Saturday, August 14, 2010

How To Measure Your Social Media Efforts

Social Media efforts like any other marketing effort requires that it be measured, monitored and be accountable. This is simple business practice not restricted and not limited by marketing efforts alone. Typically in business terminology called Return On Investments or ROI.

It is certain that while Social Media is easily available and can be networked with, it still does require investment, skill and thorough knowledge. These investment at minimal level would be time, energy, technology [hardware, software the web and internet connectivity], dedicated human resource. Add to this just like any other marketing campaign we will require objectives and KPIs Key Process Indicators as well.

There is lot of research and discussion going on in the area of 'how to arrive at a ROI for Social Media'. There are two unique groups at the two ends of a spectrum. One group profess that Social Media has not as yet reached the stage of measurement and the other group states that Social Media can be measured. What is your take on this? Can Social Media be measured - as yet?

What we need to understand is that while we do measure the Social Media space we need to be very clear on what the parameters are to be. Naturally the most upfront one is mentioning that if the objective is achieved then all other things would fall in place. Now the objective for Social Media need not always be in terms of quantifiable terms. It could be qualitative and / or quantitative. The measuring process works just like any other profit and loss system however the parameters are very very different. Add to this not only are the parameters different but the scale of these parameters are also different.

One needs to understand 'how Social Media works' before diving into a measuring chase. This is the most critical part. If one does not know, understand and comprehend how Social Media actually works, how it performs and how to go about it then one is not [with due respect] qualified to establish the measuring criteria. As you read below you will get an understanding of  this statement.  

While measuring the Social Media efforts we need to consider the below parameters. The below parameters are indications of the various factors that are to be 'considered' and 'understood' before we start to set a formula:

Time: Time is of great essence here in Social Media. At one level we need to be clear that immediate results are not every time the only correct way for measure. Social Media by its nature works on two levels one is engagement levels with the members and the SEO level. If we go a little deep both engagement and SEO get better with consistent efforts.They require the time factor to get established. For instance the positive engagement which eventually should lead to loyalty and viral effect cannot happen at once by merely setting up of a Facebook Fan Page for instance and getting people to join in. To develop relevant interactions the brand and the customer set would require time. The next part is SEO. SEO work is like an investment. You consistently work on the SEO aspect while working online. The efforts put in today will reap you rewards in the near future.  

Number of followers / fans / members: This is the most sought after target. While it would be great to have a huge Fan base it is necessary that the topics we communicate is relevant to them and enhancing our brand image. It is equally essential to get them dialoguing with us and just not having a one way communication [only from us]. This means that we need to have quality and not just quantity based followers / fans / members. When our communication is engaging only then we can be sure to a large extent to have a desired response. Additionally we should remember that good quality of engagement would lead to a viral effect. Thus automatically leading to increase in membership which is relevant to us and to whom we are relevant and bring value into their lives. This leads us onto 3 aspects namely:
Quantity [number of members]
Quality [right members that are relevant to brand]
Engagement Level [level of interaction and involvement]

For those who would be satisfied with numbers there is still a way out: Hence instead of the typical, usual number game how about using parameters like:
How many customers asked for more information
How many have been retained for over three months as your Tweeter followers
How many come to your main site / main blog
What was the conversion taking place in terms of sales
Number of features that the customers suggested and how many have we managed to implement
Number of hours in a week when we have interacted with the customers and created a result
Number of new qualitative customers
How many qualitative customers are being retained over three months
Number of repeat customers [same customer interacting intensely and participating more]
Number of viral effects that have taken place
Reduction in support costs
Number of new things that we discovered as consumer insight
Increase in Page Rank
Number of redemption taking place [if at all there is redemption coupon made available]
Number of back-links that you receive [qualitative back-links not just quantitative]

Add to this be sure to measure the qualitative aspect in terms of:
Satisfaction
Loyalty [retention and viral effect]
Engagement
Feedback

So it could be the mix of qualitative and quantitative matrix.

