So you’ve started to finally utilize social media outlets to promote your business online. Great! Now what? How do you measure whether or not all your efforts towards social media are working? Well, to be honest, it is not quite that simple to measure your ROI. Unlike traditional advertising or marketing techniques, social media may take a bit longer to measure, rest assured that it is measurable and it will deliver results, if used correctly.
There are a large number of online resources available to help explain how to measure social media ROI. Generally most people agree on what strategies work, but breakdown the information in different formats and explanations. In Mark Hayward’s article, “Measuring Social Media ROI – Does size matter?” he explains how the size of your company does not determine the success of your social media campaign. Large and small companies alike can use these strategies and achieve their desired results.
A blog post by Jamie Lee Wallace titled “Social Media Measurement It’s like being a great bartender,” compares bar tending to social media measurement.
“A good bartender earns repeat visitors by remembering the names and drinks of the regulars, engaging new visitors in friendly discussion and sharing news and insight about the local scene. It’s not all about how many sales you can make in an hour. There is definitely an intangible “return on chatter” that helps create an image or brand for the bar,” states Wallace.
It is important to realize the difference between Impact and ROI. Impact depends more on whether or not relationships have improved, if messages were communicated the way you wanted them to and if you achieved the type of exposure you wanted. ROI depends more on if your sales or revenue increased, did the right people show up and if your audience changed.
The qualitative benefits of social media support the goal of financial impact or ROI. It is important to focus on what the data tells us and use that to the best of our ability to manage a highly integrated campaign that is not just about “social media,” but about delivering a great message and using smart marketing techniques to do that.
An article in B-to-B magazine titled “You CAN Measure Social Media ROI,” by Paul Gillin pinpoints the best ways to measure ROI and achieve the best results.
1. Focus Gillin suggests choosing 5 metrics to focus on. Narrow down your metrics to the ones you think are most important for your business and go from there. Start off with well-defined business goals and ways to analyze the impact. Breakdown the benefits, goals and outcomes you want to obtain.
a. GOAL – What do you want social media to do for your business?
b. PLAN How will the goals be achieved?
c. IMPLEMENT & EXECUTE Put your plan into action.
d. MEASURE What are the measurable results?
i. How are people hearing about my business? One way to you can track visitors is to ask them how they found out about you.
ii. Which of my efforts are bringing the most traffic (blogs, forums, etc)
iii. Am I drawing the right people? Are people satisfied with my site once they get here?
iv. Are we closing a sale?
2. Know What Works Everyone on marketing team should know your 5 most productive referring web sites. A majority of your marketing efforts should go towards those sites.
3. Understand Influence Is it better to get a retweet from someone who may send 20 to your site as opposed to someone like Guy Kawasaki, who can send over 1,000 people to your website? The answer may seem obvious. Of course Kawasaki may be able to drive more traffic to your site then you at the moment, but over time if your friend can achieve enough referrals and can manage to have them stick around, then they might be more influential then you think. It is important to track visitor paths to see how people get to your site, if they stayed, bought something and if they left, where did they go?
4. Be Unique The link you use on Twitter should be different than the one you use on Facebook. Know the source of every click and watch where people go.
5. It’s not just about your site Important conversations about your site could be happening on other websites. It’s all about community relations and establishing your brand and start people talking.
6. Coax conversations back to your site to measure the results Entice people to actually go to your site. Figure out a way to draw people to your site besides “click here.” What is going to set you a part from the competition?
7. Monitor the Competition The tools you use to track your progress can also be used to track your competitors. It is important to know what your competitors are doing and determine what is or is not working for them to help determine your own strategy.
8. Net Promoter Score or any big-picture metric – you might consider using this type of metric to keep track of potential customers. One question provides the best predictor of customer loyalty for the vast majority of businesses: How likely is it that you would recommend (Company/Product X) to a friend or colleague? Using a 0 to 10 scale, you can calculate your Net Promoter Score (NPS) by taking the percentage of Promoters, and subtracting the percentage of Detractors.
9. Time Successful programs may take 1 to 2 years before showing solid results, so if you are looking for a quick fix for your brand, then maybe this not the route you should be following.
Social media has become a great way to expand your business opportunities. It is not only about using the different outlets that are available, but about discovering what strategies work best for you, which ones are not working and to constantly analyze everything you’ve done to see if it’s on the right track. It is not an easy task, but definitely something worthwhile that if done correctly can have a tremendous impact for your business.