A point I make again and again in writing about business technology is not to buy into any technology just because it seems like "all the cool companies are doing it." That's especially true for social media. While companies using social media talk a lot about "engaging with their followers," we hear little about more quantifiable business benefits. (There are exceptions, of course, like Dell's report of $6.5 million in sales it attributes to its Twitter activity.)
Still, folks like Swimfish CTO (and prolific blogger) John F. Moore believe "the cost of not doing anything [with social media] outweighs the cost of doing something." Moore suggests that, among other things, social media can help companies generate revenue, reduce customer support costs and boost customer loyalty.
Those are great reasons for using social media. And there are other use cases as well, such as recruiting employees. But like any technology initiative, social media will be little better than a shot in the dark without metrics to measure its effectiveness. Yet companies seem to struggle mightily with social media metrics. When I interviewed Clara Shih, author of business bestseller "The Facebook Era," she told me companies were often overwhelmed by all of the possibilities of social media. She said:
Social media can be used in such a vast range of possibilities that you really need to hone down on a specific business use case and define metrics for that. That's where I see a lot of companies struggle. They'll say, "We want to be on Facebook," but they haven't determined why. Is it for sales or marketing or customer service or recruiting? If it's one of those, which part of the sales cycle or which aspect of marketing do you want to measure? All of that needs to be factored in when you are thinking about the right metrics to focus on. A particular challenge of social media is that you can measure anything these days. There's so much information and data out there. ... The new skill set is figuring out what, of the vast universe of things you can do, applies to your specific business and your specific business function.
That said, I found a great list of basic social media metrics on SocialTimes. According to a Marketing Sherpa survey, the three most commonly measured metrics are: visitors and sources of traffic, network size (followers, fans, members) and quantity of commentary about brand or product. The SocialTimes list expounds on those and adds some ancillary ones such as bounce rate and activity ratio. (If you want to see the entire list of 10 items, I encourage you to click through and read the SocialTimes post.) Bounce rate tells you how many visitors from social media sites quickly exit your site. If the rate is high, tweaking your landing page to make it more appealing might help.
Activity ratio illustrates how many members of your collective network actively interact with your company online. Many companies, including Microsoft, want to improve their activity ratio, as I found when I interviewed Toby Richards, general manager of Community & Online Support at Microsoft, about the role of online communities in Microsoft's support strategy. The company's three key metrics for online communities are feedback, support and advocacy. An emerging metric is community health, or growth in active participants, which Richards said will be "a pretty critical piece."
Marc Engelsman, VP of search marketing consulting company Digital Brand Expressions, covered lots of the same ground, complete with suggestions for specific products that can be used to track various social media metrics, in our August interview. Like Shih, he recommended zeroing in on social media goals before determining appropriate metrics. He also spoke of the need for metrics with both context and consequences. He explained:
By context, we mean measuring against previous benchmarks. Where were you last month, last year? But also comparing what's happening with your competitors. Do they have a presence in social media? Do they have more followers or fans or positive mentions? You also want consequences. By that, I mean what actions are you going to take based on what the metrics are telling you? Are you prepared to change your tactics and/or prepared to change the time and resources you've invested, based on the results you're seeing? Why measure something if you're not prepared to act on it?
Another key takeaway from Engelsman's interview: Make social media part of your integrated marketing mix rather than a standalone initiative. He said:
We coordinate it with organic search marketing efforts and paid search because we see that one plus one plus one can equal four or five or six. The activity levels in social media have that viral component that can make it very powerful. Social media shouldn't be approached as a one-off or siloed activity.