How do you know if you are successful at Social Media? While the answer a few years ago may have been it’s so experimental, we’ll have to see, the answer from some today is similarly dissatisfying: Social Media ROI is comparable to computing the ROI of a telephone. We can do better than this – we are no longer in the age of experimentation.
Consider these four approaches:
Relative to plan: Before embarking on a Social Media program, forecast the impact of your efforts: how many page views, likes, new connections, user-generated submissions, sentiment, comments, tweets, retweets, or shares are you expecting? And in the real world, what are you expecting in terms of real-world change: decreased customer service phone or email volume, increased leads, or increased product sales? You need not forecast everything – just what is important to you and your organization. Forecasting specific numbers at the outset puts a stake in the ground, and improves accountability… measurably.
Change from prior period: Instead of a comparison to plan, consider measuring growth over time. Be careful though: the growth number is only useful when the investment (time and budget) are also compared over the same period. A 50% year-over-year growth in Twitter followers is meaningless if the work effort to achieve the growth grew by 200%.
Relative to an industry benchmark: A 15% return might seem great, but if everyone else is getting 30%, then 15% is not very good at all. The social web has been around for a few years now, and benchmarks, common practices, and rules-of-thumb are just now starting to become more common. We recently completed a national survey of 400+ associations and not-for-profits; the benchmarks are invaluable. (The 100+ page report is available at http://budurl.com/2012csae.)
Business impact: It’s far more powerful when a Social Media activity directly impacts a real business measure – something that is on the financial statements, either revenue or cost. Some examples: Increased sales due to a YouTube campaign. The effectiveness of Twitter to improve customer retention. The reduction in recruitment fees when using LinkedIn.
While all four measurement approaches are valuable, business impact measures are by far the most. If you are tracking relative to plan, to changes, or to industry benchmarks, follow the measure back to the impact on the business itself. If it doesn’t impact the business, then why measure it at all?
This week’s action item: Create a Social Media Scorecard, highlighting your most critical measures. Not only will it keep you focused on achieving your results, the scorecard is a great way to communicate progress to your colleagues.