Why do you need to measure social media ROI?
It will never be possible to measure all aspects of social media ROI. However, this is not a good enough reason not to measure social media ROI. Currently, only 20% of marketers actively measure ROI - eMarketer Report
While it’s important to balance ROI with metrics that show more incremental value, if a business is to increase profitability, customers, and to grow, then ROI remains the critical metric and the single best measure of success over the longer term.
Start by listening
Many companies view social media as “build it and they will come”. They create channels on Facebook, Twitter and YouTube and start broadcasting their message, expecting a mass of new fans and interaction. It doesn’t happen!
Participation on social media first requires you to do research, observe and listen. Conversations are already taking place about your products, brand, competitors etc. Using a combination of both social and traditional tools, discover, listen, learn, and engage directly with customers. Allow this intelligence and insight to dictate your engagement strategies.
Develop a strategic social media plan
After you’ve taken time to discover how customers would like you to engage on social media, you now need to develop a social media strategy that will generate meaningful and real returns for the business. The 10 steps in developing a strategic social media are:
1. Align with the business
2. Discover opportunities
3. Define goals
4. Identify KPIs
5. Assign values to KPIs
6. Decide on channels
7. Determine tactics
8. Select analytics
9. Roll out strategy
10. Measure and refine
# 1. Align with the business
A sensible social media strategy is one where the social media goals align with the business objectives. Social media should become an extension of the business, brand and its values (the company mission statement is often a great place to start).
# 2. Discover opportunities
Social media can be used for a range of business activities including:
• Marketing
• Sales
• Customer service
• Research
• Analysis
• HR etc.
Within any organisation, different departments will have different goals and their associated KPIs will vary. Speak with and analyse the requirements of each department and work out what level of resource is available for social media.
# 3. Define goals
Analyse any cross-over that exists and identify any opportunities for departments to work together for mutual benefit. A business shouldn’t take on social media for all functions/departments, at least initially! To help prioritize which social media goals to target:
• Work out the suitability of social media to solve the particular challenge
• Refer back to the needs of the overall business
• Investigate the cost of not solving the problem
• Estimate and compare the potential ROIs
• Speak to and get buy-in from senior management
Next, start to define a separate strategic plan for each department.
# 4. Identify KPIs (key performance indicators)
With every goal, you will need to also identify an associated metric/s to measure the success of social media at solving that problem.
Choose a metric that’s indicative of that goal’s progress and is easy to measure. Social media evolves rapidly so your tactics may have to change later. Therefore traditional business metrics such as:
• Conversions
• Customers
• Cost
• Timings
• Satisfaction levels
are far more effective at measuring social media ROI and they will be resilient to any tactical changes.
# 5. Assign values to KPIs
Work with each department to analyse and assign a monetary value to improvements across the selected metrics.
• Some metrics will be easily available, i.e. sales
• For others, the specific department may have to do some work, i.e. customer satisfaction surveys
• Seeking improvements in one area of the business will potentially impact positively on another, i.e. an improvement in customer satisfaction will have a positive effect on sales.
• This is more proof if needed for departments to work more closely together using social media tools to drive improvement across the company, i.e. sales and customer service
# 6. Decide on channels
Investigate the suitability of each social media channel to serve the specific goals. Don’t assume that all social media channels are created equal, they’re not. Some will be more suitable depending on the particular goal, i.e. Twitter is better at managing customer service goals than Facebook.
# 7. Determine tactics
Once you have decided on the most suitable social media channel/s, you will need to determine those tactics that best serve that goal. You will be looking for examples of tactics that are proven to work.
Start with your own sector and then branch out to include related sectors or specific examples that relate to your goal/s. Search globally for the very best case studies and understand how this information might apply to your organisation and your selected goal/s. Tweak these tactics where necessary so that they will work for your organisation.
Tip: Don’t forget that all tactics will have a cost. You will need to establish and record what these costs are in order to accurately calculate ROI.
# 8. Select analytics
Next identify social analytics that are relevant metrics for each tactic.
• Prioritize the ones that are most important for the KPI followed by ones that are easiest to track.
• Capture multiple analytics as some metrics may later become a better KPI after you have had the experience of measuring and analysing the data.
# 9. Roll out strategy
Once you have finalized your strategic plan, document and present it to:
• Confirm buy-in from individual departments and management
• Add timelines and assign tasks
• Identify and provide any required training/tools/supports.
• Agree and manage roll out
Only sign off after the above has been agreed with management.
Tip: It is important to quickly resolve any teething issues as they appear. Effective time management and ownership of tasks will become critical in ensuring effective implementation.
# 10. Measure and refine
Expect to start seeing ROI after about 6 months with a 12 month period giving an accurate picture. There are two ways to measure the ROI of your social media tactics:
1. Direct results: Impacts of your social media tactics directly on your KPIs. Your website has a conversion value of $50 and you convert 2% of traffic. Every 100 visits equates to $100 in sales. You double your content output on Twitter and increase your traffic from Twitter from 500 to 1000 visits. The ROI is $500 less the cost of that tactic.
2. Impact of social analytics on KPIs: These are more fluid and difficult to measure. Taking the above example, but this time we also implement the tactic of increasing our engagement levels with followers on Twitter by 200%. This results in 1500 visits and an increase of 1% in the conversion of this traffic. Now every 100 visits (from Twitter) equates to $150 in sales. The overall ROI is $1750 less the cost of the tactics. So the ROI of engagement increase is $1250 less the cost of that tactic.
Thanks for reading our 10 steps in developing a strategic social media plan for business. How would you go about developing a social media strategy? What would you add?
Republished from TweakYourBiz.com.
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