Determining the ROI of social media marketing activity is a convoluted and complicated challenge that many – if not most – businesses and brands struggle with.
In an effort to better measure the value of social media marketing, a recent Business Insider article reports that, ‘many brands are moving away from metrics that purport to measure ROI on social media’.
This indicates that even many of those businesses and brands that thought they had a formula for placing a monetary value on their social media marketing activity have since reevaluated their methods and abandoned them as a result. This is likely due to a realization that their own valuation criteria were fraught with issues.
The article continued, ‘They’ve realized that social media isn’t a transactional engine or sales machine, so they’re dropping half-baked indicators that gauge secondary effects, such as financial return. Instead, the new metrics evaluate social media strategies in terms of audience-building, brand awareness, and customer relations’.
For most businesses, correlating social media activity directly to sales is a difficult task due to the non-linearity and complexity of many consumers’ purchase paths.
What I find most interesting about this is why an organization would attempt to make this direct correlation in the first place. After all, there are many factors that contribute to making a sale, some of which include brand awareness, brand affinity, price, distribution, shelf placement, availability, seasonality, economic conditions, customer support, loyalty, prior brand experience, brand trust, perceived referral value, and many, many more.
There are a huge number of factors that contribute to consumers making a purchase decision.
Measuring sales as a return on social media activity is equivalent to measuring the sum of all influencing factors for those sales, many of which can be directly impacted by social media.
So, to accurately measure the activity required to influence a purchase – in this case social media activity – you actually need to measure the various influences to that purchase – brand awareness, affinity, loyalty, and on.
Perhaps the problem many of us have with determining the ROI of social media isn’t with how to measure ROI, but is instead with how we define ‘return’.
If we stop thinking about the ‘return’ of ROI as end sales, and start thinking about ‘return’ as a sum of the value of all of the relevant aforementioned factors – which ultimately lead to sales – then calculating an ROI of social media can be much more achievable; not simple, but achievable.
In the cases of the businesses represented by the Business Insider article, I actually don’t see them abandoning their ROI calculations so much as I see them taking the beginning steps in redefining how they see a ‘return’, which is a step in the right direction.
How do you measure the business success of your social media marketing activity?
What ‘returns’ do you look for from your social media marketing efforts?
It would be great to chat with you about this further in the comments, or on Twitter @RGBSocial
Did you happen to notice anything strange last week?
If you did, it was probably a result of the immense number of mentions of Toronto Mayor Rob Ford on social and traditional media, and not that I took the week off of social media.
Believe it or not, while I took the week off of social media, the world kept spinning, my business survived, my face didn’t melt off, and no other catastrophes occurred as a direct result (as far as I know anyway).
Of course I’m joking about the dramatic overestimation of my importance to the world of social media, but I did gain some perspective I’d like to share while taking this bit of time off recently.
It’s perspective that is relatively simple to understand, but I’ll tell you that having lived it has given me a new appreciation for the validity of the following points:
Before anything, take care of your business.
Sometimes there are more important things to do than sweat every detail of your efforts on social media, particularly as a small business owner. If your business requires your full attention, it would be foolish to let critical business requirements slide in favour of managing your social media presence. If your business is comprised of a small team, be sure to have your priorities in check and take care of what’s best for your business first and foremost.
Taking a break can be reenergizing.
It’s obvious and cliché, but it’s true. Taking a break from anything, even if it’s something important and that you’re passionate about can be incredibly reenergizing. Because social media marketing is demanding of your time and attention on a daily basis, taking a few days off can really help to refresh your motivation for building relationships with your targeted audience, providing huge value, and generally killing it on social media.
Stepping back can give you fresh perspective.
There are times when the best way to progress something, is to step away from it. Being removed can give you fresh perspective, and let you think about things in new ways without needing to take care of the day-to-day. I’m convinced the same holds true for social media. Not being so involved in the daily requirements of managing your social media properties can better facilitate those magical moments when ideas and fresh thinking comes to you almost subconsciously.
If your efforts are consistent, the odd hiccup isn’t going to disrupt anything.
And the reality is that nothing terrible is going to happen as a result of a few days away from social media. You’re not going to lose your entire audience, and you’re not going to jeopardize the relationships you’ve built. Your business will be fine, and maybe it will even be better as a result.
What were the negatives of taking a week off?
After returning to my business’s social media efforts, and my personal social media networks after a week away, things were pretty well where I left them. Sure, I lost a few followers on Twitter, but I think that number was literally 3 or 4.
