The ongoing need to increase profits and reduce costs means that every aspect of a business is under scrutiny, as executives try to identify where improvements can be made. Increasingly, managers are being asked to prove the return on investment in their domain.
For a concept as complex and varied as social media, proving direct ROI can be difficult. Very few marketers can say with any conviction that a specific tweet resulted in 50 sales worth $100,000 in revenue, for instance. However, the value of social media can extend beyond sales revenue, generating benefits for the customer support team by reducing the cost of a call center, for example.
With so much to consider, it can be difficult to know where to start. Here are the five steps you can take to begin measuring your social media ROI:
#1 – Define your goals up front
In order to quantify the success of your social media efforts, you need to answer two questions:
- What does success look like?
- How will we measure it?
This means thinking about how social media outreach efforts create genuine value for the business. An ever-increasing follower count is of little interest to anyone unless it translates into some impact on your business.
Instead, look at factors such as:
- Which links do your users click through on?
- How many of those clicks result in sales? How much is each worth?
- How many of your updates are re-shared? How many people actually end up seeing your brand?
- How are people use social media to get in contact with you?
- How much time and effort is being saved by using social channels for customer support? What is the dollar value of that savings?
Here is a list of useful metrics you might like to consider.
The exact metrics used will differ according to your needs, but for maximum value, they should be aligned with your overall business strategy. Showing wider business awareness also helps demonstrate that you take the role of social media within the organization seriously.
#2 – Step into the office down the hall
As you begin to think about social media beyond the confines of marketing, other business unit leaders may be able to provide helpful input. Or at least to describe what they would like to see coming out of the corporate accounts.
For instance, the idea of providing initial customer support via social media makes perfect sense, allowing your users to get in touch about problems with your products and services. Your team can capture and process each request in any way you see fit – all without tying up customer service operators on the phone. If this helps to reduce the customer support team workload or customer wait times, your social efforts are generating ROI elsewhere in the business.
Make sure you clearly define how these benefits are going to be measured, and again, agree what success “looks like” with each stakeholder from their perspective. Then you’ll have company-wide buy-in into the proof of social media ROI.
#3 – Start campaigning (and collecting)
With the metrics defined, you can launch your campaign. Make sure that you have enabled your teams to collect the raw data required to assess whether you are reaching your goals or not. You don’t want to get halfway in and realize you don’t have the right measurement tools in place.
You can learn more about using technology to help with measuring ROI here. Just remember that it is absolutely vital to collect data to support the metrics agreed in steps 1 and 2 above – so you can move onto step 4.
#4 – Set a review timetable
Collecting metrics is one thing, but you need to take the time to analyze the results.
Your finance team reviews company performance at least quarterly to assess profit and loss, and forecast expectations for the next quarter. This process allows them to better manage cash flow and pinpoint problems that need to be resolved to boost earnings and profit margins.
Likewise, your social media programs need to be regularly reviewed against your pre-defined goals to ensure that ROI is being maximized. As a bonus, these reviews often provide opportunities to identify ways in which your service can be improved.
Your review should also source feedback from your other stakeholders – it may be that some of your efforts are creating new value that is not currently being monitored. You can then work these observations into your future metrics program and institute a cycle of continuous improvement.
#5 – Start a cycle of continuous improvement
Collecting metrics and holding regular reviews helps to prove ROI, but neither will yield increases unless your observations are put into practice. It is vital then that your review process is part of a drive for continuous improvement.
Using the data your campaigns generate, along with information freely available from social platforms, you can better target future prospects according to their needs, interests, and preferences. Improved targeting in this way greatly reduces the cost of customer acquisition – and raises ROI.
You will also have the opportunity to streamline many of your common processes, helping to reduce the cost of subsequent campaigns. The information you collect will also provide evidence for extending the social media program to other departments – such as our earlier example about customer service. Social can enable efficiencies in other departments, reducing operating costs – another plus for ROI.
Social media ROI is an ongoing process. You will find that your metrics and goals morph along with the shifts in business strategy – but that’s no excuse to delay quantifying your data.
Even if your boss isn’t currently interested in social media ROI, you can use the disciplines mentioned here to build a more effective customer engagement plan that helps the rest of your business become more productive too.
To learn more about using Falcon.io to prove social media ROI for your business, please get in touch with us.