Social Media has become essential as a channel for engagement with customers and prospects. Yet because these channels are so new, most firms are still developing their capabilities to capture the full benefits of social media.
“Social Media ROI” is not well optimized. Social media metrics—by which I mean metrics that matter, key drivers of financial benefits—are in their infancy.
Using social media effectively requires more than simply tweeting, liking, posting, and connecting. Achieving measureable ROI requires an understanding of your company’s business model and its drivers, continues with careful analysis of options, and becomes viable through the development of relevant metrics to track performance in ways that are relevant to your specific business model.
Quantity? Quality? What Metrics Matter? Recently I was interviewed by April Rudin, CEO of The Rudin Group, who wrote an insightful and enjoyable article for the Huffington Post that takes aim at the most misunderstood and immature metric in the entire social media realm: follower counts. Her article argues that for the majority of users and businesses, quantity (e.g. number of followers) of relationships is over-rated, while quality is under-rated (e.g. rich and lively engagement with people who matter to your business model). In response to our discussion, my team and I at Fitzgerald Analytics did some bespoke analysis for Rudin, which she features in her article.
I agree with Rudin...follower counts are the most over-used metric in social media. According to a study by Marketing Sherpa of more than 2,000 marketers, the most commonly used social media metrics are: 1.) Visitors/Sources of Traffic, 2.) Network Size, and 3.) Quantity of Commentary about Brand/Product. So it’s Quantity, Quantity, and Quantity. This may work for certain large consumer brands, but for 99% of the business models out there, we can do better!
It’s About The Business Model. The question of what matters more – quantity, quality, or other dimensions – depends entirely on your organization’s business objectives. It depends on what you are trying to accomplish through social media channel(s). Is your company trying to create buzz and excitement around a new product launch? Or does your business model require a better/additional communication channels to address customer gripes? Does your firm live and die based on your ability to acquire new customers? For each of these business objectives, a different set of metrics is appropriate to measure performance of your social media campaigns.
Measuring what Matters to YOUR business model. To increase social media ROI by measuring what matters, we have five practical recommendations:
- Begin with the End in Mind. What are the desired end results for the social media campaign? Documenting what the company is seeking to accomplish with clear business objectives lays the foundation for effective measurement of the company’s social media engagement.
- Demand Causal Clarity™. Understand the fundamentals of the business and how operational drivers lead to success. What drives the end-goal you defined in step one? Before one can begin to measure impact or return on investment, it is important to identify the right levers on which to pull.
- Map Metrics to Objectives. While most marketers are focused on network size and overall buzz, your social media metrics should map to your business objectives. If your priority is to drive sales, you should be evaluating conversion rates, not number of eyeballs. You can’t deposit page visits in the bank! Measure things that drive hard dollar results
- Choose Social Media Tactics and Activities that Match your Objectives. Decide what to do on social media based on your goals. Depending on your business model, the platforms you use, and how you use them will vary significantly.
- Be Nimble and Adjust. If the social media campaign is not delivering the desired results, rethink how these tools are being used and adjust. However, it is only with the insight of measuring performance that this option is even possible.