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Jun 22, 2010
How To

Measuring Social Media's Contribution to the Bottom Line: 5 Tactics

SUMMARY: Social media can improve website traffic, lead generation and sales -- but by how much? And how can you improve those results?

The solution is through careful measurement of social media's contribution to your marketing goals. We spoke with an expert in social marketing analysis to uncover five tactics that can help you measure which online social interactions drive business results.
As with any new marketing channel, social media offers marketers the chance to experiment with new tactics. But, after the experimentation phase, marketers should assess how social media helps their businesses -- and how they can improve their performance in the channel.

A key way to do this is through measurement and analysis.

"Social media isn't a sales channel, so it's hard to measure it as you would a revenue stream. But it impacts the likelihood of sales," says Amber Naslund, Director, Community, Radian6.

Naslund is an expert is social media analysis and co-author of Radian6's Practical Social Media Measurement & Analysis ebook (see useful links below). Below are five tactics she suggests for measuring your social efforts.

Tactic #1. Dedicate resources to connecting social and business data

Comments, shared links and other online interactions are encouraging -- but they're only useful if they help your business.

"Social media metrics alone, in a bubble, matter very little," Naslund says. "It's important that you can actually connect the dots: Is social media driving brand awareness? Is it driving customer retention?"

Without this connection, you cannot justify adding resources to your Facebook page, Twitter feed, blog or other social outlets.

- Set aside time and resources

The most difficult part of conducting this type of analysis is finding the time, Naslund says. There is only so much a company can automate, and some of this analysis is manual.

"There is no such thing as the computer that can combine all this data, spit it out and point to what to do. That requires human insight," Naslund says.

Anyone on your team who is capable of analyzing quantitative and qualitative data and understanding their business applications could help your effort. You can begin making a case for more resources by documenting the amount of time and investment you've put into gathering, analyzing and acting on social data and the results you've achieved.

Tactic #2. Incorporate other reporting systems

Tying social data to your business data requires strong reporting for your website analytics, email, search and other marketing systems.

In fact, if any of your major marketing channels are not equipped with accurate and robust reporting, you should focus on those channels before worrying about social data.

"If the proper infrastructure isn't there," Naslund says, "you're setting yourself up for failure."

- Social monitoring tools

You will, of course, need tools capable of measuring basic social media information, such as your number of followers and comments over time, as well as more complicated information such as your "share of conversation" and online brand sentiment.

For example, you want to know how often your brand is mentioned in relevant discussions online and whether people mention your brand in a positive, negative or neutral way. Monitoring your performance in these areas can reveal whether improvements translate into business results.

Manually monitoring this information is not practical. Many tools, both paid and free, have sprung up over the last two years to help marketers monitor and measure online conversations. If you're looking for an inexpensive way to get started, try free tools such as:
o Google Alerts
o Technorati
o Twitter's search
o Seesmic
o TweetDeck

- Tie data into a CRM system

Every company will be different, but in general, Naslund suggests incorporating social data with a customer relationship management system so you'll have an idea of social media's impact on business metrics such as customer retention and purchase frequency.

A challenge here is combining the data, Naslund says. You cannot simply dump your Twitter followers into your sales database and match them up. Your team either has to build solutions to automate the process or manually append customer files.

Tactic #3. Start with concrete objectives

Measurement for measurement's sake is likely to confuse and overwhelm your team with a flood of data. Instead, set clear goals and track specific, relevant metrics.

"You need to have two or three very clear objectives of what you�re going to glean from social media in order to track and distill metrics from that," Naslund says. "Measurement itself is not the goal. Measurement is supposed to teach you whether you�re working towards those goals."

For example, if your team wants to improve brand awareness, you can track metrics such as:
o Number of online conversations mentioning your brand
o Website traffic from social channels
o Email subscriptions from social-driven traffic

Naslund also suggests monitoring only two or three metrics related to each goal, as additional metrics often reiterate the same data and unnecessarily increase your workload.

Tactic #4. Use basic data correlations

"I tend to think the most simple stuff is the most impactful, mostly because we try so hard to overcomplicate things, because over complicating things must mean we�re serious," Naslund says.

Say, for example, your team uses Twitter to broadcast a link to a specific product landing page and your audience re-tweets it. By looking at your website analytics, you see that subsequent traffic and sales on the page have increased.

In this example, re-tweets seem to be improving your marketing performance, which raises the question "How do we get more re-tweets?" From here, you can calculate a ratio between the number of re-tweets and the increased traffic to the landing page and use it as a benchmark to test other efforts.

"Most people will say 'We'll just ask people to re-tweet our stuff,'" Naslund says. "But what really motivates a re-tweet is free content. So that means we need to generate more great content that points people to those landing pages in order to repeat that process."

- Compare lists to segment audience

There can be a lot of value in comparing your community database with your sales database, Naslund says. She saw an online B2B healthcare community's team overlap their databases to uncover which community members were not customers. They developed a specific strategy to market to these community members and they saw great success.

"It wasn't complicated. She did it with a couple of Excel spreadsheets."

Tactic #5. Remember the community

Remember that this data represents real people choosing to interact with your brand. Although your goal is to improve business results, it must be done within the context of providing your audience with valuable content and genuine interaction.

If you're hoping to get your audience to share a link, or comment on a post, you must do so by appealing to their needs -- not yours.

"You can measure till the cows come home, but having the proper approach and mindset to why you�re in social [channels] has to come first," Naslund says.

Useful links related to this article

New Chart: Targeting and Measuring Social Media Objectives

Using Social Sharing to Achieve Specific Email Goals: 5 Insights

Google Alerts

Seesmic

TweetDeck

Twitter Alerts

Technorati

Radian6: Practical Social Media Measurement & Analysis ebook

Radian6

See Also:

Comments about this How To

Jun 30, 2010 - Jesse Ciccone of Matter Communications says:
Very good stuff, indeed, Amber. One thing I'd add (realizing you weren't trying to do everything in one article!) is that organizations need to take a hard look at whether they are the type of business that should be embracing social media from a cultural / philosophic standpoint. For example, is Virgin considered a customer-centric business that drives loyalty b/c of how well they do social media? Or is it that customer-centricity is at the core of the Virgin business, so they naturally do social media well (for their customers and the business)? A related element to this is understanding and accepting what social media is good for (and, hence, really should be measured against). Your mileage will vary depending on whether you are all about customer acquisition or if you place an emphasis on lifetime customer value. Probably seems self-evident / blindingly obvious, but too many companies rush into the "let's use to social media to drive sales" mindset without first taking a look at if what social media requires and delivers fits with their core business philosophy and strategy.



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