Too bad I can’t record every conversation I have about performance measurement and analysis, especially as they relate to social media and social business, and post them here. Granted, we’ve had some pretty solid ones on the #measuremob podcast (see archive here), but this time around, the discussion is a) accompanied by some video (which is nice) and b) not between people who fundamentally agree with each other.
In episode 83 of the Beer Diplomacy podcast, I discuss the differences between web metrics and business metrics with Marshall Sponder, author of Social Media Analytics (Mc Graw Hill).
What you will get out of this discussion:
– The limitations of looking solely to web/social metrics to determine the effectiveness of social media campaigns and programs.
– Why web/social metrics are merely intermediate data that help connect the dots between digital activity and measurable business outcomes.
– What measurable business outcomes are, vs. web/social metrics.
– How to think about business measurement when it comes to the effectiveness of social media.
– R.O.I. is not calculated in “likes” and “follows”. It is calculated in hard dollars (or pounds or euros or yens – the same currency used in the investment part of the return-on-investment equation, in other words).
– The measurement biopsy: A simple method that any business – no matter how small or technologically-challenged – can use to test the R.O.I. of each and every marketing channel it invests in, social, digital, analog, and otherwise. This can be done as a one-time test or to monitor the effectiveness of activities and channels over time.
If clicking on the image above doesn’t take you to the video, go ahead and click here.
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And as always, if you want to learn more about how to…
– properly build a social media program for your company
– develop a social business practice for your organization
– integrate social media across all relevant departments
– establish a social business structure for your department
– manage and integrate social media activity within an organization
– coordinate social activities with outside agencies and marketing partners
– connect social communications activity to business outcomes
– properly report your metrics and analysis to the CEO, CFO and other executives
– avoid traps and hurdles common to social media / social business in the first 2-3 years of integration
… then make sure you grab a copy of Social Media ROI: Managing and Measuring Social Media Activities in Your Organization (Que/Pearson) – the definitive social business guidebook for managers and executives.
Click here for the smroi.net site (where you can download a chapter for free and choose where you want to buy it).
Click here to buy the book straight from Amazon.com
Brand Building and Online Marketing Blog 
Hi Olivier,
Well, I’m feeling pretty excited, first of all, because in the span of a few hours, I got to see you AND Marcus Sheridan moving around and talking via videos. It’s so weird to live in this world where everyone is a stationary, 2-D picture that has the same facial expression no matter what. It’s always oddly encouraging to see proof that yes, that is in fact a real person, live and in 3D.
Between you and others in the social media world, by the way, the 2 of us left who haven’t written books are not seeing a lot of encouragement out there! Yikes.
Now, as for the conversation itself, I have to say I was a bit surprised that you said that customer service departments or PR firms do not need to track social media ROi or that it would be irrelevant to them in the grand scheme of things. To me, any company using social media needs to have some idea of one thing – the time being put in. If you are paying someone to do a job and they are spending part of the work day (allegedly) doing social media work for you, you are just throwing your payroll into a black hole if you aren’t tracking that, non? It’s like the customer service departments that decide to automate or outsource. They measured the time and training it took to get real humans on the phone and decided those other options were better.
Time is the great fluffy aspect of social media that all lament but few seem to take note of. It’s an odd paradox. But if you are saying, “It’ll take however much time it takes,” you could be wasting a LOT of money if your social media representative is nutso.
Or am I missing something?
Well… It’s difficult for PR departments and customer service departments to track actual ROI because their activities a) don’t always influence sales and b) indirectly influence sales when they do.
Granted, a customer service dept can look at the cost efficiencies of shifting x% of its customer interactions from say, a toll free telephone number model to a social media platform model. If the cost was x before and y after, and y is lower than x, all things remaining equal, incorporating SM into the model can be shown to have brought a cost savings to the operation. Positive ROI: Check.
Same with PR. Say you want to do a cost per impression comparison between traditional media channels and social media channels. You may find that on average, CPI is much lower in SM than on traditional channels. Shifting some of your budget and activities from traditional to SM could also result in a cost savings. Positive ROI: Check.
Having said that, I don’t believe that PR and CustServ departments should focus a whole lot on ROI. From an operational standpoint, sure, you want those departments to be cost-efficient. But aside from that, they don’t necessarily support the sales effort. Perhaps a better approach is to frame the objectives of those departments and use SM to support those objectives. Down the line, sure, they contribute to the acquisition of new customers through discovery and WOM, and also help retain and develop existing customers by providing them with positive custserv experiences. But that’s difficult to measure effectively.
Now… measuring the effectiveness of SM on customer satisfaction, on WOM/positive recommendations, positive mentions, etc., THEN tying those to other business metrics leading to ROI, okay.
If that makes sense.
Ah, I see your point. Hmm. So is there any way, really, for a customer service department or PR firm to say, “Yeah, we’re very successful using social media!”? It seems like you’d have to get into that soft and furry territory of, “Well, our share of voice is…” which I don’t find all that reliable. Or you’re stuck trying to point to numbers – of followers, of likes, etc., which is also meaningless. Seems like quite the conundrum.
nice