Organizations are experimenting with Social Media Platforms and plans. However, after the initial experimentation, one has to quickly evaluate Social Media’s contribution to business, performance vis-a-vis other channels and establish best practices guidelines.
Social Media is not a sales channel and that makes measuring the impact on bottom line challenging. Social Media presence helps improve the traffic, conversions and revenue on other sales channels and also supports marketing, branding and CRM initiatives. The tangible and intangible contribution of Social Media to Marketing goals has to quantified and factored ito measure the true ROI on Social Media investments.
Here is the 5 step process I suggest to measure the Impact of Social Media and ROI on the Social Media Spend.
Set Social Media Expectations and Goals
Can social media drive sales? Is there a correlation between followers on Facebook and traffic to the website? Can Twitter help sell overstocked items? These are few burning questions for the top management and the marketing teams. The first step in the process of measuring the ROI is setting the Social Media Expectations and Goals. Define your objective and expectation from the Social Media. It is also important to define program Success Matrix at this stage. Starting with a clear mandate is a good idea.
For example, if you want to build brand awareness, use Social media as a CRM tool and boost online sales you could start with goals statement that reads ” The Social Media campaign will help build a community of customers and potential customers; help understand customer’s need and pain areas better, endorse Brand Positioning, enable crowd-source innovation and augment online online sales. In the first 6 months we will build critical membership/ readership across Blogs, Facebook, Twitter, YourTube, Forums, Question and Answer websites. In 6th thru 9th month we will evaluate these platforms on the following parameters: Reach, Engagement, Revenue, Sentiments, Branding and investment”
Create the Social and Business data correlation framework
To record measure and improve the Social Media campaign you would need to mash Social data with data from other channels. Mashing Social Web and business data requires a robust analytics and reporting system. You may need to tweak your present analytics tool to accommodate Social data. For example, your existing analytics may not support mentions on a platform and the associate sentiments.
Data co-relation will help justify the investment on Social media. For example, if you want to measure the impact of social media on online sales you would need to
- Track Traffic from social platforms through the buying process. Sale may not happen in the first visit. (Cookie?)
- Import this data into your analytics and reporting tool.
- Calculate the lifetime value of a customer
- Compare it others channels: search, affiliate etc.
If you want to measure the impact on Brand awareness, you would need to track
- Brand Mentions in discussions across all platforms ( social and otherwise)
- Sentiments of the conversation (Positive, Neutral, Negative)
- Contribution of Social traffic to total Traffic
- Impact on Direct Traffic
It’s important to map each goal with relevant matrices.
Identify Social Media Data points and Sentiment Analysis Framework
The next step is identifying data points and data sources for the Social Media campaign. You need to measure and record social media information like # followers, # mentions ( with links and without links), # comments, competition’s data and your share of conversation.
Manual monitoring and recording of this data is tedious and impractical. However, a number of tools are now available to monitor, measure and record this information. However, you could start with the free ones like:
- Google Alerts
- Twitter Search
Once you have the data you need to analyze the sentiments associated with the comments and mentions. Sentiment analysis involves filtering the positive ( Good service, Helpful Representative etc.) and negative mentions ( Service Sucks, Non Responsive etc) and assigning a weightage that reflects the communication intensity.
Adding weightage helps rationalize Social Media and Business data to a common scale. Adding weightage could be a bit tricky and the process evolves over a period of time.
Account for Branding, PR and Opportunity.
Social Platforms help Brands and Business get closer to the consumers and create recall, loyalty and community. Hence it id important to factor in the intangible impact of the social media campaign.
If you are running a print/ online campaign say on Time Magazine, Wall Street Journal or The Economic Times what is your cost per reader? And how does it compare if you reach out to their communities on Facebook Time Magazine, Wall Street Journal, The Economic times? Account for free visibility and reach.
How does the cost of running a PPC campaign on Google compare with the cost of running targeted paid ads on Facebook?
Over a period of time you would need to develop a formula that quantifies each interaction/ mention and follower on Social Media Platforms and merge this information with business analytics.
Merging Social data with Web and Business data will give you an insight into the opportunity.
Analyze and Report
The last step in the process is collating the data and putting it in a format that gives perspective and helps make decisions. Compare Quality of visibility/ leads, volume of visibility/ leads across campaigns in a report that’s easy to put together and simple to understand.
I recommend a report that answers business critical questions like:
- Is there a difference between a lead from Social Platform and from other channels on parameters like:
- Time spent on website
- Lifetime value of customer
- Revenue per customer
- Brand Awareness
- Brand Loyalty
- How does the cost to reach/ acquire customers compare across channels?
- Is there a difference in Brand Experience between a lead from Social Platform and from other channels?
- Which Social Media Platform works best for your brand?
- Is there a seasonality/ Day part across platforms?
Social Buzz is a function of visibility (size of the community) and associated sentiments across platforms. The 5 steps mentioned in this post would help you track and continually improve your Social Media program.