Most organizations have added social media efforts to their marketing and service strategies, but many haven't a clue as to how to calculate whether their investments in these new channels are worthwhile.
The problem is, without measures in place companies are unable to make effective decisions about social media marketing investments.It is only by recognizing all of the benefits delivered by social media marketing that the complete value of these efforts can be understood.
While measuring the value of a company's complete social media efforts is critical, industry experts point to a lack of channel integration, organizational silos, and confusion about who within their organizations owns social media, as reasons that prevent companies from successfully measuring their social efforts.
Justin Schuster, vice president of enterprise products for MarketTools, says that he definitely sees customers struggling with how to measure social media. "It can be terrifying for businesses, he says. "In a lot of ways, it's a conversation. Conversations are fundamentally hard to measure."
In Forrester's recent report The ROI of Social Media Marketing, Senior Analyst Augie Ray says that the demand for marketers to measure the benefits delivered by their social media efforts has never been greater. He recommends using a social media marketing balanced scorecard, which involves four different perspectives:
- Financial: Has revenue or profit increased or costs decreased?
- Brand: Have consumer attitudes about the brand improved?
- Risk management: Is the organization better prepared to note and respond to attacks or problems that affect reputation?
- Digital: Has the company enhanced its owned and earned digital assets?
Data integration from feedback, as well as an integrated view is also essential, according to Lisa Arthur, CMO at Aprimo. She says companies can't measure the effectiveness of their social network if they're measuring it within silos. "If it's only relegated to marketing, it's very myopic," she says. "As organizations, were not becoming customer centric in that model; we're becoming departmentally focused. At some point, the silos need to come down outside of marketing and the whole organization needs to get an understanding of the power and success social media affords us."
Arthur explains that successful social media analytics boil down to being able to manage the social projects and their costs. "It's not, 'I got 50 clicks on a Twitter post,' but 'What did it take to get that?,'" she says. "Content and posts are inextricably linked. That's the winning strategy. Being able to manage that content and account for that in the overall spend."
Greg Marek, senior director of corporate marketing at MarketTools, echoes Arthur. He adds that he sees more customers analyzing their social efforts to ensure they properly allocate resources and investment dollars for their overall business objectives. "They're basically using social media to go deeper into customer insights to make sure they're making the right bets," he says.
"It's driving businesses to make sure all aspects of the experience are at a higher level," Schuster adds.
Larry Weintraub, CEO of Fanscape, says some companies are trying to calculate the value of engaging with specific customers through social media. "We're saying, 'It's not about the number of [page views]; it's about the quality," Weintraub says. "We understand there needs to bea better ROI on the dollar we spend. It's a tough thing to do. It's something everyone in social media wants to [measure]."
Weintraub recommends tracking such factors as the number of followers, the number of conversions from social media, the cumulative profit from converted customers, and the value of the followers. But, he says, the value of social media comes down to common sense. He likens customers who click on a company's Facebook page to them walking into a store. "If you treat them well and they like your product, they will come back more and more," he says. "If they come to your Facebook page or Twitter, treat them with the same respect and make them feel appreciated."
Rosetta Stone's Jay Topper, senior vice president of customer success, says that the company is analyzing the top- and bottom-line impact of its social media efforts, which includes Facebook and Twitter for service, as well as blogs. He explains that Rosetta Stone, with the help of Parature, analyzes the number of customers who got resolution and the time to resolution, and then marries those people back into its CRM system to see who else they're engaging with at Rosetta Stone.
Topper says despite its efforts to track results, metrics gleaned from social media bear no impact on the company's decisions. He says, "[Social media] is enhancing our brand and serving our customers in the way they want to be servedperiod."