Metrics

Measuring the cost effectiveness of social media is difficult; knowing what to measure and how to measure it are two of the biggest dilemmas within social media marketing. SMM is more aligned with public relations than traditional marketing in that social media marketing is primarily based in interactions, not quantifiable metrics. However, ROI can still be counted in terms of visitors, click throughs and many of the same metrics used for websites. It is important to also implement other metrics that are more qualitative in nature, such as the number of new ideas generated, customer comments and overall participation within a social community.

Since social media is relatively new to the world of business analytics, determining a dollar amount to account for ROI can difficult with social media. Many people are just becoming familiar with social media; they may or may not understand the purpose of an RSS feed or know why they should become a fan of your Facebook page. With social media, the ROI is based more in value than monetary terms. You can count the number of new “friends” within a certain timeline to determine a quantitative measure; however, you can also analyze the participation level (i.e., posting a product review, offering advice to another community member, etc.) of those “friends” within the same timeline to gain a qualitative measure of audience participation.

To quantitatively measure the effectiveness of social media programs, you can utilize tools such as Google Analytics, Feedburner, Xinu and AideRSS. Some programs, such as the WordPress blogging application, have metrics built into the application. For applications built into the company’s website, appropriate tracking measures will need to be included in the programming. These metrics will provide a quantitative baseline to begin determining ROI. Qualitative metrics will need to be determined prior to launching the application and be based on each social media outlet being used and the objective(s) to be achieved within that particular outlet. For example, a blog will require a different value scale than re-tweets on Twitter. An RSS feed will generate a different value than a new fan/friend on Facebook.

Many of social media outlets are provided for free or at a minimum charge. Some tools offer additional or upgraded widgets and metrics that may be added on for additional costs. Overall, the primary costs associated with social media are the sweat equity and personnel time used to maintain, participate and train others in the social media sphere.

Overall, measuring the effectiveness of a social media campaign will be difficult and sometimes non-traditional. Throughout the year, the applications used may need to be analyzed and repositioned to accommodate for evolving online trends and emerging qualitative metrics.

In the Beginning…

Prior to launching any social media application, it would be helpful to survey a sample of employees, distributors and clients to determine:

• who is using social media
• which sites/applications they prefer
• what types of information/connections are they looking for
• how often they access their social media accounts
• what times they are most likely to be online.

Social media needs to be a company-wide project with IT fielding tech questions, Sales generating leads and Manufacturing/R&D getting customer feedback to improve/develop products. Through social media training, employees can better understand the roles of others in the company and present a unified company persona to the public. However, the company will also need to invest time in training internal users in the use, protocol and etiquette of social media marketing; it is the company’s responsibility to establish purposes and clear guidelines for when/how/by whom the tools are to be used. If other departments understand their role within the organization’s online community, they will be more likely to participate and become a more valuable resource to external users.

Social Media Overview, Part II

Businesses rely on supply and demand to generate revenue. But today’s customer is much more technologically advanced than those of the past. Customers rely on the opinions of others and their ability to talk to the company from whom they are purchasing items. Word-of-mouth marketing has become a driving force in brand recognition and product/service purchasing. These interactions are at the forefront of social media marketing.

Social media is about making connections with people – customers, vendors, the general public. In order for social media marketing (SMM) to be effective, you must listen and participate in online conversations. You must be authentic and transparent. You must be actively engaged in your online community.

● Social media marketing is not another advertising vehicle.

● Social media marketing is not about displaying your logo.

● Social media marketing is not about pushing your product at every possible opportunity.

● Social media marketing is not about setting up a fan page on a social media site and waiting for others to find you.

Companies need to become actively involved in the SMM process to avoid “talking at” their customers. By listening to consumers, using consumer feedback in decision making, and actively participating in the consumer’s world, companies can become more personable and less “promotional pushers” in the eyes of the consumer.

It is no longer acceptable to be a follower. In order to be successful in today’s global economy, businesses need to break traditional molds and look for innovative ways to reach their audiences and generate more awareness of their brands. Social media marketing relies on word-of-mouth marketing to generate a buzz around a company and its products/services. That is not to say that SMM is replacing traditional marketing strategies and tactics. Any comprehensive marketing plan needs a strong mix of traditional and Web 2.0 strategies and tactics in place.

Most companies invest 2-10% of their overall marketing budget towards social media or “innovation funds”. Instead of waiting for consumers to come to you, the organization should go to their customers. It is the organization’s responsibility to provide the tools needed for their consumers to engage and interact with the company and community-at-large. User-generated content and social networking enable companies to talk to their target audiences while the members of that audience talk to each other. Through user-maintained profiles, companies can gain valuable demographics that can be used in future campaigns, by the sales staff, or by R&D to develop/reconfigure products.

