The need to determine the return on investment (ROI) of any business expenditure permeates the entire corporate world.
It has been the monkey on the back of the “softer” parts of the business, such as marketing and communications, for many years.
Just as that chestnut is cracked, social media (with its yet-to-be-completely-defined parameters arrives) to shake things up.
How does one quantify something that is fast-evolving and is perplexing businesses the world over?
Well the first thing, is to stop acting like a rabbit in the headlights and realise social media is JUST another tool. No more, no less.
It has a technology component, naturally, but also requires the human capital to run it effectively.
This combination of factors is not unlike most other business processes within organisations. So come in off the road and let’s have a look at what your business can do to start measuring the success of your social media strategies.
Measurement method
Like any business process that is to be measured for ROI, you need to firstly define your goals. What are the goals of your social media engagement?
Then follow the tried and true principles of management by objectives that uses the
S.M.A.R.T. goals methodology. Namely:
Specific – define your goals accurately;
Measurable – determine a means of measurement of your progress;
Actionable – goals cannot be unworkable;
Realistic – weigh up your resources and set goals that are achievable;
Time-based – set deadlines and milestone points.
It’s worth putting some emphasis on that first step, as it frames the entire process. So put sufficient time into defining the business aims that are driving the ROI measurement process in the first place.
For example, are you simply trying to see if marketing resource time allocated to social media is paying off? Or are you trying to measure social media’s effectiveness as a customer service resource that leads to cost savings?
Armed with these principles you can apply them to metrics that are peculiar to social media:
• Audience
• Reach
• Engagement
• Sentiment
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Customised criteria
Now collate the data either in a spreadsheet that makes sense to you or using one of the many applications available for modelling and reporting. Then you can devise a methodology, that works for your business, to measure the effectiveness of your social media strategy. Formulate a list of KPIs upon which to assess that data to keep the results consistent. The time taken to define the criteria that is important to your business will pay off considerably down the track.
It is logical to apply metric criteria that makes sense to your staff, so that results are meaningful and can be actioned by the business rather than remain just a cute statistic the webmaster generated.
As social media is particularly effective at Reach, perhaps this is an area where your metrics should initially be built upon.
Platform pertinent
With the number of social platform choices growing steadily, your business would be well served to start your ROI journey at the logical place – the platform into which you have invested the most corporate energy and time. As your ROI methodology and expertise grows, you can add other platforms to the list.
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