The following is an abbreviated step-by-step guide to measuring social media ROI.Step 1: Define Goals & Success Metrics
The first step of ROI measurement is defining your goals. What do you hope to accomplish by being active in the social space? One problem is that brands launch social campaigns without clearly identifying or understanding their goals, which makes measuring success difficult (if not impossible).
Here are a few examples of social media goals:
• Expand brand or product awareness
• Increase engagement with brand
• Generate qualified leads
• Drive sales
• Build community
• Create brand advocates
• Qualify fans and convert them to customers
• Improve customer satisfaction
• Establish company as a thought leader
• Attract talent
Once goals have been defined, the next step is determining the appropriate success metrics that align with these goals. For example, if a goal is to increase brand awareness, metrics might include the volume of online discussion or “buzz” about your brand, the level of audience engagement (re-tweets, comments, posts, video views), the number of fans, followers, etc. and the number of user impressions.
The following are examples of social media success metrics:
• Volume of online “buzz” about a brand
• Volume of positive sentiment
• Number of fans, followers, readers (or number of high-quality/targeted fans)
• Engagement (number of video views, duration of views, time spent on the company blog site, time spent playing a company’s branded game application, etc.)
• Volume of user comments posted to company blog, profile or posted content
• Retweet or peer-sharing statistics for related content and posts
• Comment or retweet resonation (number of user comments multiplied by
how many followers or friends each user has)
• Media coverage
• Media impressions (mentions on blogs or other media multiplied by the size
of the audience)
• Quantity of new or qualified sales leads (referred from social sites)
• Website Referral Traffic (from social sites)
• Advertising click-through rates
• Volume of customer service issues handled
Step 2: Establish a Baseline
In order to effectively measure success, make sure to first establish a baseline by determining your current position within the social landscape. For instance, if your goal is to increase awareness and you will be tracking the amount of “buzz” or mentions about your brand, you must first know what the current levels are before taking actions to reach that goal. Without establishing this baseline, it’s difficult to accurately show ROI.
There are a variety of analytics tools available to help with social media measurement. I won’t go into too much detail here (there are dozens of options), but a few of these include Google Analytics, Social Mention, Viral Heat, Scout Labs, Radian6, and Listen Logic. These tools can be used to gather key social media metrics and help you identify strengths and weaknesses of your social presence.
Step 3: Measure and Track Success
After you launch your social media program, begin the measurement process to track success. Gather the success metrics from your analytics tools and start to see how (or if) they correlate to higher sales, increased customer satisfaction, website traffic, store traffic, etc. Try to identify trends where possible. Does positive consumer sentiment or an increase in chatter about your brand lead to higher website/store traffic, leads or sales? Recognizing these trends and identifying their point of origin is key in measuring social media ROI.
(Image Credit: "Basics of Social Media ROI," by Oliver Blanchard)