Measuring social requires a strategy in alignment with business goals, great tactics, and a strong investment in setting the corresponding KPIs.
4 min. read
"Having the right social KPIs is the golden ticket to be able to measure your social ROI. But how do we even get there?"
In “Win The Social Marketing Measurement Game” by Forrester Research in January 2014, research shows that marketers still believe that measuring social media ROI is one of their biggest challenges. Forrester’s research also shows that social marketers nearly always measure the wrong metrics and KPIs when they are determining business value.
"Engagement metrics like comments and retweets are, by far, marketers' favorite way to measure social media (...) But engagement is a tactic, not a metric. If you're lucky, your customers will want to engage with your brand or company. But engagement is their goal, not yours. Your goal is to use that engagement to drive customers toward actions that create business value for your company."
I agree – and I know from my own experience that we as marketers end up staring at the never-ending array of social metrics that turn into an overwhelming numbers game – destined to fail even before it gets started.
Move away from social media
No, seriously, I mean shut-down-your-computer-and-take-a-giant-step-back.
If you’ve decided that you want to track a monetizing social ROI and not a engagement score, you’ll need to really look at “Hard ROI*”.
With this, I want to underscore that I do believe that soft values such as emotion, connection, loyalty, preference, and advocacy are very important – and you will need to work really hard to understand and amplify them – but look at the soft values as tactics for achieving your hard ROI.
Focus on what your company is trying to achieve in terms of goals that are tied back to a hard ROI* – meaning a monetizing business value:
- Business Growth (net profit)
- Cost Saving (a reduction in expenses)
- Business Value (economic value added to the business)
Regardless of the industry you are in, the three hard ways of looking at ROI are important, and will always be represented with a dollar sign.
Business growth, savings or value
Focus on your business, your brand goals, and department, and choose one of the hard ROI measurements to build your hard social KPIs upon.
Depending on your business focus and your chosen KPIs, they will look and be calculated differently.
These are a few high level examples:
- Business Growth – This is directly related to a purchase/download or a lead generation. This requires you to know your customer journey. You can always measure social by what referred the user when he or she converted – but maybe your customer has a longer decision making process than just the last click? In that case, you might want to include social in the marketing mix that leads up to a decision to purchase. If your customer has a purchase decision that is less than 30 days in duration, you can easily measure that via web analytics services with multi-touch.** However, if you are in industries that have a longer customer purchase decision timeframe than an automotive or real estate purchase, for example, you can change the default settings in your web analytics service to up to measure multi-touch for to up to 90 days.
- Cost Saving – An example for measuring cut reduction would be to line up the cost of resources carrying out customer service on social versus an outsourced call center that normally takes a set dollar amount for answering each incoming call. In this case, your ROI would be the cost savings on call deflection by providing social customer service – which is normally carried out by internal resources on the front line.
- Business Value – Let´s say you’re running a competition on social where participants need to enter their email address to participate. Then you will find the business value in the number of new emails collected in the database through the social campaign. You would then take the number of emails collected, times the value estimation of a single email to the company’s database.
Social ROI measurement, while still a strong topic of contention within the industry and its experts, has a vital connection to a business’ bottom line. We take great interest in and support our customers’ efforts to present a relevant overview of their social media efforts in conjunction with their use of the Falcon platform.
I’d love to hear your feedback, and how ROI factors into your social media strategy and execution.
*Hard ROI – The classic Return on investment measurements that often goes hand-in-hand with a monetising value . Growth: invest 500 Euro and see 5000 Euro in increased direct sales in a set timeframe.
**Multi-touch- The Multi-Channel Funnels reports are generated from conversion paths, the sequences of interactions (i.e., clicks/referrals from channels) that led up to each conversion and transaction – social being one of them. You can normally find this service in your web analytics tool such as Google Analytics, Omniture SiteCatalyst or Webtrends.
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