Wiring In Social Media Measurement
Posted in Fun stuff on January 22nd, 2010 by @mikey_pants
Businesses that struggle the most with measuring social media are the ones that struggle with measurement, period.
Social media isn’t harder to measure than any other area of business. It’s harder to prove causality, but then again, direct and independent causality is awfully hard to prove for any singular event that impacts a sale. Sure, you can track your direct response codes all you want, but you can’t tell me definitively that the advertising you did, or the relationship that person had with Bob the Sales Guy, or the article than ran in the New York Times didn’t also have an effect on that eventual decision.
But I digress. Back to the point.
What Are You Measuring Now?
My sense is that if you’re a company that’s in a measurement frame of mind in the first place, you’ve managed to measure and quantify (or qualify) something that you’re doing. For instance:
- What’s the conversion rate of your e-newsletter subscribers to actual prospects or sales?
- What’s your resolution time on customer service calls?
- What’s the cost of having a human resources department?
- What percentage of your customers renew after the second purchase?
- How do you calculate your customer satisfaction, and what is it currently?
- What return do you get on your advertising dollars, direct or implied (and which is it)?
- How do you justify your investment in your IT department and infrastructure?
- What is your return on training materials or continuing education for your employees?
Guessing that the last two might have thrown you a bit, but these are legitimate measurements, too, aren’t they? We often term measurement as only having value when it relates to dollars in, but I’d venture to say that measuring (and justifying) dollars out is important. After all, if you know your stuff about the actual calculation of ROI, you’ll agree completely.
If, however, you don’t have an answer for anything above or anything that looks like those things, you probably need to improve the practice of your measurement to start with.
Measurement Needs Infrastructure
I’m going to put this simply. If you’re not already rigorously applying measurement (i.e. justification) standards to other areas of your business – on both the cost and revenue side – you can stop blustering about needing measurements for social media specifically. Why? Because you’re not equipped, and you don’t have a discipline of measurement upon which to build.
Measuring things properly takes, at least:
- Time: In terms of man hours to actually do the gathering of data and the further analysis of it, over a period of time that can actually provide context and account for trends and anomalies.
- Tools: The ability to capture, aggregate, and correlate the data you wish to measure, whether that’s a spreadsheet or a more complex software application.
- Humans: One metric alone means little. You need people to draw relationships and correlations between the data points that indicate progress toward the goals you’ve set. Few machines alone are capable of such insights and conclusions. Those people also need to report back their findings and offer recommendations for acting on them.
It’s staggering to see how many companies are demanding measurements and some mysterious definition of ROI for social media that can’t even tell you their conversion rate on various website properties, or the retention rate for their customers. Please stop demanding something you’re not prepared to do as a matter of business, and as a cop-out for not implementing a strategy that is unfamiliar to you.
Start With What You Know
You might think you need to develop and invent a whole new set of metrics to illustrate how social media impacts your business. Sometimes, that might be true or valuable, because there are things we can measure now that we couldn’t measure easily before. For example, I’m particularly bullish on the potential for metrics like Share of Conversation.
However, if measurement of the new stuff confounds you, start with what you know. Figure out how social media activities and participation impacts and influences the metrics you already use.
For instance, when you launch your blog, do your email newsletter subscriptions go up? If you know the average conversion rate of those subscribers (and perhaps their average value as a customer), you’ll be able to correlate the increase in your blog awareness to those subscriptions. Are they the only driver? No. Can you map the two together over time and see if they rise proportionally to demonstrate impact? Absolutely.
If your call center costs you $5 per incoming issue and you deploy a DIY YouTube help series or a Twitter team to triage in the social media realm, watch your daily call volume. Does it drop over a 30 day period in conjunction with those efforts? How much time and manpower does that Twitter team or video series cost you overall? Line up that investment against the drop in call volume by $5 per call, and see if you end up in the red or in the black.
It Doesn’t Have To Hurt
Measurement doesn’t have to be arduous and painful. It should be something you can stream into your daily or weekly processes. Remember that the goal isn’t the measurement itself, but the insights you get out of doing it. Keep it straightforward, simple, and utterly tied back to the goals you’ve set for yourself. (Start over here if you need help setting measurable objectives).
Make measurement a part of each department or function’s leadership. Put it in terms they’re familiar with. And at least to start with, measure social media against and along with the things you’re already tracking. See whether it has an impact either way.
And above all, be sure that you’re building a discipline of measurement and accountability in your business before you blame the medium itself for being immeasurable.
There’s loads of opportunity to evaluate your efforts, if it’s a mindset you’re willing to take.
Over to you. Agree? Disagree? I’m here to listen.
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