ego

Sometimes you’ll have all the data in the world, but your founder or CEO says, “I want a personal video series,” or “I want us on this random platform,” and it doesn’t align with your carefully constructed plan. This is real life. You pivot, you adapt, and you show them how (or if) their request can fit into your strategy—or at least track the results to see if it’s worthwhile.

Investor Demands

Investors might push you to jump on platforms that don’t necessarily move the local needle—say you’re a local moving company and they want you on TikTok. Why? Because that’s where they spend time, and they’re funding the business. Sometimes you have to play ball to keep the lights on, even if the ROI might not be immediate. Just be clear about how you’re tracking results, so you can speak to the data if it ever comes into question.

Building Your Attribution Model

Here’s what separates the “Arts & Crafts” marketers from the real pros: attribution. Even if it’s not perfect, put a model in place to track leads from social media—track things like:

• UTM parameters in links

• Dedicated landing pages

• Pixel tracking for retargeting

• Lead forms and email sign-ups that tag the source (e.g., “Social - Instagram ad”)

Get your executive or department head to agree on what success looks like. If you know a single impression (or email sign-up, or download) is worth a certain potential dollar amount in the long run, define that in writing. That way, you’re not guessing when someone asks, “So how much is that brand awareness really worth?”

Don’t Wait Until the End of the Year

The biggest mistake is letting months roll by, building a big bag of “engagement data” without context. Then, at the end of the year, the CEO asks, “What’s all this done for us?” and you’ve got no direct line to revenue or conversions.

Instead, run monthly or quarterly check-ins:

1. Look at your leading metrics—traffic, micro-conversions, engagement.

2. Compare them to your lagging metrics—actual deals closed, retention rates, lifetime value changes.

3. Adjust your strategy if you’re not seeing correlation or incremental changes.

By the time the year wraps up, you won’t be scrambling—you’ll have a story arc that connects social media efforts to real business outcomes.

Hope that helps!

Until next week,
Jordan

P.S. If you want more, check out my YouTube channel where I go deep into marketing topics every week.

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