Social Media Measurement and ROI: New Thoughts

[Kyle Lacy]

I was reading a blog from Amber Naslund from the company Radian6. The post had some great thoughts regarding measuring social media success and goals.

Here are some thoughts:

* Setting goals that are measurable in the first place.

* Understanding that impact doesn’t always mean something goes up (like sales or eyeballs). Sometimes it can be that something goes down (like costs of customer service or traditional marketing costs).

* Benchmarking, which means measuring where you are NOW relative to your goals so you can track future progress and impact. This takes time, but you can’t ever determine results if you don’t know where you started.

* Understanding that social media may not be the sales channel itself, but that there are a pile of ways it IMPACTS sales, and measuring those is key.

* Knowing that determining ROI is ultimately about doing the math between dollars in and dollars out.

* Learning the art and science of correlation of data, so you can tie your efforts in one area of the business to the results and impacts they have elsewhere.

* Realizing that software can give you the data and even help you crunch numbers, but you need to engage your brain to make it valuable to your work. There is no substitute for human analysis, ever.

What do you think about the thoughts expressed by Amber in regards to the measurement of social media?

[Erik Deckers]

I don't know which is the bigger challenge, measuring social media or showing people that it can be measured.

I've seen too many people dismiss it out of hand because they 1) know nothing about it, BUT 2) assume they do. As a result, they have a preconceived notion of what it can and can't do.

But despite the difficulty of measuring it (and Amber says it's difficult), it needs to be done in order to show people that it can be done.

Hey, people buy radio and TV ads, billboards, PR services, and other "brand building" tools all the time, and accurately measuring their impact is nearly impossible. Social media, despite it's newness, is still more accurate and thorough in its measurement, thanks to tools like Radian6, Google Analytics, and my own favorite, a pencil and a watch.

[PK Koduri]

Pencil and Stop Watch - many a scientific discoveries were accomplished using some ingenuity and these two basic tools.

[PK Koduri]

Kyle - these are basics that one has to follow to measure anything irrespective of the type of job, function, and industry. In fact one can even use 6-Sigma principles to manage/measure Social Media.One key principle of 6-Sigma is

DMAIC - Define, Measure, Analyze, Improve, and Control

via Wikipedia:
The basic method consists of the following five steps:

* Define high-level project goals and the current process.
* Measure key aspects of the current process and collect relevant data.
* Analyze the data to verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered.
* Improve or optimize the process based upon data analysis using techniques like Design of experiments.
* Control to ensure that any deviations from target are corrected before they result in defects.

[Patrick Sullivan]

To Amber's first bullet point, and a general theme of Erik's reply- to set measurable goals you need to first figure out how/where you want to utilize social media to support business objectives and processes. Then you can set measurable goals (because you'll have some idea of what they should look like) for things like impact on marketing cost, customer retention, cost of customer acquisition, customer service costs and effectiveness, brand recognition, thought leadership impact on reputation and market share, costs or effectiveness service/product delivery, etc.

[Patrick Sullivan]

A propos to this discussion (and a few others) on the value social media is this piece in Time on 10 ways Twitter will change business:

http://www.time.com/time/specials/packages/0,28757,1901188,00.html