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Today’s article was prompted by The Now Revolution co-author Jay Baer’s blog post entitled The 6 Step Process for Measuring Social Media. Consider the following 5 sections a complement to the social media measurement discussion in the business world. Bookmark it, pass it on, and feel free to ask questions in the comment area if something isn’t clear.

Let me explain, for anyone who is still confused about it, how to properly think about the integration of social media measurement into business measurement. This applies to the way social media measurement is applied to every business activity social media touches,  from short-term product awareness campaigns to long term customer retention programs.

To make things simple, I will make use of a few diagrams to illustrate key concepts everyone who touches social media in the business world absolutely needs to understand.

Ready? Here we go:

1. Measuring Social Media: Activity and outcomes.

The above image shows the relationship between an activity and the measurable impact of that activity on social media channels. The ripples represent every type of outcome – or effect – produced by that activity, which can be measured by observing, then quantifying certain key behaviors on social media channels. A few examples:

  • Retweets
  • Likes
  • Follows
  • Shares
  • Comments
  • Mentions
  • Sentiment

When social media “experts” and digital agencies that provide social media services talk about social media measurement, this is what they are talking about.

So far so good. The trick is to not stop there.

2. Measuring Social Media: Activity and outcomes beyond social media channels

Now that we have looked at basic “social media measurement,” let us look at it side-by-side with business measurement – that is to say, with metrics that existed long before social media ever came on the scene. A few examples:

  • Net new customers
  • Changes in buy rate
  • Loyalty metrics
  • Word of mouth
  • New product sales
  • Customer satisfaction
  • Increased operational efficiency
  • New online orders
  • Traffic to brick & mortar stores
  • R.O.I. (you knew it was coming.)

In other words, the types of metrics that indicate to a business unit or executive team whether or not the activities they have funded and are currently managing are having an effect on the business. These types of metrics are represented in the above diagram by the black ripples.

To some extent, you can also include a sub-category of metrics not directly related to business measurement but that also exist outside of the realm of social media measurement. These types of metrics typically relate to other types of marketing & communications media such as print, TV, radio and even the traditional web. A few examples:

  • Impressions
  • Unique visitors
  • Bounce rate
  • Cost Per Impression (CPI)

These types of metrics, for the sake of this post – which aims to clarify the difference between social media measurement and social media measurement within the broader context of business measurement – would also be represented by some of the black ripples in the above diagram.

3. Understanding that “measuring social media” is a terribly limited digital play.

 If you remember only one thing from this article, let it be this: Only measuring “social media” metrics, as if in a vacuum, leads absolutely nowhere. Sure, if your objective is to build a “personal brand,” boost your “influence” rankings in order to score more goodies from buzz marketing firms that do “blogger outreach,” then those social media metrics are everything. Chasing those followers, collecting likes and retweets, meeting that 500 comments quota of comments on Quora every day, and religiously checking your Klout score and Twittergrader ranking every twenty minutes is your life.

But if you are a business, that is to say, a company with employees, products, payroll, a receptionist and a parking lot, the role that social media measurement plays in your universe is not exactly the same as that of a semi-professional blogger trying to tweak their SEO and game blogger outreach programs. These two universes are completely different. Their objectives are completely different. Their relationships with measurement are completely different.

Understanding this is critical. Bloggers with no real business management experience tend to have a very difficult time bridging the strategic gap between their limited digital endeavors and the operational needs and wants of organizations whose KPIs are not rooted in Facebook, Twitter and Youtube.

It should come as no surprise that the vast majority of social media “experts” and “gurus” – being first and foremost bloggers with experience in navigating affiliate marketing programs, and a commensurate focus on SEO and social media “influence” gaming models in support of their “personal brand” – tend to see the world through that specific prism. The problem however is this: Their focus on social media measurement may be spot on when advising other would-be bloggers, but it is completely off target when advising business clients whose business models are not entirely based on selling advertising on a website and scoring goodies from advertisers in exchange for positive reviews and buzz.

In other words, when social media “experts” keep telling you how to “properly” measure social media – as if your measurement software didn’t already do this for you automatically – consider this an indication that they have absolutely nothing else to talk about when it comes to social media integration into your business. Their understanding of social media activity and measurement is entirely founded on their own experience as a blogger, and not – unfortunately – on the experience of the business managers they aim to advise, whose objectives and targets have little to do with how many fans and followers and likes they manage to collect from month to month.

One of my biggest areas of frustration for the last few years – and one of the principal reasons why social media has been so poorly integrated into the business world until now – has been the ease with which bloggers with little to no business management experience have hijacked the social media “thought leadership” world. Many of them would not be qualified to run an IT department for the average medium-sized business, much less help direct the strategy of a digital marketing department, customer loyalty program or business development group. Their understanding of the most basic, rudimentary business principles (like R.O.I.) is as painfully lacking as their dangerous lack of practical operational experience – in change management, for example – without which social media theory cannot be aptly put into practice. Yet here we are, or rather here companies are – many of which are listed in the Fortune 500, listening to bad advice from the most inexperienced business “strategists” on the planet, and trying to apply it – in vain – to their businesses.

If you are still wondering why your social media program is not bearing fruit, or if you are still confused by social media measurement, this is the reason why.

A metaphor lost in a hyperbole.

