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7 ways to measure social ROI

Posted by Sheera Eby on June 14, 2013

In a recent study we conducted among marketers, social media rose as the top channel for increased marketing spend in 2013. Yet in this same study it became clear that marketers are uncertain about the best ways to measure social media, and specifically social media ROI. So it seems that marketers are investing more in social media, but uncertain about the optimal metrics.

 

 

In my recent Social CRM article, I discussed how employing data and targeted mechanisms can help transform social media into a customized, behavior-based channel. That is the premise of social customer relationship management (SCRM). SCRM uses social media marketing services and techniques to enable companies to communicate and engage with customers and prospects. It provides a platform for creating meaningful ongoing dialogue with prospects and customers, and most important it is a measurable form of social media marketing.

 

Measurement is inherent in social CRM, versus traditional social media. It is predicated on determining which activities are generating engagement and leveraging those measurable learnings to inform and integrate with other areas of marketing communications.

 

The first step is to determine what your goal is for social media marketing. As with most marketing activities, objectives will drive the optimal choice in measurement. Here is a list of seven different ways to measure your social media marketing activities and help gauge social media ROI.

1. Measure aggregate engagement
The most common social media metric is engagement. Although engagement doesn’t answer the social media ROI question, it does provide foundational information. We recommend marketers always remember the basic social media key performance indicators (KPIs) as they start to evolve their social media measurement strategy.

Basic engagement metrics that should be considered are:

  • Followers
  • Social shares (retweets, LinkedIn shares, etc.)
  • Reviews and comments
  • Engaged users
  • @ mentions

 

Having roots in response marketing, it’s hard to advocate for metrics such as impressions and sentiment. A couple of other engagement metrics that we’d put in our “not so favorite, but deserve a mention” bucket include: organic reach, viral reach, impressions and traditional monitoring metrics such as share of discussion, sentiment, etc. (which may have limited longevity in the social CRM world with more actionable metrics on the horizon).

 

2. Measure web traffic and impact on search
Most marketers first turned to social media to help supplement their awareness, reputation and/or branding efforts. As social media marketing has matured, marketers are finding that it’s a useful vehicle for meeting a number of different objectives. Many marketers are currently using social media marketing to deliver content that can help them get found by prospects. In this case, social media isn’t about the content, it’s more of a delivery vehicle.

 

Key metrics that support this approach include:

  • Web traffic: Number of visitors driven from social media marketing activities
  • Inbound links: Increase in the number of inbound links added as a result of these efforts
  • Keyword ranking: Influence that content development, social sharing and other social media marketing activities have had on organic search and keyword rankings

 

3. Measure leads and names acquired
Social media is an effective channel to generate hand-raisers and can also serve as a vehicle to build your database. For many marketers, cost per lead is the ultimate social ROI metric.

 

Purchased list performance is very weak relative to house lists. Utilizing social activity based on capturing information, which can ultimately lead to conversions, is the goal for many marketers today. Users expect something for the exchange of information. Determine what you can offer in exchange for information, e.g., being the first to be notified of a new product or sale and downloads of how-to content, ebooks or white papers.

It’s important to think through the action that you hope social media marketing will drive. If generating leads or name acquisition is the objective, then you need to consider utilizing data capture landing pages and integrating lead forms into the user experience.  Marketers understand leads, but name acquisition is a metric that many marketers undervalue.

 

The two metrics we advocate in this area are:

  • Cost of acquiring the name: Consider the cost of acquiring a name across channels as one comparison for social ROI.
  • Leads generated and converted: Determine the number and value of leads generated and converted that originated from social channels. This is the ultimate social ROI metric. And for most marketers, it doesn’t take many conversions to demonstrate a positive payoff on social activities.

 

4. Measure channel sources to refine marketing channel spend
According to a recent marketing trends study that J&C conducted, time and resources are the number-one concern that marketers are facing in 2013. There are so many ways to reach prospects and customers, but unfortunately time and budget are limited. Marketers are constantly faced with the question, “Are we spending our time and money in the best way possible?”

Social ROI has both direct and indirect measurements. One indirect metric is leveraging a social CRM tool to understand which channel sources are contributing to web traffic, engaged users and ultimately leads. This information can be used to refine your marketing budget and set prioritization of channels and marketing investment. Ultimately this increases marketing spend efficiency and leads to a more effective use of marketing dollars.

 

5. Measure social media’s ability to inform and integrate with all marketing activities
Along the same lines, analyze the results of your social media programs to understand user behavior and engagement. Social engagement information enables you to quickly understand what content users find most relevant and ultimately helps move them down the lead-to-conversion path.

Used correctly, social data can also provide a platform of real-time learnings and feedback that will shape other communications tactics messaging. For example, if users are engaging with content on a specific topic, consider how that information might inform paid search efforts. Is there an opportunity to drive more people to your site by applying insights to SEM ads based on what social media content users are finding most engaging?

Once these findings are applied, the measurement becomes the effectiveness of the entire marketing mix. Ultimately this increases overall marketing spend effectiveness and total marketing ROI, not just social ROI.

 

6. Measure specific segments or groups
The vision for social CRM is predicated on leveraging social behavior against specific groups. For many, one of the most difficult yet tangible social metrics is customer segment value.The following parallel some of the metrics already discussed, but now we’re applying them to a segment or customer level:

  • Measure engagement including content read, click-through behavior, social sharing, comments and reviews: Evaluation of this information can reshape content and engagement strategies
  • Measure leads and downstream conversions against these specific groups: Measuring the role of social among different groups can help build toward the total understanding of the value of different customer groups
  • Measure downstream conversions based on integrated behavior: Leveraging social media insights is essential to creating a social CRM path; measure the conversion and other behaviors along the path to demonstrate the value of social engagement for different groups

 

7. Measure customer level relevancy and impact
The future of social media marketing is one-to-one individualized content. Relevancy is going to prevail. Technology has afforded us the ability to tailor experiences across media. The goal of SCRM is to generate an interaction and ensure a cohesive and meaningful experience. Once users engage, leverage behavior to develop targeted relevant communications. This is the biggest differentiator that transforms social media into social CRM, and it’s the real magic. Applying behavioral information to personalize outbound and follow-up communications takes the entire customer experience to the next level.

Use previous social media marketing efforts as a benchmark and gauge receptivity to relevance based off those benchmarks. While this isn’t the most sophisticated form of measurement, it can directionally demonstrate the impact relevancy is delivering.

 

Social media ROI is one of the biggest challenges for marketers today. Social media measurements have a number of direct and indirect tentacles. As social media evolves into a more individualized social experience, marketers will need to determine which social media metrics make the most sense for their organization and goals.

 

Topics: Digital Marketing

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