Social Media Success: Measuring Your Return on Investment
Identify your metrics and learn how to gauge success.
While social media continues to grow as a marketing tool, people often struggle to find the most effective ways to use it to generate business. One question facing companies large and small is this: How do you measure social media success? Which data provide the most accurate and effective overview of your online presence? What tools can show whether you are getting the best return on your social media investment?
Identifying Your Metrics
Measuring social media impact isn’t easy, and it is more of an art than a science. There are a number of areas where simple data can’t provide true insight. “The problem with trying to determine return on investment (ROI) for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable,” says Jason Falls, social media expert and founder of Social Media Explorer (www.socialmediaexplorer.com).
Individuals and companies often rely on fan and follower counts to measure social media success. That’s a good place to begin, but it isn’t enough. You need to identify the criteria and metrics that will best help you understand the landscape and your impact on it and on your audiences.
Your approach to measuring social media ROI may be just as important as the measurement itself, says Hal Thomas of BFG Communications. “We often approach social media like it’s the destination rather than the vehicle. You can’t just ask, ‘What’s the ROI of social media?’ ” Thomas said in a post at American Express Open Forum (www.openforum.com). “You have to ask, ‘What’s the ROI of specific activities that we engage in via social media?’ It’s a starting place [and it’s up to you] to take fans and turn them from passive fans to transacting customers.”
The real trick is to avoid worrying about measuring everything and to focus on measuring the right things.
Here are some initial suggestions for measuring your social media footprint and impact:
- Understand how social media fits you or your company. What are your business objectives, and how can social media support them?
- Know what you can measure. Understand what is possible, and remove irrelevant metrics.
- Measure the correlation between social media success and business success—they should grow and improve together.
- Pick the metrics that work best for you. Start with three, and compare and contrast the information they provide and how they fit in with your needs and tactics.
- Get personal feedback from your customers or your team. Real-world examples can sometimes provide a better snapshot of how you’re performing than random data.
Throughout any marketing campaign, it’s important that goals and objectives are top-of-mind to keep your efforts on track. That shouldn’t change when it comes to measuring and evaluating your work. Here are some social media goals:
- Positively influence audiences and their behavior.
- Create new business leads and customers.
- Generate conversations.
- Increase awareness and positive word-of-mouth.
- Improve customer service.
Do your social media outreach and interaction with fans and followers yield those results?
Your Social Media Measurement Compass
After working with social media marketers and vendors to figure out how businesses quantify social media performance, Susan Etlinger and the Altimeter Group created guidelines for linking that performance to business goals. The result was Altimeter’s Social Media Measurement Compass—six major business goals that social media can help influence. The Compass can help you analyze data and examine goals to determine how your social media activities are affecting your bottom line.
- Brand Health
Learn what people are saying about your services and products. While monitoring social media conversations can reveal what people are telling others about your company, you may also find it necessary to ask customers for their opinions in person and online.
- Marketing Optimization
Determine the online search terms people are using, and figure out which sites they visit before arriving at yours. People share differently on each social media channel. For example, Yelp allows people to be more critical than they can be on Twitter and Facebook. Google Analytics (www.google.com/analytics) is a good tool and a valuable starting point. It allows you to track your goal conversions (URL destination, time on site and pages per visit), analyze social media referral traffic and see the correlation between the two.
- Revenue Generation
Understand how use of social media affects purchase behavior, search results and customer loyalty. People may be talking about you on Facebook and Twitter, but are those conversations driving new opportunities and/or repeat business?
- Operational Savings
Forge relationships with fans who have strong social media influence. They can become your advocates and help promote positive customer service. When customers become brand advocates, they can extend your message’s reach at practically no cost to you. Find ways to feed them information so they can speak on your behalf.
- Customer Experience
Recognize that there is a direct correlation between social media and customer experience that translates into improved brand health, increased revenue and cost savings. Monitoring online conversations can help you understand your impact on customers and find clues on improving your tactics.
Find ways to listen to your customers for insights on product and service improvements. You can also start a conversation on Facebook by asking your customers for ideas on new products, services or promotions.
There are several questions to ask when examining your online audiences, says Jim Sterne, co-founder of the Digital Analytics Association. In a guest post at www.wdfm.com, Sterne poses key questions: How many people are listening? More important, how many of those listeners are actually information consumers? People gladly sign up for something and forget about it—they are not engaged with your brand. It’s better to measure how many people participate in some aspect of your social media activities. Do they post to online discussions, comment on blog posts, answer surveys and so on? These people have opinions and express them, which means they are engaged and involved.
Beyond knowing how many people are following you online, it’s necessary to understand how many people actually acted on your message. In addition, you want to understand the “tone” of the discussion happening online: positive, negative or neutral.
The following tools (some paid, some unpaid) can help you evaluate your performance and impact:
- Radian 6 (www.radian6.com). Paid social media listening, tracking, monitoring and engagement tool that allows you to understand the impact of social media on your business.
- Attensity (www.attensity.com). Paid social analytics suite that helps you analyze customer sentiment around brands, measure success, detect potential issues, engage customers, identify brand influencers, predict trends and improve product quality.
- Social Mention (www.socialmention.com). Free real-time search engine that monitors social media properties.
- TweetEffect (www.tweeteffect.com). Free service that highlights how your posts affect the size of your Twitter audience.
- Klout (www.klout.com). Free tool for measuring social media influence by calculating billions of data points across more than 100 million influencers every day.
- Google Alerts (www.google.com/alerts). Free email alerts that can tell you when your company name, product or competition are mentioned on websites.
- Google Analytics (www.google.com/analytics). Free website traffic analytics software, used by more than 50% of all sites, that helps you measure social Web traffic.
- CoTweet (www.cotweet.com). Paid web-based social media engagement, management and reporting tool that helps you engage, track and analyze conversations across Twitter and Facebook.
- HootSuite (www.hootsuite.com). Social media dashboard designed to manage and measure social networks, schedule messages and tweets, track brand mentions and analyze social media traffic. Free version provides basic analytics; paid version is much more robust.
These tools can offer key insights on traffic, clicks and other user interactions across a range of social media platforms. Here’s what they can tell you:
- Twitter. How many times were your links clicked, messages retweeted and hashtags used?
- Facebook. How often did people click your links, comment on posts and “like” your content?
- YouTube. How many people viewed your videos, commented on them, rated them, shared them and subscribed to your video channel?
- Blog. How many people viewed each post, commented on posts, shared them on social media and subscribed to your RSS feeds?
The marketing and advertising industry is still trying to determine the best ways to track social media and its effects on sales and business goals. Social media is still in its infancy, so there will continue to be tremendous growth in analytics and measurement.
The important thing to remember is that there are no perfect answers or solutions. You should use quantitative and qualitative reviews to get a true sense of what’s happening in the online community. While charts and data can provide a snapshot of what’s going on, there is no substitute for interacting with your customers and getting honest feedback. Ensure that you are reaching your target audiences with the right messages in the right way and fostering brand loyalty at each step in the process.