Facebook ROI for Business Explained


Have you been using Facebook for your business but are unsure if its providing any real return on investment?

Are you thinking of starting to use Facebook for your business?

For any business, return on investment (ROI) is the deciding factor in whether they will execute a specific marketing tactic – and Facebook is no different.

The Problem with Facebook ROI for Businesses

The problem with Facebook though is that its ROI is a different beast than that of traditional online marketing like Google Adwords. The ROI from Adwords is easy to determine because you can see the direct revenue generated from each click. Facebook can provide such direct returns, through its Ads platform, but it also gives you returns such as leads, traffic and customer testimonials at fractions of the cost.

In this article I’ll explain the top 5 types of Facebook ROI for businesses, why they’re valuable, how you can get them and how you can track them.

Facebook ROI for Businesses #1 Fans Sharing with Friends

This occurs when one of your fans shares, comments on or Likes on of your Facebook Posts. These interactions show up in their friends News Feeds and not only introduce your business to them, but includes a social recommendation from their friend.

Here is an example from my own News Feed from one of my friends:


This is far more powerful than a simple ad. Why? Because people care about what their friends think and do, not what a business wants to sell them. If a person’s friend is talking about an experience that involves your business, it’s a story with personal interest.

Compare the above example to Ad below. Which do you think I’m more likely to click on?


According to a recent Forrester Research report, “70% of US online adults trust brand or product recommendations from friends and family”. That same report indicated that 46% trust online reviews written by customers, but only 10% trust online ads and company written text messages.

Don’t beg for shares though. In a recent article, The Five Most Common Facebook Posts Mistakes, I wrote that asking people to share your Facebook posts is a big no-no. This sounds like begging and will turn most people off. You need to provide some form of incentive or interest to propel people to engage with you. Liking and sharing can be the mechanisms that people are told to use to engage with you, but it has to be done in a way that is fun or useful.

Here are two Facebook posts, made right after each other, from Walmart showing both the right and wrong ways to drive Likes and shares from Facebook posts. The post on the left is asking people to share the Facebook post to tell their friends about a sale happening at Walmart. This can be taken as basically asking you to spam your friends. And it provides no interest or value for the person sharing. The post on the right is done correctly. It’s giving people a venue to express their opinion on how they like their steak cooked, which for some people is a part of who they are! As you can see its getting much more engagement:


How do you track shares by your Fans?

Facebook’s new Page Insights makes it super easy to see how many shares each of your posts is getting and which are the most popular. Check out a piece from Wishpond’s Insights below. The orange bar represents “Reach”, the purple represents “Clicks” and the red “Shares”:


Facebook ROI for Businesses #2 Referral Traffic to your Website

People are turning to sites like Pinterest more and more to engage in “Social Shopping Sessions”. Instead of going to comparison shopping sites

Rich Revelance recently analyzed 15 billion shopping sessions between December 2012 and April 2013 to see how social media affects purchases.

Take a look at the infographic to see Facebook and Pinterest’s effect on ecommerce sales:


How do you use Facebook to drive Referral Traffic to your Website?

The best way to do this is to create posts that tell a story about your products or how people can use them. If you just post about your new product line or what’s on sale, nobody will care. Those are not interesting posts. But if you give them some advice on how to solve a problem or how to improve their life, then they will listen.

Here are a couple types of Facebook Posts you can use to drive referral Traffic to your website:

Give a Preview with a “See the whole thing: [Link]” Call-to-action

This type of Facebook post is meant to tug on a person’s curiosity. It makes them want click a link to see or read something that are getting just a small preview of in the post itself.

This type of post includes two things:

  1. A photo that shows a small piece of a larger, more intricate object. This can include a location, a product, an outfit, or even a piece of content.
  2. A short description of what the photo shows and a call-to-action to see the rest of it.

Lowe’s Home Improvement does a great job using this formula to promote a bathroom makeover.


Posts like these that provide real-world ideas for doing cool things are perfect. And people are always interested in seeing a makeover. Before-and-after photos have big impact on people’s minds because they show what is possible in a believable way. A photo of a beautiful kitchen is nice, but if you add a photo of how the kitchen looked before, it can spark new ideas in your Fans’ minds on how they can do a makeover of their own.

“Learn how to [Do Something]: [LINK]”

One of the reasons Pinterest is so popular is that it is an idea machine: It gives people tons of ideas and examples on new and interesting ways to do things. Making your Page a source for cool new activities and tips for things that are relevant to your target audience is the best way to create lasting engagement with your Fans.

Walmart made a killer post recently with a link to a guide on growing your own salsa. Many people in their target audience (families) have gardens at home, but probably never thought to grow the ingredients necessary to make their own salsa. This will provide them with a new activity they never thought of trying before.

Check out the post:


One added ingredient to boost this formula is to tell people they can learn how to do something just like real-world examples. This builds a trust factor into your material that will drive a lot more clicks from skeptics. Etsy did this perfectly by showcasing a real person who successfully started an Etsy Store to drive clicks to a helpful article:


How do you track Referral Traffic from Facebook to your Website?