Many organizations fear the perceived loss of control over marketing and public relations when it comes to SMM. It is not a matter of losing control. It is a matter of directing your audience to leave feedback in a monitored environment that you can control (at least somewhat). Deleting negative comments does not erase issues; often deletions make the company seem less trustworthy to consumers. Companies should not fear negative comments or critical feedback. They should view them for what they are: constructive criticisms that should be analyzed and used in future decision making. A monitored environment allows organizations to focus on and respond to consumer complaints without the consumer posting negative information on other external (unmonitored) forums. Often times, other consumers will come to the defense of the company. This consumer-to-consumer trust holds a much stronger bond than business-to-consumer relationships.

In turbulent economic times, SMM becomes an increasingly beneficial resource. The most obvious benefit is the relative low-cost/high reach of implementing social media tactics. While consumers are less inclined to buy high-priced products, they are willing to engage in discussions. SMM can help retain customers while nurturing prospecting customer relationships. Those who choose to make purchases are more inclined to buy from companies they know and trust – and those companies who come highly recommended by other customers.

Social media marketing provides the tools and guidelines for actively engaging with your consumers. Social media is still an emerging communication vehicle, but organizations like the Blog Council are working to develop standards and practices that can be utilized by individuals and corporations.

Companies should consider the following statistics when planning a social media campaign.

• 93% of social media users believe companies should have a social media presence
• 64% of consumers want to see user ratings and reviews
• 84% would trust user reviews over a critic
• 59% of consumers interact with companies via social media
• 1 in 4 individuals interacts with companies more than once a week
• 85% of the 18-34 demographic regularly use social media
• 63% of Chief Marketing Officer’s (CMO) plan to increase in their interactive and digital marketing budgets (social computing, blogging, podcasting)
• 59% of CMO’s were planning to decrease their traditional budgets
• 94% agreed with the statement: “A tough economic period is precisely the time when marketing plays a key role.”

Corporate Successes and Misconceptions

However, with the proliferation of social networks like MySpace and Facebook, it seems that social media marketing would be a natural progression for most companies. However, with the abundance of social media tools available, the lack of “standardized” metrics, and the misinformed beliefs about social media, many companies are skeptical to move into new territory. Others, such as eBay and BestBuy, have embraced social media and seen a profitable return.

When eBay launched communities for their buyers and sellers to share tips and tricks, they found that those eBay members who actively participated in those communities bought more, sold more, paid higher prices and returned 50% more revenue to eBay than those who did not participate.

When BestBuy tried to develop communities to get feedback from their 160,000 employees as to how well in-store marketing programs and advertising campaigns were doing, they found unexpected benefits like an increase of 30% in 401K sign-on, better knowledge sharing and problem solving between store employees and a new channel for business innovation.

With increasingly busy lives, people are looking for more accessible and customizable means of getting information. They want information in short bursts in an easy to use/read/apply format. To meet their demands, companies should not try to pull an audience to them, but instead go to the audience. There are several potential downfalls that companies need to be aware of…just google “social media mistakes” or “social media misconceptions”. The sheer number of “mistakes” and “misconceptions” demonstrates the need for research and planning in social media campaigns.

1. The customers will do the work for us. If a company focuses too much on tools and metrics, the audience will notice. Social media is customer-focused and often customer-driven. Before releasing a social media program, the site should be pre-populated with valuable content and knowledgeable, trained internal users, and a clear plan for what the audience needs/wants to know.
2. Build your own platform. With the number of social media sites increasing everyday, there is no reason to create your own platform. Users do not need or want to jump from one niche site to another to obtain information; they want everything condensed, accessible and centrally located. By using popular technologies, you increase the number of potential users and eliminate the need to learn a new platform.
3. Say the wrong thing. Everything you say on social media is public. Even when deleted, that mistake will not go away. Reaction and distribution are immediate in social media, and what seems to be a small error in judgment can become front page news in a matter of minutes (literally). Through properly training and selecting key representatives, a company can limit the potential for judgment errors and prevent bad publicity.
4. Social media echoes. Unlike mediums that can easily be deleted/discarded and forgotten, social media is constantly spreading. A post on Twitter may be read on another person’s blog or in an RSS feed for a national news outlet. A company who deletes negative comments can rest assured that the comment will be reposted on another site along with a reference to the company’s policies on ignoring/deleting negative commentary. In the online world, nothing is truly erasable. Once your words are out in the social medium, you need to own them and be accountable for the repercussions.
5. Don’t be a promotional pusher. Companies that push their products onto the audience or those that don’t engage in a transparent manner will not succeed in social media. Audiences are not looking for more advertisements. They’re looking to voice their concerns as well as their praises. They’re looking for filtered information and a real person to answer their questions. Promotional pitches are frowned upon in social media. The consumer wants to hear stories about the company, its people, its successes and its philosophies. Product advertising should be saved for traditional marketing campaigns.