Social media provides relationship-driven benefits to a business once done right. But many of these benefits aren’t tangible. How do you sell this to your CMO? The key to measuring the ROI of social media correctly is to deploy a balanced 360-degree approach aimed at unlocking the true value of social media throughout the customer lifecycle.
A recent study by Bain has showed that:
- Customers who engage with companies over social media spend 20% to 40% more money with those companies than other customers.
- Social media fans also demonstrate a deeper emotional commitment to the companies, granting them an average 33 points higher Net Promoter score.
Unfortunately, metrics like these can only be measured accurately in the long run, with significant investments in market research. And in this day and age, when any business tactic that is ever-so-slightly ‘undatalicious’, it gets the BIG NO-NO from executives. It’s our job, as marketers, to come up with creative proxies to articulate the value of your social media efforts in the interim.
Some simple questions to get you started:
- Do you tag the links you publish on Facebook/Twitter, then use Google analytics to track goal visits? Have you considered assigning monetary values to quantify these goals?
- Do you use Facebook Insights/Twitter Analytics/YouTube Insights to understand engagement around your profiles? What kind of content resonates better with your audience?
- Do you compare behavior of social media traffic to traffic from other sources? How does engagement KPIs such as “average time on site” and “pages viewed per visit” compare?
The fact of the matter is that measuring ROI for social media is far more complex than for its digital siblings: Paid Media, SEO and Email. And this complexity naturally puts social media at a disadvantage in the eyes of ROI-driven executives.
So, if you feel your investment in social media is not reflected in the results you have measured, adapt, improvise and keep measuring.
Another way to measure social media is Influence. But like ROI, influence cannot easily be measured numerically.
It is said that the debut Velvet Underground album titled “The Velvet Underground & Nico” only sold 10,000 copies, but everyone who bought it formed a band. The influence of Velvet Underground on music greatly exceeded their sales figures.
This thought applies directly to social media marketing today. A small regional hospital’s Facebook page is most likely not going to attract 500K + fans, however, if it can create the right type of followership, it can position itself as a thought leader in healthcare, within the community it serves.
There are tools such as Klout, Twenty Feet and Crowdbooster that help you get started with gauging influence but this science is in its infancy, with serious limitations. You should only use these metrics directionally, especially if you are not a national or international level player.
So time to re-think how influential you are as a brand. And more importantly, what’s your Return on Influence?