Author: Shane Snow
Social networking has finally become something valuable for brick-and-mortar businesses. Smartphones and location-based social networks allow users to interact, share, meet up, and recommend places based on their physical coordinates. This real-world connection to social media can mean more foot traffic and profits for business owners.
Posted by Raj Dash
While companies are starting to adopt Social Media for online marketing campaigns, and even letting employees participate, the question of ROI (Return on Investment) arises, along with doubts about what metrics to measure. How do you know how effective your social media campaigns are if you’re not measuring any metrics, let alone an overall ROI? Below, we discuss ten important Social Metrics for companies.
According to 2009 Mzinga & Babson Executive Education study, over 80% of professionals do not measure ROI for their company’s social media programs. Granted, Social Metrics and their measurement techniques are relatively new, and this might account for the lag in tracking. However, there are some organizations measuring social metrics, which enables them to eventually measure ROI. Marketing Sherpa’s survey of 2,000+ marketers shows the following three social metrics at the top of what’s being measured:
- Visitors and sources of traffic
- Network size (followers, fans, members)
- Quantity of commentary about brand or product
These are easily understandable common social metrics. However, with some C-level executives saying that they want to measure ROI from social media but don’t yet know the value of certain types of social media, there has to be more measurement and analysis. Monitoring data is only valuable if metrics relevant to a company are being tracked, analyzed, then applied to improving a Social Media Marketing (SMM) strategy. Each company may have some specific requirements, but here are ten important social media metrics to measure:
- Social media leads. Track web traffic breakdowns from all social media sources, and chart the top few sources over time. If members of your social media networks are sending referrals, consider measuring this data as well.
- Engagement duration. For some companies, engagement duration is more important than page views. For example, if you have a Facebook application, how much time are social network members spending using it? Is per-member usage increasing over time? Alternately, if people visit your your company websites from SM (Social Media) sites, how long are they spending? (Also consider tracking which pages they visit.)
- Bounce rate. Are visitors coming to your site from SM sites but quickly leaving? Maybe your landing page needs better, more relevant copy. Maybe the information they’re seeking isn’t easily found.
- Membership increase and active network size. This is the portion of your company’s social networks (e.g., Twitter, Facebook) that actively engages with your social media content (e.g., Twitter, Facebook Pages, etc.) Is your collective members, followers, fans network growing, and is there interaction with your content?
- Activity ratio. How active is your company’s collective social network? Compare the ratio of active members vs total members, and chart this over time. There’ll always be some social network members who are inactive, but if you initiate a campaign to increase interaction, you should also measure the resulting data. Activity can be measured in a variety of ways, including usage of social applications.
- Conversions. You want social network members to convert: into subscriptions, sales (direct or through affiliates), Facebook application use, or whatever other offerings you have in your overall sales funnel and that can somehow be directly or indirectly monetized. (E.g., subscription to a weekly e-newsletter can be monetized by giving other companies access to your list in the form of advertising.) Measure all types of conversions and chart them over time.
- Brand mentions in social media. So, you have a highly active social network and members are talking about your company or the company’s brands. Measure and track both positive and negative mentions, and their quantities.
- Loyalty. Are social members interacting in the network repeatedly, sharing content and links, mentioning your brands, evangelizing? How many members reshare? How often do they reshare?
- Virality. Social members might be sharing Twitter tweets and Facebook updates relevant to your company, but is this info being reshared by their networks? How soon afterwards are they resharing? How many FoaFs (Friends of Friends) are resharing your links and content?
- Blog interaction. This is actually more than one metric lumped together. Blogs ARE part of an SMM (Social Media Marketing) toolkit, but only if you allow comments and interact with readers by responding. If you’re doing this, encourage responses either directly in the comments section of blog posts, or via Twitter. (Use a blog widget that allows this.) If your blog’s content is suitable for social voting (Digg, Propeller, Mixx, etc.) or social bookmarking (Delicious, Stumbleupon) sites, install a blog plugin that displays the necessary sharing “buttons”, then track referrals back from those sites.
