It’s been a constant battle across industries, the crusade of answering that question: “what is the ROI of social media?” The general consensus is that if you can’t measure the ROI, you can’t spend money on social media. Moving into late 2011, this ROI question has transformed into “what should I measure?”
Finally, this year there have been measurement discussions of value, replacing the mysterious ROI question. People have given speeches about measurement and social networks have launched different engagement features. People are lining up to hear about ROI. The ROI formula is a simple one, if you don’t happen to have it in front of you, here it is:
Fantastic. But guess what? We may have been asking the wrong question. What we should be asking is “what do I need to measure that shows social media success?” This is a fundamental step when designing a social media strategy, don’t picture it has any sort of hindrance. It’s definition.
We’ve mentioned the Five Stages of Social Engagement before. The aim is to make measurement relevant and useful, which is why insights and analytics are so important in every step of the journey.
A key part of any strategy is to know what to measure. At different stages of the journey there will be different requirements for measurement. For example, in Stage 2 you should be defining “what should I be measuring?” Within that same stage is where this will be defined, and it’s simple: measure what will lead you into the operational stage. These will be the metrics that will prove successful not only in your social media operation, but they will also align with your objectives. For example, if your objective is brand reputation management, then sentiment would be something you would measure.
Once you’ve entered Stage 3, you will need a coordinated measurement framework that will be responsive to the requirements of multiple social strategies and multiple outcomes. By creating an all encompassing measurement framework, you’re facilitating the need for coordination and communication across business divisions and disciplines.
Measurement is the bridge that will connect siloed social media activities across the enterprise. If your company requires measurement for validation, you will need to update your existing measurement framework or ensure that it aligns with your social media strategy, including metrics that work towards business outcomes. If there is no measurement discipline in place, you can build a social media measurement framework.
These same fundamentals can also be applied to small and medium sized businesses.
To work towards success you first need to understand where you are. Below is a self-assessment that you can use within your company to determine which stage of Social Engagement you’re in. The assessment will allow you to see where your company is at as a stage score, however the real value is using this information to create action within your team.
Please share your thoughts below. How are you measuring your Social Media ROI?