Developing a meaningful ROI analysis has always been tricky in marketing. Social Media is proving to be even trickier. To start with, the objectives of a social media effort may be even less sales-focused than those of an advertising campaign. The objectives may be much simpler — to monitor conversations about your brand, to attempt to influence people, or to energize influencers about your brand. You could be trying to improve the responsiveness of your CRM activities.
In the analog world social networks existed and people had conversations about our brands. The difference was we rarely knew what went on or what was said. Once these activities moved online and people checked “I agree” on the terms and conditions to their social media, the veil was lifted and a digital footprint was left that yielded a dizzying array of conversational data.
As you begin to participate in the conversation, how can a business create a meaningful framework in which to monitor the results of your efforts? For starters, you need a clear strategy for what you intend to accomplish and a clear definition of what will constitute measurable success.
Listed below are some rough outlines of social media strategies and metrics for them:
1. Listening: In the analog world we called this audience research. At the most basic level we are gathering raw counts. How many people in your target audience are out there talking about your organization? How often are your competitors mentioned? Number of posts, fans, followers, and tags provide possible metrics for gauging this dimension. If people are mentioning the brand, they are aware of it, and awareness is an important dimension of brand value.
2. Sentiment: What is the tenor of the conversation about your brand? Is it positive, negative, or neutral? Are the people talking fans of your brand in a group? In the analog world we called this “attitude,” and it was a deeper dimension of the brand. There are several free tools on the Web that will gauge the sentiment of postings on your brand. If someone has built a Web site with http://www.yourbrandsucks.com/, chances are there is some bad sentiment out there.
3. Influencing: Are you creating evangelists for your brand? How many people are forwarding positive content? How many people are following and re-tweeting? How many tags and links are being added?
4. Reviews and Ratings: This starts to enter into the realm of CRM. Are current users of your product ambassadors? Are they detractors? Are they silent? Monitoring the reviews and tracking positive versus negative posts can give you an online version of Net Promoter Score.
5. Engagement: Did they link to your site? Are they creating user-generated content about your brand? Is it going viral? Are they contacting us? This is starting to enter the world of business metrics, as we are now creating leads.
6. Sales: If you have a real visionary social media campaign, is all the above activity leading to increased sales on your Web site? Can you track back sales to any of the above activities?
If you have gotten this far, you are in the realm of ROI. Now it’s time to ascertain the value of each of these activities and associated costs. When we leverage these figures, what kind of ROI figure does it produce?
Congratulations! You have created a Social Media ROI framework.