Social media as a channel is now pervasive among businesses of every size in every part of the world.  As such, like any channel, it is important to have an approach for measuring the value of your social media investment. A number of marketers use site traffic, tallying fans and followers, and positive buzz as their primary metrics. More and more companies want to measure social media success based on something more relevant to the business.  As usual, the bottom line is being able to measure the impact on, well, “the bottom line.”

If you’re like many companies, you’re spinning up various social media platforms. As you do so, you want to be sure to select the social media outlet that best matches your target. Twitter, Facebook, LinkedIn, and other platform users all have very different demographic profiles.  Once you select the right social media vehicle, the next step is to craft your message and decide how you are going to approach the target audience. When using social media, it is essential to take a customer-centric point of view. You need to frame things from the perspective of your audience and in ways that are relevant to them. The way THEY think and communicate needs to be front and center at all times. Tackling customer journey maps can be very helpful for this step.

As with any channel, your messaging needs to add value. What’s in it for them have never been truer than when it comes to the social media channel. This is vital if you want to increase awareness and preference for your products and services. Dare to be different. There’s a lot of clutter on the social media highway, so to get people talking, you need to stand out.

Rather than tracking subscribers, fan,s and followers, measure how many people are connected with you for all three. Compare the purchase frequency and word of mouth endorsement for this group against the groups that only interact with you on one platform.

Measure Social Media Beyond Customer Engagement

Businesses realize they can use social media to generate insights, stimulate demand, and create targeted product offerings.  As a result, it’s important to connect your efforts to specific performance targets tied to the bottom line.  Most organizations today have a fairly good idea of how social media is impacting customer engagement. Marketers have at their disposal tools and methods that capture and measure:

1. The level of engagement with followers, advocates, influencers, and readers.

2. The impact of engagement on acquiring new prospects and improving customer loyalty.

While these are viable ways to understand whether social media is creating customer engagement, these measures alone are not enough.  The key to connecting the engagement to incremental revenue opportunities.

Create the Links Between Your Social Media and Business Outcomes

Social media is not free. Research suggests that social media investments were estimated at 6% of total online spend and a bit less than 2% of the total Marketing budget.  Therefore, you need a way to measure the value of this investment; the measures should tie to the bottom line. Outcomes such as product adoption rate, win rate, referral rate, or incremental share of wallet matter to the business and impact the bottom line.

As marketers, you will to create the links between social media engagement measures and these types of business outcomes. This will require Marketing organizations to have access to excellent data, solid analytical skills, and well-designed metric chains. Otherwise, you will end up primarily with activity and output measures andbe unable to prove the value of your investment.  Before you invest further in your social media, be sure you have a clear plan for how you will measure and connect the success of your efforts to the bottom line. Contact us for help with creating your links.

Social Media Shouldn’t Be A Solo-Act

One word of caution. Avoid putting all your eggs in the social media basket. A study by ExactTarget found that a multi-channel approach may have a stronger impact on customer engagement than using email, social media, etc. as separate channels. The survey report, entitled ‘The Collaborative Future’, provides insights into how consumers want to engage with brands. The results suggest marketers should focus on developing and implementing an integrated strategy that combines – not isolates – the strengths of various online channels.

Keep these considerations in mind:

1. Nearly all online consumers subscribe to email marketing messages, and many are fans of brands on Facebook and follow brands on Twitter.
2. There is a higher likelihood of purchase after engaging with a brand via EACH channel.
3. There is a higher likelihood to recommend a brand from those who engaged with a brand via EACH channel.
4. While Twitter is most likely to drive increased purchase intent, email remains the cornerstone of online retention marketing programs. Two-thirds of consumers subscribe to email marketing messages to receive discounts or promotions.
5. Over a third of Facebook users who become fans do so to publicly display their brand affiliation to friends – nearly twice as often as consumers who follow brands on Twitter and nearly four times more often than consumers who subscribe to email communications for the same reason.
6. Almost a quarter of consumers follow a brand on Twitter in order to interact with the company, more than become email subscribers or Facebook fans for the sake of interaction.

You will need metrics beyond hits/visits/page views, repeat visits, number of followers or friends, sales levels, revenue per customer, and buzz to prove the value of social media. In addition to some of these metrics, it will be imperative to measure the value of your social media initiative and efforts. One approach for measuring social media marketing is to apply the balanced scorecard’s four dimensions:

1. Financial: Has revenue or profit increased, or costs decreased?
2. Brand: Have consumer attitudes about the brand improved?
3. Risk management: Is the organization better prepared to note and respond to attacks or problems that affect its reputation?
4. Digital: Has the company enhanced its owned and earned digital assets?

FAQ:

• People connected on multiple platforms
• People who interact with you on only one platform

• Product adoption rate
• Win rate
• Referral rate
• Incremental share of wallet

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