I published only one blog post last week instead of the two that I typically do, which wasn’t technically a cheat because it was pre-scheduled to post from weeks prior. This resulted in my page views being down about 10 percent for the week, which is within my blog’s typical range of fluctuation, so nothing really dramatic.
These were the most dramatic changes that I noticed as a direct result of this experiment, so certainly no irreparable damage done.
So there you go. If you have pressing needs to take care of that keep you from managing your social media and content marketing efforts as strictly as you’d ideally like, don’t sweat it, particularly if you have a track record of consistency and you don’t make it a regular habit.
As a result of having done this myself, I might actually suggest taking a break every now and again to recharge and reinvigorate your efforts upon your return. And an alternative to letting things stagnate is of course to have someone capable stand in for you while you take a bit of time away.
When is the last time you deviated from your regular routine on social media?
If you’ve ever done this, what happened as a result?
Do you have a plan in place to facilitate taking time off of social media?
It would be great to hear from you in the comments, or on Twitter @RGBSocial
Google defines best practices as being, ‘commercial or professional procedures that are accepted or prescribed as being correct or most effective’.
In the world of social media and content marketing, we spend a fair deal of time talking about best practices. We write blog posts about best practices to help others, and we updated our social streams with endless amounts of content to do with best practices.
This is great. It’s awesome to have such an amazing collection of content on social media best practices. If you’re unsure about how to tackle a certain challenge, conducting a quick search for best practices in that area can be a lifesaver. If you want to validate your thinking, benchmarking against best practices can provide a great deal of relief and help you proceed with confidence.
Best practices can be supremely helpful to study, understand and follow.
But best practices should come with a major caveat.
By their nature, best practices tend to be generalizations. Typically, they don’t specifically address your unique situation, opportunities and challenges. And getting too caught up in following best practices can affect your comfort and willingness to take a chance and do something amazing that may be contrary to conventions.
Best practices should be a starting point.
If you’re learning about a specific social media platform, strategic approach, technique or tactic, study best practices to get a handle on what works for most people. Then, think about these best practices in the context of your business, brand, consumers, competition, opportunities and challenges. This context should be applied to what you actually execute, and what you execute will be more effective as a result.
Create your own best practices.
After you’ve studied best practices, start thinking about a methodology to follow to create your own best practices. Figure out how you are going to monitor and measure your social media and content marketing efforts so that you can benchmark certain actions against others and see what works best for you and your audience.
AB testing is a great way to do this, and over time can help you to fine tune your social media and content marketing strategies for maximum effectiveness. In time, you’ll have your own best practices, and you’ll have developed a resilience to falling into a trap of feeling too comfortable about what you’re doing, which can be hugely detrimental to doing anything really special, which leads nicely into my next point…
Learn to fear comfort.
Best practices and ‘proven’ strategies and tactics can be your worst enemy. The validation that you’re following best practices can be comforting. You’re following what works. You’re doing things correctly. You’re doing what the experts do.
But what you’re not doing is anything different. If you’re not doing anything differently, then you’re doing things exactly the same as everyone else, including your competition. If you’re not doing anything different than your competition, then what effect do you really think you’ll be able to have on your audience? Do you think you’ll be able to more effectively convert them to consumers? Do you think you’ll be able to build a stronger more loyal audience? Do you think your activity will convert audience members to becoming evangelists?
Not a chance!
If everyone did everything the same, the world would be a pretty dull place, and the same holds true on social media.
Defy best practices.
I’m not suggesting you just disregard best practices, and the strategies and tactics that have proven to yield success for you and your business, but find opportunities to take a chance. Try something different. Try something new that you’ve never seen anyone do before. Try something similar to what others might have even failed at, but build on the idea and make a few changes for the better. Defy best practices and do something a little less comfortable every now and again.
Then, monitor and measure what you’ve done. It’s not going to be a success every single time, but when it is successful, you’ll have hit on something that is fresh and new, and that none of your competitors have done. You’ll be a leader, and your audience will take notice.
And for all of your failed efforts, nobody’s going to chastise you for trying something new and having it fail. After all, you’ll probably be able to recognize that the new thing you’ve attempted is a failure well before anyone else even takes notice.
So, there you go. Best practices can be incredibly valuable to study and execute against, but don’t get so comfortable that you never try anything new. Getting too comfortable can be your worst enemy, not just on social media, but more broadly in business as well.