Add to all of the above factors is constant improvement. Having set the parameters we need to consistently check with reality of out individual case. Many a times we may set a lot of parameters that will not really make sense to an individual case for measuring. The parameters need to be in-sync with the feasibility of there being an output in terms of the brand, customer set, competition and category. It is not the case of same parameters fit all.

So we need to be very clear on how we want to measure the success of a Social Media Network Campaign.

What are your thoughts? Do join in.

6 comments:

  1. Awesome Post!
    Social networking sites like Facebook have drastically changed the way we use the Internet. Online advertising is no exception, as social networks and social media have altered online marketing strategy.
    Thanks for sharing.

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  2. Thanks socialcreeper for dropping in here. Yes if corporates are accountable towards costs incurred then we too need to search a method on this.

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  3. The whole ROI debate is an interesting one.

    Having seen @thebrandbuilder (Olivier Blanchard) at 3 conferences talk about his take on ROI, he sells a compelling argument that Social Media is very much quantifiable from an ROI perspective.

    See his slides for some more detail here: http://www.slideshare.net/thebrandbuilder

    Plus Olivier rightly explains that the CEO and CFO of most businesses, especially larger corporates will want to know what the ROI is on their Social Media activity. And this is where it becomes sort of tricky and perhaps why a huge number of larger businesses are still not using Social Media.

    A CEO or CFO isn't going to be impressed that their Social Media team has managed to get 2,000 or 20,000 followers. They want to know the impact it all has on their bottom line. Great that they've had an extra 50,000 unique visitors to their website but where did they all come from and can it be proven that it was a direct result of using Social Media? And did it result in any new business?

    This can still be a great thing for smaller businesses because it gives them a chance to punch above their weight and really get connected and get advocates of their businesses and steal a march on their bigger competitors, while their still debating whether Social Media works or not.

    On the other side of the debate I heard a great example given during an evening get together at Media140 in Bristol a couple of months ago. The guy said, "People don't try to mearsure the ROI of their telephone calls! So why do we think we need to measure the ROI on Social Media? It is after all, just another medium for having a conversation with people."

    I understand there are some key differences; you can't just pick up the phone and speak your message and get it forwarded to thousands at the click of a button! But I kind of understood where the guy was coming from. Now if the telephone was being used by a sales guy to make cold calls then there would be an expected and measurable ROI. But in business on a daily basis we all make calls to existing customers to keep in touch and sometimes try to upsell, but do we really ever try to measure the success of those calls?

    Does the CEO or CFO ask what the ROI is of using the telephone in their business?

    I'm really not arguing one way or the other here, as you can probably tell I've got a foot in each camp! I've had success using Social Media and won business asa direct result of using Twitter. I've saved a couple of customers who were thinking of leaving and had posted on Twitter. I've also raised money from complete strangers for my charity fundraising directly via Twitter. So yes there is an ROI.

    But for me I LOVE the serendipity of Twitter and other Social Media platforms. I've made a huge number of friends and I know business will come as a result but it's a slow burn.

    Also, for those with bigger pockets, don't forget there are plenty of Social Media Monitoring software companies out there who will help show that you can measure everything you do. But the cost can be quite high in some cases.

    If you want to know more about Social media Monitoring Software for your business check out this great resource: http://www.socialmediatoday.com/SMC/155299

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  4. Hi Dickie, Thanks for dropping by. Yes ROI for Social Media is what is being debated since some time. Thanks for sharing your inputs and the information. You are correct that at the end of the day it is the bottom line; and rightly so. Social Media efforts like any other marketing effort requires that it be measured, monitored and be accountable. This is simple business practice not restricted and not limited by marketing efforts alone. Typically in business terminology called Return On Investments or ROI. What we need to understand is that while we do measure the Social Media space we need to be very clear on what the parameters are to be.

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  5. Hello, I came to your blog and have been reading along your posts. I decided I will leave my first comment. I have enjoyed reading your blog. Nice blog. I will keep visiting this blog very often…

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