You can see from the above list that there are both key metrics and variations that you’ll probably want to monitor and analyze, depending on your business objectives. Not all of them are simple metrics to track, and as such do require either or both custom tools and custom reports. Supplement your metrics reports by noting any milestones in your SMM plan. Also, if you run any sort of social campaigns, measure the ROI on specific goals. Social campaigns could use applications (E.g., Facebook applications like Mob the Rainbow) to encourage social participation. Measure application usage and resulting conversions. Finally, the use of complex measurements such as Multiple Moving Averages (MMAs) can show both short- and long-term trends, thus providing you with an overall view of the health of your sites and social networks.
Are there other metrics you measure that you feel are more important for your company? What tools do you use to measure social metrics? Let us know in the comments.
Author: Alexander Osterwalder
A lot has been written on the value of social media for businesses (Blogs, Wikis, Twitter, Facebook, etc.) – some of it relevant, some of it hype. I will limit myself to mapping out three business model areas where social media can have an impact.
Social media refers to a category of online media or platforms that facilitate discussions, participation, and sharing of various forms of content in a very convenient way. Technologies in this area include blogs, wikis, social networking platforms, micro-blogs, and other platforms that facilitate sharing user generated content. Players – and service providers – in this arena range from Facebook (social network) and Twitter (microblogging), to Youtube (user generated content), LinkedIn, Wikipedia, Flickr, and many, many more.
In this blogpost I’m less interested in the technological possibilities of social media, but ask myself how these tools can be instrumental to your business model. I singled out three areas visualized in the Business Model Canvas image below: co-creation, marketing as conversations, and open innovation. As a modern organization, we have, of course, integrated all three of these areas into the production and sales or our bestselling book Business Model Generation.
A Co-Creation
Understanding and satisfying customer needs is the basis of any enterprise. So what could be better than integrating the customer into the product or service development process. The question to ask is…
How can social media enable your customers to contribute to value creation?On the extreme end this means user generated content. Threadless, for example, is a community-based t-shirt company that allows people to submit new t-shirt designs that can be discussed and voted upon on the website. Less extreme example are Amazon.com which allows buyers to review and discuss products, or eBay, which allows the community to evaluate sellers. All this contributes to better value propositions based on customer contributions.
B Marketing as Conversations
Don’t you find it annoying when somebody desperately tries to sell you something (remember that last phone marketing call that ripped you out of your deepest concentration..)? Well, hard selling is dead – or at least it’s a dying species. The question to ask is…
How can social media enable your customers to become your best advocates/sales people?Social media is transforming the way companies can market their products and services. The authors of the cluetrain manifesto nicely put this when they state that “markets are conversations”.
In a nutshell this means that your most valuable sales force is your existing customer base. You will probably argue that this has always been the case. However, what has changed is that we increasingly rely on our friends and peers to make buying decisions – not company marketing. Hence, you must focus on existing customers as channels to reach their friends and peers… And this is where it ties back into the above point: customers that have participated to co-create value are more likely to become your best advocates.
C Open Innovation
Increasingly organizational boundaries are becoming fuzzy. Companies understand that they need to open up to outside ideas, talent, and patents to leverage their own resources and activities. The question to ask is
How can social media enable your organization to integrate ideas and knowledge from outside its boundaries?Open innovation is a concept that my friend Henry Chesbrough has eloquently discussed in his books Open Innovation and Open Business Models. Social media has given open innovation another boost. It allows engineers to easily reach beyond company boundaries and it allows R&D departments to effectively collaborate with outside scientists across the world.
An example that I particularly appreciate is the software company Red Hat. The organization’s core product, Red Hat Enterprise Linux, is deeply engrained in the freely available open source operating system Linux. A software which could have never reached its current levels of success without the Internet and social media.
