Getting Social: The ROI
How do you measure social media return on investment?
Heres the story, step by step, as compiled by Barnraisers, a marketing firm in Norwalk, Conn.
Since its called return on investment, begin by identifying the return you want at the end. Define and quantify your expectations. For example, do you want to: 1) Increase sales by 50%, 2) shorten the purchase cycle by 1/3, 3) double leads, 4) increase conversion by 40% or 5) decrease customer complaints by 75%. Be as specific you can be at the start; it increases the success you have measuring ROI at the end.
Social media is one of the best channels for building 1-to-1 relationships. Take the time to identify who you want to attract and find the social networks where they spend their time. There are are great tools to help you. For blogs, theres Technorati and Alltop. For Facebook, theres Your Openbook and Booshaka. For Twitter, theres Twitter Search and Kurrently. Just go to the search box in any of them and type in the product or service you offer. In fact, put the words, buy or need in front of it and youre one step closer to a 1-to-1 business relationship.
As you succeed with who you want to attract, your audience is going to want to find out more about you. The first place they are going to go is your website which should have an analytics tool like Google Analytics. Look at your Traffic Sources: then, look at Referral Sources to see which social networks provide the greatest number of visitors. Assess if this is in line with the social networks where you spend your time and resources.
Companies ask that you Like them on Facebook. Ok. Now what? This chart tells you consumers are motivated to Like you if you show them some Love, first. It also tells you, if you take this step, they show their support for your brand in return. If you need some help showing some promotional Love, Wildfire offers some great social media apps that are effective, affordable and make the value exchange easier for you to execute.
Social media is one of the best places, bar none, to gather competitive analysis and intelligence. Thats because you can understand a competitors business from a number of vantage points: Quantitative (Likes, Followers, Fans), qualitative (Positive and Negative comments, quality of engagement), strategy (competitors posts) and ideas. Let them show you opportunities. If you need to see if their social efforts are resulting in increased traffic to their website, competitive intelligence tools like Compete and Alexa can tell you.
Theres is no shortage of measurements in social media and monitoring them has turned into big business. Im a believer that less is more. Likes and Followers are worth measuring if youre prepared to take action when they go up or down. If more marketers flipped the chart below from HubSpot upside down and used it as a guideline to pick the metrics they should track, theyd be well on their way to an effective social media scorecard for ROI.
By this time, your efforts should have produced gains in awareness, connections and engagement that have resulted is savings versus traditional media and marketing. But there has been a time investment which also has a cost. If you are cognizant of results and resources, you have the two primary criteria for Social Media ROI in place.
Even though we should all be concerned about the numbers and revenue, social media is a human media channel and never lose focus on delighting and being genuine with customers every time you are in contact with them. If you do, youll find the numbers start to take care of themselves.
Social Media ROI is one of the courses in a Social Media Marketing Mini-MBA taught by Rutgers University and is worth looking into. I am fortunate to teach and be among a great faculty that includes Augustine Fou, Matt Bailey, Mark Burgess, Heidi Cohen, Glen Gilmore, Greg Jarboe, Christina CK Kerly, Mike Moran and Mark Schaefer among others.
Getting Social: The Rules
Getting Social: The Recipe
Here's how advisors, brokers and firms can measure their return on investment in social media.