Every marketing effort must produce high ROI.  Here are five ways to measure profit impacts with social media marketing.

In business today it’s critical to generate measurable returns from your lead generation and customer retention efforts.

It’s quite trendy right now for marketers to talk about social media outlets like LinkedIn, Facebook, Twitter and others as profit producing tools for business.

But do they really produce profits?  How do you know?  After all, social media is all about human interactions and conversations (kind of like a meeting at the Rotary Club).  How do you put numeric quantities around human interactions, something that is critical to determining profitability and ROI?

Here’s five ways we found as effective measurements of social media ROI for most companies:

#1 – Measure website traffic

It’s easy to find out how much website traffic you are receiving from social media outlets.  As long as your website conversion rates remain constant, increased traffic will result in more leads and sales.  You’ll probably notice higher conversion rates on traffic coming from social media sites, as these website visitors are often more engaged than others.

#2 – Measure search engine rankings

Google, Bing and other search engines are now showing social media results on search engine results pages (Google search your name and watch your LinkedIn profile come to the top).  Search engines are indexing and factoring Facebook and other social networks into search results…use social media the right way and you’ll see improvement in your organic search engine rankings.

#3 – Lower costs of marketing to existing customers and prospect base

You can interact directly with customers and prospects through social media channels like Facebook, forums, LinkedIn and others.  That means no direct marketing costs for things like direct mail, flyers, email and collateral to interact with your audiences.  Do it via your social media channels and save.

#4 – Count your inbound links

Inbound links are links from other relevant websites to your website.  Inbound links from relevant sources are the number one thing search engines like Google consider when determining search engine ranking results.  Social media, by getting your message out through multiple channels, allows you to increase the amount of relevant, inbound links to your website.  Count the inbound links to help determine social media marketing impacts.

#5 – Track the number of leads and sales

Everything surrounding your website can be measured, including how traffic comes your website.  Track the number of website visits from social media sources that result in leads and sales.  A free program like Google Analytics will do a great job in providing you this information.  It’s quite simple to calculate ROI when you know the sources responsible for generating leads and sales.