The tragic irony of the general state of confusion created by this army of so-called experts is that in spite of everything, social media measurement is not complicated. If you can type a password into a box, navigate a multiple-choice questionnaire and use your mouse to click on a “generate report” button, you too can measure social media. All you need is the right piece of measurement software, an internet connection and a pulse. You don’t even need to know how to send a tweet to do it.

I am not kidding. A monkey could do this.

The sooner business managers, company executives and agency principals stop listening to social media douchebags, the faster social media will be integrated (smoothly and effectively) into everyone’s business models. Don’t limit yourself to measuring social media. Stop listening to business advice from bloggers with no business experience. And don’t buy into the notion that because social media is new and digital, it is complicated. Social media is easy. Social media measurement – by itself – is easy. It takes work and diligence and clear vision, but all in all, it doesn’t take a brain surgeon to figure it out.

4. Once you get rid of the monkey noises, you make room for the simplicity of the (social) business measurement model.

The above diagram illustrates both the measurable social media outcomes (in orange) and the measurable business outcomes (in black), based on an activity (the solid orange ball). We have covered this earlier in this article. By now, you should understand two key principles:

1. Measuring only social media outcomes (or measuring them separately from business outcomes) won’t get you very far. It’s what you do your first month. Then what?

2. Only by establishing a relationship between social media metrics and business metrics will you be able to gauge both the impact and value (including but not limited to R.O.I.) of social media on your campaigns, programs and overall business.

How you connect social media outcomes/metrics to business outcomes/metrics is covered elsewhere on this blog and of course in the Social Media ROI book, but if this diagram doesn’t confuse you, try to conceptualize the relationship between social media outcomes with business outcomes by observing the intersect points between the orange ripples and black ripples. (See above diagram.) Your investigation of the correlation between the two will always begin there.

5. One final tip: Turning your integrated measurement model into a social media tactical plan.

These diagrams only serve to illustrate how you should think about social media measurement in conjunction with business measurement. That’s it. But if you take a step back and look at the interaction between social media outcomes (measurable behaviors in social media channels resulting from a specific activity or event) and measurable business outcomes (measurable behaviors resulting from a series of activities and events), you can start to work your way backwards from outcome to activity, which is to say from measurable behavior to behavioral trigger.

By looking at the impact that certain activities (triggers) affect consumer behaviors (mentions, retweets, purchasing habits, word-of-mouth, etc.) you can begin to gauge what works and what doesn’t. Integrated measurement of both social media and business metrics in this context – as a tactical real-time diagnostic tool – is far more valuable to an organization than a measurement practice that solely focuses on reporting changes in followers, shares and likes. This illustrates the difference in value between a truly integrated measurement model and a “social media measurement” model. One produces important insights while the other merely reports the obvious.

I hope that helps.

*          *          *

Three quick little announcements in case you are hungry for more:

One – If you haven’t read “Social Media ROI: Managing and measuring social media efforts in your organization” yet, you will find 300 pages of insights with which to complement this article. It won’t answer all of your questions, but it will answer many of them. If anything, the book is a pretty solid reference guide for anyone responsible for a social media program or campaign. It also makes a great gift to your boss if you want him or her to finally understand how this social media stuff works for companies.

You can sample a free chapter and find out where to buy the book by checking out www.smroi.net.

Two – If you, your agency or your client plan on attending the Cannes Lions from June 19-25 and want to participate in a small but informative 2-hour session about social media integration, measurement, strategy, etc. let me know. I just found out that I will be in Cannes during the festivals, so we can set something up – either a private session, or a small informal discussion with no more than 6-7 people. First come, first served.

You can send me an email, a note via LinkedIn, a Twitter DM, or a facebook message if you want to find out more. (The right hand side of the screen should provide you with my contact information.)

Three – If the book isn’t enough and you can’t make it to Cannes later this month, you can sign up for a half day of workshops in Antwerp (Belgium) on 30 June. (Right after the Lions.) The 5 one-hour sessions will begin with an executive briefing on social media strategy and integration, followed by a best practices session on building a social media-ready marketing program, followed by a PR-friendly session on digital brand management, digital reputation management and real-time crisis management, followed by a session on social media and business measurement (half R.O.I., half not R.O.I.). We will cap off the afternoon with a full hour of open Q&A. As much as like rushing through questions in 5-10 minutes at the end of a presentation, wouldn’t it be nice to devote an entire hour to an audience’s questions? Of course it would. We’re going to give it a try. Find out more program details here. Think of it as a mini Red Chair.

The cool thing about this structure is that you are free to attend the sessions that are of interest to you, and go check your emails or make a few phone if one or two of the sessions aren’t as important. The price is the same whether you attend one or all five, and we will have a 15 minute break between each one.

The afternoon of workshops is part of Social Media Day Antwerp (the Belgian arm of Mashable’s global Social Media Day event), and I can’t help but notice that the price of tickets is ridiculously low for what is being offered. The early bird pricing is… well, nuts. Anyone can afford to come, which is a rare thing these days. (Big props to the organizers for making the event so accessible.)

The event is divided into 2 parts: The workshop in the afternoon, and the big Belgian style party in the evening. You can register for one or both (do both).

Register here: Social Media Day – Antwerp

My advice: Sign up while there are still seats available, and before #smdaybe organizers realize they forgot to add a zero at the end of the ticket prices. 😀

Cheers,

Olivier.

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