A quick note:
I was recently published in 2 books by Tea Silvestre of Story Bistro. One is free on Amazon today:
– 30 Ways to Bloom Your Online Relationships
– Butter and Beast: Inspirational Stories & Recipes to Feed the Entrepreneurial Mind, Body & Soul
[/box]
A pervasive myth among newbie social media managers that “the ROI of social media is hard to track.”
I’ll admit that even I used to say it – back when social media was a new thing. It’s so pervasive it’s seconded only by “We were hacked!” after a nude selfie, party pics, or a socially unacceptable post surfaces.
Hard-to-track ROI?
Nonsense, my good fellow! Frankly, total bullshit. It is mostly an excuse by well-intentioned marketers who are hired to do social media, but don’t have the clout with their clients to pull more business logic levers.
Social media ROI is only hard to prove in two situations:
- if you’re intentionally being lazy, or
- if you’re just asking the wrong questions
Last blog, I bitchslapped horrible marketing advice: boost all the Facebook posts. The TL;DR version is: only boost if you have a legitimate business ROI for doing so. Otherwise, write better content that’s worth sharing.
What is a legitimate business ROI? It comes down to asking 4 questions:
- What is the business metric we want to change? (sales, butts-in-seats, volunteerism, sentiment improvement)
- To what degree do we want to change it?
- What levers will we pull to change it?
- How will we know if we were successful?
That’s it. Four questions. Four fucking questions give you social media ROI.
Roadblock: social media managers who don’t have power over business logic levers, or can’t influence company policy, or aren’t empowered to make a difference will have a really hard time generating ROI. If that’s you, my heart goes out to you. Unless social media is treated as an equal-opportunity player in the marketing mix, ROI is hard to come by.
How do you pick a good business metric?
The two different kinds of metrics are Hard Metrics (bow chica bow wow) and Soft Metrics.
Soft metrics – things like sentiment, top-of-mindedness, awareness, likelihood to refer a friend, etc. Things you can’t easily put a number on, but can see on a good customer survey.
Hard metrics – things like bounce rate, visits, likes, products sold, coupons used, etc. Almost always automatically tracked by whatever tool you’re using (analytics, insights, whatever).
Got it? Now, here’s the trick: any single metric on its own means next to nothing. You only get a complete picture by looking at how two metrics combine/interact/work together/work against each other. This is called meta-analytics.
Why?
Think of it this way: say your friend David wants you to draw a portrait of his cat. He’ll pay you only for a perfect picture of his beloved Fluffy. You can try as many times as you want, but the rules stay the same each time.
One hitch, though – David is a douchebag and requires that you draw the picture while blindfolded, having never seen the cat, from his verbal description only – his fetid hummus breath fogging up your ear throughout.
Gross, right?
So, fucking stop trying to prove your social media campaign was successful because it got a “ton of likes”. You don’t know what the cat looks like. That you were able to keep pencil to paper the whole time is virtually meaningless if you drew three blobs and not a cat, got it?
While I’m on this – a “Like” on Facebook is tantamount to slightly-more-than-outright-boredom from whatever random soul happened to see your stupid update. Can you even remember even 5 things you “liked” on Facebook from last week without looking at your activity feed?
I’ll wait.
So, if a Like isn’t the end-all-be-all of social media ROI, what is? Let’s break down this ROI measurement a little bit:
Step 1 – to vet ROI, we need to know: what is our goal? (What is the business metric we want to change?)
Let’s explore a specific business case: a Cider Maker.
The Cider Maker needs to put butts in seats to sell cider.
That means: put new butts in seats and keep the existing butts already occupying seats. In business jargon: positive growth rate of customers over time, likelihood to repeat visit in the same period, and likelihood to refer.
Growth rate of customers is pretty easy to track. It gets a little murky if you only track unique credit cards vs say, subscribers to your mailing list. But you can get the rough number.
How about likelihood to repeat a visit? What metrics would we use? Maybe a customer survey. Maybe a Facebook survey. Maybe tracking the number of times a superfan comments after posting that night’s specials.
But, I hear some of you complaining, knowing if someone will actually come in or not based on a social media comment is next to impossible to track…
Social is probably the most visible medium for Word of Mouth, but don’t forget how much conversation happens offline. Only about 7% of word of mouth happens online. Doing a fabulous job on engaging social posts? Just don’t neglect generating and tracking those offline conversations. Create something you can track.
Post a shot of your new, secret dish with your new, secret cider, ask visitors to order it with a specific phrase or password to try it out (even if it’s not rare or limited) and you have just invented the very metric you needed to answer your ROI question. You could even do unique variations for Instagram and Pinterest if you wanted to break it down by network!
Likelihood to refer can be a few different metrics depending on your setup.
It could be an on-site comment card. It could be how many first-time visitors leave a Yelp or Facebook or FourSquare review after asked to by the server. It could be just getting the review in the first place. It could be number of reviews each week vs customer growth rate.
Long story short: when the metric you need doesn’t exist or isn’t tracked, don’t get lazy just because tracking Likes is easy. Figure out how to create and track the metric you want.
Step 2 – figure out to what degree you want to change that metric.
S.M.A.R.T. goals are key. “I want more butts in seats,” isn’t a measurable outcome. “I want 20% more butts in seats month over month for a three month period starting in March, 2015 and ending May 31, 2015.”
Specific ROI goals eliminate nebulous marketing “goals” that aren’t aligned with the actual goals of the business (like profit).
Once we have those two bits answered, we can move on.
Step 3 – What levers will we pull to change the metric?
In other words: how does a customer interact with our brand to contribute to the goal? What behavior are we trying to influence? How can we influence it?
Action is at the root of any metric. A visitor has to visit. An engager has to like, comment, click, or share. A purchaser has to purchase.
Figure out what action is associated with achieving the goal you’re after. Retaining customer dollars? They’d better know how to buy, think to shop, and actually get an ask letter to come in once in a while (and maybe click a trackable link through to a tracked landing page after opening a “Hey, How Are You?” email).
Maybe you’re creating a new email campaign. Or a YouTube video campaign. Or an Instagram photo contest. Or a write-in-letter contest. Or… you get the picture. It could even be as simple as “blog one more time per week” or “post 2 more times on Facebook each day”. The “lever” is a campaign – an executed series of events with a step-by-step process to try and influence the customer to do something.
Step 4 – How will we know if we were successful?
If you know steps 1-3 – what’s the metric, how much do we want to tweak it, what will we do/try to tweak it – then you know step 4 by default. You’ve created your boundaries and can easily play in them now. You’ll know if you succeeded because you outlined the goal, the timeline, the exact metric, the exact amount, and what you’d be doing to try and change the metric.
How cool is that? Nebulous ROI no more!
There is a step 5 – and this is what I get paid by my clients to help them figure out – What’s Next?
Win, lose, or draw – you have to know what’s next. That’s not so much an ROI question as a marketing strategy question. Did your campaign totally bomb? Cool. How do you modify it to perform better in the future, or should you abandon it and try something new? Did you totally oversell your product and land in hot water because the marketing was too good? Whoops. How can you structure the sales process next time to avoid embarrassment?
Did I miss something? Let me know in the comments.
