I grew up in the direct marketing industry, whose efforts live and die by measuring ROI. I learned early on that before you can begin to develop a marketing campaign, you need to get clear on the one key objective that will drive all your investment decisions. Without this objective, you have nothing to steer your planning or analytical efforts.
How do you measure your primary goal?
Step 1: Determine a call to action goal. Many marketers recognize social media as a platform for engaging customers, which is great. But that needs to be taken one step further. What is your motive behind engaging the customer? What ultimate action do you want them to take?
Step 2: Determine which social media sites will be utilized to touch the individuals or groups that will be measured. For example, Facebook, Twitter, or Linkedin.
Step 3: Determine a method for comparing the activity of the individuals or groups touched via social media tools against a same size similar sampling not touched.
Step 4: Determine costs associated with the social media efforts.
Step 5: Calculate P&L for the social media groups versus non-social media.
Step 6: Analyze the lifetime value contribution of the social media versus non social-media sampling.
I believe the challenge with measuring ROI lies in creating the methods for capturing and analyzing the data. It is a matter of getting your arms around what you want to measure and how to go about doing it. These answers won’t lie clearly in front of you, but that doesn’t mean the answers don’t exist. My experience is that you need to come up with creative ways and be willing to put some labor into the analysis.
Photo credit: Denis Vrublevski
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susan,
do you have methods for capturing and analyzing your social media data?
Molly, I am beginning to understand how to analyze the key activity that I want to measure and I have begun to create the measurement process. I am not interested in capturing and analyzing all the data because that would drive me crazy. Instead I’m focusing on one social media channel at a time, trying to learn what works best to build the channel and then understand what is working and what the channel is contributing to the business at what cost.
The challenge I have, and I believe many others probably have, too, is that we started our social media efforts without a clear goal in mind. Only very recently have we gotten clear on that. So it’s like we’re starting over again with a clean laboratory.
ROI is tough with social media. I think 1 of the biggest challenges is you can’t measure it in the early stages at all. You have to spend time developing a following and learning the methods before you can try to direct things.
Jared, the process I described was measuring the social media sites each on their own at the individual level. From that perspective, size of the following doesn’t matter all that much, but it does take time to develop the relationship with the individual and evaluate how the various responses that individual makes contribute to your goals. I agree with you that it is tough, but I don’t think it is as tough as most people make it out to be.