Social media is no longer seen as a fad, and most businesses are now including in their online marketing mix social media marketing strategies. Small or large brands have their own Facebook Fan Page, few Twitter accounts, a blog and strong presence on various other social networking sites. But how do you find out if your social media strategy is effective? Return on investment (ROI) is what most would like to look into as to measure their social media success. But it seems to be very difficult to capture the right metrics of your social media campaign and transpose them into ROI. In one of our prior posts, we have analysed the most important metrics one should monitor from social media. We were mentioning there: Visitors and Sources of Traffic, Level of Engagement & Bounce Rate, Membership on Social Network & Activity Ratio, Brand mentions in social media, Conversions, Loyalty and Blog interaction. However, these metrics don’t make the process of measuring ROI easier. This topic has been recently highly analysed by social media experts. Some have gone so far as to say it is impossible to measure ROI, others have concluded it is a mistake to try to put Social media and ROI together. Nevertheless, we would like to suggest few steps that would make your ROI measurement easier:
1. Define Your Goals! Clear goals should be the first thing to consider when deciding to create your business an online presence. A coherent and distinct idea of what you are looking to achieve through your social media strategy will make it easier for you to decide which are the key performance indicators you need to follow throughout.
2. Design Your Plan! Once you have decided which are your goals, your next step is to design a strategy. You need to always keep in mind how your strategy achieves your objectives. Choose the right channel (make sure you know how to measure the effectiveness of those channels), the right message and the right form.
3. Implement Your Strategy! You have decided what you want from your social media strategy, how you will achieve itnow it’s time to actually do it! As you will soon notice, plans and reality don’t always go hand in hand. You might need to adjust your strategy on the way as to improve it.
4. Use The Right Metrics Tools! You know your metrics, but to get it right, learn about the right tools. Make a habit out of using tools such as Google Analytics, Omniture, HootSuite analytics and PostRank analytics. Throughout time put together the data you need to measure as to see the evolution on a weekly/monthly/yearly basis.
5. Include Sentiment Analysis! Because social media is all about communication, online reputation management and the attachment your brand gets from your fans, sentiment analysis should be included in the data you’re gathering to later on analyse your ROI. Again, make sure you are using the right tools to analyse! The accuracy of the results influences the decisions you will make regarding your business. Some of the tools are: Sentiment Metrics, Viral Heat or Tweet Feel.
6. Gather Your Data! Now that you have the data, put it together and see how it correlates to your level of sales, customer retention or new customer acquisition. It’s not an easy task, but it’s not impossible either. If you know from the very beginning your goals and metrics you want to focus on measuring, you will be able to measure the results from your ROI.
According to a survey carried out by Mzinga and Babson Executive Education in August 2009, 84% of social media programs don’t measure return on investment. However, most businesses have integrated social media in their online marketing strategy. What are your thoughts on measuring impact of social media through ROI? Have you tried it? If yes, how did you do it?