Performance in Social Media marketing: Tweet, but don’t forget to measure!
A recent Mzinga and Babson Executive Education survey on the topic of social software in business, comprising over 900 executives, managers and individual contributors identified what they call Social Media Customer Leaders (SMC Leaders).
According to them, SMC Leaders are companies where employees “strongly agree” with the following statement within the survey: “our organization has embraced social media (like Twitter, blogs and Facebook) to improve its responsiveness to customer needs”. In these companies, it’s common for the employees to „tweet” a great deal in order to better know and understand their customers and better satisfy their needs. Further on, the researchers outline the fact that these companies have proved to attain better results in terms of sales or efficiency in meeting customer needs, unlike their “non-tweeting” peers – which they call SMC Laggards.
Without any doubt, social media is one of the hottest topics in marketing practice and businesses, both large and small, use it to leverage their marketing efforts. Benefits are obvious and they rely mainly on the “viral” characteristic that social media platforms enhance.
But what many of the companies engaged in social media marketing lack to do is measure and track the results of their efforts. According to the same study mentioned above, only 16 % of the companies in the survey said they currently measured the ROI of their social media programs.
Performance appraisal in the context of social media marketing should, in our opinion, envisage three levels of metrics covered:
- On-site behavior/action metrics, that would track the efficiency of social media programs in terms of immediate actions performed online. There are an enormous amount of metrics that could be used in this context; we mention some of them below:
# Total contributors and % Active contributors # Comments, # Bookmarks, # Downloads, # Uploads # Email subscriptions, # Followers # Average time spent on key page, # Time spent on site
- Off-site action metrics that would monitor the impact the social media program has on customer behavior in the market. These would track customer aspects such as # New customers, # Frequency of purchase, $ Average purchase value, all of these attributable to the social media program.
- Finally, it all ends up with the assessment of the returns from the social media investment. It’s not enough to measure the benefits, if not compared to the costs. The social media ROI can be calculated like in the case of any kind of investment, as the result of the value generated by the investment minus cost of investment, divided by the cost of the investment.
To sum up, in a social media program appraisal, you should measure not only the immediate impact of social media marketing, but also the financial impact that comes afterward. You’ll have to analyze the whole picture from clicks, subscriptions, comments, testimonials and so on, up to the frequency and volume of purchases and finally, the added-value and the return from the social media investment. The measurement process should have a framework that would consist not only in the metrics chosen, but also in the baseline chosen to reflect the improvement attributable to the social media program or the time horizon considered to reflect the social media impact.
Further recommendations:
For further documentation, we suggest a presentation by Olivier Blanchard on the basics of social media ROI
References:
- Wilson, H., G. (2010) “Social Media Customer Leaders: Some Early Performance Data”
- Lake, C. (2009) “35 social media KPIs to help measure engagement”
Tags: KPI in Practice, Marketing performance, Performance Measurement, Social Media performance