Keep pushing yourself to be better, and to think about things differently. If you’re not willing to do this, your competition, or someone you don’t even know exists yet, surely will. And by then, it’ll be too late.
What’s the last thing you did on social media that was a risk?
How do you keep your business on its toes, trying new things, innovating?
It would be awesome to chat with you more about this in the comments, or on Twitter @RGBSocial
When measuring the performance and overall strength of your business, your books are only going to reveal a portion of the story.
Social media can help to fill in gaps of information other more traditional methods of business evaluation cannot provide.
Through social listening, reading reviews and comments, and paying attention to competitive communities you can learn what you’re doing well, what needs improving, and gain a stronger understanding of what you can do to enhance the performance of your business.
The relative openness of platforms such as Twitter, Pinterest, Instagram, Google+, Tumblr, Blogger, and WordPress, give you numerous places around the social web to listen in on what people are saying about your business or brand. Even Facebook’s Graph Search has made the world’s most popular social network a place where social listening is possible outside the bounds of your own community.
Reviews are not only critical to driving sales for your business, but can be a great source of information and insight about the performance of your business. Glowing reviews can verify the things you are doing particularly well and give you ideas about how you can provide those experiences to more consumers. Negative reviews can reveal opportunities for improvement, areas of your business that are fundamentally flawed, give you ideas for future product development, and more.
Comments and discussion
For some time, branded social media channels have been a favourite place for consumers to express their delight with businesses, as well as tear a strip off them when they have negative experiences. While many of us are becoming pretty good at responding to these comments on social media, there is opportunity to apply what we learn in the comments on our social media channels to influence business practices. By tracking compliments and complaints, we can see trends occurring and apply what is learned to other inputs that influence our business strategy, product development, customer service, or really anything to do with our businesses.
Competitive and related communities
Discussions about your business and brand aren’t going to be contained within your communities. Competitive and consumer driven communities should be monitored on a regular basis, not only for your competitive reviews and analysis, but also to gain as broad and comprehensive an understanding as possible about the performance of your business.
Social media channels can be a great indicator for the various strengths and weaknesses of your business, but you obviously need to be paying attention for it to matter. To ensure you’re sufficiently keeping your ear to the ground, consider adding social listening KPIs to your regular analytic reports. This will help to keep you honest about paying attention to what consumers think about your business, and will ensure that what you uncover is easily shared with others in your organization.
How do you use social media to measure the success of your business or brand?
Have you ever adjusted your business strategy, product or service because of what you’ve heard from your customers on social media?
It would be great to hear from you in the comments, or on Twitter @RGBSocial
So, you’re a small to medium sized business and you’re all set up on social media. Yeah?
You’ve registered accounts on all of the popular social media platforms – Facebook, Twitter, Google+, YouTube, Pinterest, and maybe a few others as well.
You’ve got someone on staff regularly publishing content on each of these platforms. Your latest sale, new products, the daily weather report, and that beautiful photograph that one of your coworkers took of the wing of an aircraft they recently flew home in from vacation. I’m sure it’s an absolutely beautiful shot.
You’ve asked all of your family and friends to ‘like’, follow and subscribe to your pages. You’ve asked your coworkers to do the same, and for them to get their families and friends to follow suit as well.
You’ve paid for Facebook ads and other similar products to drive traffic, followers and subscribers, and through all of these methods you’ve attracted a reasonably sized audience.
Here’s the thing; nobody gives a damn about any of this.
Nobody cares that you have an account on Facebook, Twitter or YouTube.
If you’re solely broadcasting and republishing readily accessible information, nobody will care because there is no added value to ‘liking’ your Page, following your business, or subscribing to your social media channels.
And nobody is going to buy your widgets, or sign a contract with you just because you have X number of followers. It’s just not going to happen.
Nobody cares that you’re on social media; it’s about how you’re using these tools that will drive real results.
There needs to be a value proposition in place that will get people to stick around, be interested in what you have to say, and motivate them to be involved with your business or brand.
Are you even interested in the content you’re publishing and the interactions you’re having on social media?
If you’re not, you can’t really expect anyone else to be either.
This is, of course, a dramatic simplification of what it takes to generate meaningful results, but the point is that you need to be doing something of value and interest for you targeted audience – that is connected to your business and brand – in order to move the needle.
So, what are you doing on social media that’s going to generate meaningful results?
What are you doing for your business that you really care about?
It would be great to hear from you in the comments, or on Twitter @RGBSocial