What’s the payoff? The inescapable social media question that makes many squirm and continues to provoke much debate with little answer. There are really two issues here: 1) In order for something to be relevant in business, you must be able to demonstrate a positive, measurable outcome, and 2) the challenge with measuring most marketing endeavors is that they are done in isolation.
Let’s take the second issue first … looking for an ROI from social media seems to be artificial. Artificial because social media is about tying together all the synergies of your product/service and company. The technical definition of ROI is (Sales – Investment) / Investment. Can you really measure investment and sales in isolation with social media? Doesn’t sales success depend upon so many other things including the value of your product/service for a sizable target market, the degree to which your product/service solves a problem or addresses a need or desire, customer support, differentiation relative to the competition, effectiveness of paid media, and many more? Social media will never be powerful direct sales vehicle, BUT it certainly can help increase awareness, lead generation and ultimately lead to sales increases if other attributes of your company, product, and service rank high.
So if I am stating that social media ROI can not be isolated in evaluation, how the heck are we ever going to know that we are getting bang for our investment buck? To answer this, I have been emphasizing the need to look at social media key performance indicators (KPIs).
About 18 months ago, I introduced the Social Media Marketing Funnel and the original write up is worth taking a gander at. Now others have argued that the sales/marketing funnel is obsolete. Some look to replace the traditional funnel with a viral funnel.
Others, such as David Armano from Edelman’s, interpret new media giving way to “The Marketing Spiral.” To me, these are all variances and metaphors for the cyclic, word-of-mouth nature that social media fuels. I prefer to stick with the traditional approach, BUT add two new stages of “loyalty” and “advocacy” as subsequent attributes post sales as well as a feedback loop spawned by advocates to refuel the funnel. In essences, you really get a traditional funnel and viral funnel bolted together. Here is my original Social Media Marketing Funnel.
Now all marketing efforts require metrics, and there are no exceptions for the Cyclic Social Media Marketing Funnel. So I have now added a fourth column indicating what should be measured for each of the funnel states as shown below.
You typically gain awareness off your site. If someone is on your site, they are probably already aware of your brand. Thus, awareness can come from mentions elsewhere, sites you do digital PR and outreach to, and URL mentions in tweets, Facebook, and the whole social web. Often these parameters that you need to measure come from advocate activity, but you can initiate them as well.
So once a number of individuals become aware of your brand, they’ll want to check you out for consideration. Consideration can be just wanting to get more information or viewing more of your content. Content that is on your site. Measure both the number of visits and the extent to which your content is being viewed (pageviews). While you look to increase both these areas, an increase in the number of pageviews per visits is a real telling number – shows you are attracting the right audience and the degree to which they value your content.
Measuring Conversion – Sale
Now the next stage, conversion/sale, is the one area that I suggest is not great for social media. I have long professed that you should not sell with social media and that customer engagement and building relationships are best. Yes, engagement and relationships lead to sales, but that is a residual effect. Your social activities should not be direct sell activities. But if from time to time (and do not go over board here), you offer promotions, you can use tracking codes to measure this activity. For the most part, I really shy away from recommending sales call to action with social endeavors.
Now remember – the sale is not crossing the finish line. You want to build a loyal set of customers and turn some of them into advocates. Loyal customers will remain engaged with your brand. They will write comments, interact with your social presence, and sign up for your community and Facebook page or follow you on Twitter. While raw numbers of fans and followers by itself is not so telling, looking at these individuals AND looking at their interactions as fans and followers is a very positive indicator.
Engagement is very good to see, but having individuals that actually market your brand (word of mouth marketing) is the pinnacle of success. This can be measured by retweets, reblogs (Tumblr environment), active promotions or mentions, and generally anything put out in the social sphere that has positive sentiment.
The Cyclic Social Media Marketing Funnel serves as a solid model to use to plan your INTEGRATED social efforts. Integrated with other marketing and sales activities. Make sure you not only plan and execute the various stages for the Cyclic Social Media Funnel, but you also MEASURE each of these stages and their activities. Looking at an individual weekly or monthly number really does not matter. Don’t sweat the small stuff. What you want to look at is trending over a period of time. Are you increasing these areas by some normalized percent over a period of say 6 to 9 months? While I have defined KPIs for each of the stages that give you an indication of the degree of success of your social activities, remember that your predominant measurements should be on your integrated marketing efforts.
What do you think?
Make It Happen!