Posted by: Ashley F | Posted on: July 1st, 2013 | 0 Comments
Last week we took a look at the value of social media engagement the
Social Media Today webinar “Tying Tweets to Profits: Can 140 Characters Deliver ROI?” brought to our attention. Now that we’ve explored the intrinsic value social media creates for businesses, how do we measure it? There are many factors that impact determining social media ROI such as, whether or not you can directly or indirectly measure it and how effectively a business is using various platforms.
According to Hootsuite Sales Engineer, Kemp Edmonds, only 25% of social media ROI is directly measurable. Edmonds says the other 75% is indirectly measured because it is attributed to brand awareness, reputation value and customer satisfaction that is difficult to put a number on. According to Edmond, the direct return on social media relies on savings and sales. Let’s take a look at the ROI we can directly measure:
- Customer service savings – When it comes to savings, Edmonds uses a statistic from a Nielsen-McKinsey survey on social service featured on the Harvard Business Review. According to the results, “it costs less than $1 per interaction on social media whereas telephone care is typically at least $6 per call.” Edmond makes the point that when it comes to customer service, social media saves you money per interaction
- Engagement and conversion – Having followers is great, but in order to measure your social media ROI, you need to have engagement. According to a Twitter metric that Edmonds shared, you receive $2 per click compared to $0.01 you receive per follower, so a heavy emphasis on engagement is placed when looking at ROI. In terms of sales, you can measure the direct return of engagement and conversion. The example Edmond gives us derives from end to end ROI tracking metrics on Hootsuite. Tracking the links that are shared through multiple social platforms can be measured by the clicks that lead to the conversion rates
In addition to Edmonds’ approaches to ROI and what he measures, Ric Dragon shares his approach to social media ROI with us as well. Dragon focuses on the fact that you must use social media effectively and consistently in order to measure outcomes. Dragon claims SEO, advocacy and transferring online relationships offline can help businesses measure their social media ROI:
- Search Engine Optimization (SEO) – To increase your marketing lift, you need SEO to drive prospects to the point of conversion. When it comes to using social media effectively and consistently, you can increase your presence on search and measure those opportunities
- Advocacy – A call to action differs from one business to another but is important for all. For example, maybe your call to action refers to wanting more blog views so you set up an influence metric to measure this and find out the number of people who visited your blog that converted to your website to make a purchase
- Online to offline relationships – Instead of cold calling to pitch sales, bring your strong social relationships offline to close a deal. Set goals in order to build community, and then measure your efforts. For example, Dragon said you should help five people a day in your community, engage in your community for at least a half hour a day, join three Twitter chats a week and then set up a face-to-face meetings with a prospect. Building a relationship with someone before selling will add the benefit of trust and result in a better chance of closing a deal
Social media ROI is there. It’s in the intrinsic value it creates for your business and although measuring this value may be difficult, it is becoming more quantifiable as experts like Edmonds and Dragon uncovers different types of metrics and models to go by in order to achieve quantifiable measurements. Approaches to social media ROI will continue to evolve as we see technological improvements each day.
Is your business using any of these approaches to effectively measure social media ROI? Do you have any other interesting metrics to share? Please share with us in the comments below!