Google Analytics makes it easy – and you don’t even need to use special parameters and Google Analytics tracks traffic from Facebook, Twitter and other social networking sites automatically via its Social Reports tool.

If you want to get more in-depth to see which posts are driving the most referral traffic, the easiest way is to use Facebook’s new Page Insights (which are awesome IMHO).

It allows you to see which posts are getting the most clicks:


And then dig deeper to see how exactly people are interacting with your posts and clicking:


Facebook ROI for Businesses #3 Sales Leads

Facebook contests are an easy way to generate new sales leads for your business. By providing even a small prize, such as a $25 gift card to your store, you can collect hundreds of leads who are interested in your products.

The prize is the most important piece of your contest. It’s what entices people to enter. Make the prize something relevant to your business.

A great prize is a gift card for your business. Why? Two reasons:

  1. A gift card is enticing to all of your potential customers – it’s the prize that is the most enticing to the largest group of people. If you give away a certain product or service, you will only get entries from people interested in that specific product. With a gift card though, you will attract entries from those who are interested in the products you sell.

  2. It will only attract people who are interested in your products, which is what you want! If you give away an ipad you will get a ton of entries, but those people will only be interested in ipads, not your products. This will make it almost impossible to convert these users into actual sales for your business. Giving away a gift card ensures that entrants have an interest in your products, which makes it easy to convert them into sales.

How does a Facebook contest get me leads?

Every person who enters your Facebook contest gives you their email and contact details, making them a new lead to sell to. To maximize new emails and leads you need to maximize entries. You can do this by making the barrier to entry as low as possible. Do this by asking only for an email in order to enter. Minimizing your entry form to just one field will make it as fast and easy as possible to enter, maximizing your entry rate.

How do you convert Facebook contest leads to sales?

If you followed my advice above (RE: Choosing an in-store gift card as your prize) this will be easy!

The best way to convert these leads into sales is to send them a follow-up email immediately after they enter your contest with a coupon or promotion to entice them to visit your website or store. At that moment they will be most interested in your business, as they just interacted with you. Providing a small coupon will give them the incentive to visit NOW, especially if they are first-time customers.

Wishpond’s Facebook Contest Apps give you the ability to send automatic follow-up emails to entrants. Learn more at https://www.wishpond.com.

Facebook ROI for Businesses #4 Understanding Your Customers

Facebook has created an unprecedented repository of information about people. And for you, as a business, this gives you the opportunity to understand who your customers are and optimize your marketing, and product line, to boost sales.

How do you use Facebook to understand your customers?

There are two ways to do this:

1. Facebook Page Insights

Facebook Page Insights allows you to see the gender, age, language and location breakdown of your Fans. You can access this information by going to the People tab in your Page Insights:


2. Facebook Contests that Utilize Facebook’s Open Graph

Facebook Contest Apps, like Wishpond’s, allow you to mine even more data through Facebook’s Open Graph. The most important data is user’s interests. This allows you to see other Pages, People, movies, etc. that they like on Facebook.

How do you use this information to optimize your marketing and product line?

This information will allow you to create targeted Facebook content that resonates with them. If you see they like certain movies, sports teams or celebrities, you can write posts about them, weaving in your own products or business, that they’ll be interested in.

If you know what types of activities your Fans are interested in, you can add products to your product line that can be used in those activities or in similar ones. You can even change the value propositions of your products on your website or in-store to show how they can be utilized for those activities.

Facebook ROI for Business #5 Sales

Facebook’s Ads products give you the ability to drive people to your website through paid clicks. This is the same format as Google Adwords, but there is one major difference: Google Adwords are intent-based, meaning a person only sees an ad when they search for a specific related keyword. This means they have an intent to find that thing and possibly buy it. Facebook Ads do not have that intent though, so they must be used a bit differently.

How do you use Facebook Ads to Drive Sales?

You cannot target ads to people at the exact time they are looking for it, so you need to provide an incentive to get people to click. The best type of incentive to drive a direct sale is a coupon or limited-time promotion. Give them a reason to click NOW. If you don’t they will see the ad, have no real reason to click because they are not thinking about buying your products right now, and ignore it.

Once you have created an Ad with a great incentive to click, you need a great landing page to send them to. A landing page is a page on your website with a clear value proposition and call-to-action. If your ad included a coupon, send them to a page that includes the coupon code and a call-to-action to products on your website on which they can use the coupon. Make it as easy as possible to understand how to use the coupon and where to go next to use it.


Facebook is still relatively new for businesses. As such, most don’t know the best practices for how to use it and end up abandoning it after seeing poor results. But like any business tool, it has the potential to help your business, you just need to set your expectations of what you’ll get out of it.

If used properly, Facebook can be a catalyst for your business. Businesses like Nasty Gal have proven that when used effectively, social networks can lead to explosive growth. Check out our infographic on Nasty Gal to see how they have use social networks to achieve over 500% every year since its inception in 2006.

Written by Nick Steeves

Learn how to run a Facebook Contest


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