How do you measure social media marketing effectiveness and ROI using Key Performance Indicators & Web Analytics?

Socila Media ROI

Social media is now considered a driving force for businesses and brands to interact with their customers. By utilizing social media tools, companies can now engage, receive useful feedback and develop deeper relationships with their customers than ever before. However, how can businesses measure their social media campaigns in a manner that would increase their bottom line as well as their brand equity? What Key Performance Indicators (KPI) can help calculate the company’s Return of Investment in a manner that outlines how effective their social media strategy is?

The most effective Key Performance Indicators you select as part of your social media effectiveness measurement will vary depending on the nature of your business and your goals. For example, is your goal to:

•  Increase sales?
• Increase repeat customers?
• Monitor your reputation?
• Build your brand equity?
• Increase visitors to your site?
• Receive feedback about your products?
• Build your email list?
• Test a product or service?
•  Increase your followers, fans or friends?

Your social media strategy and measurement tool needs to be aligned with the goals you are trying to achieve. Make sure that your Key Performance Indicators are tied to outcomes and are simple to calculate. It is significant to use metrics and measurement tools that help you identify where you need to dedicate your efforts and what is working. It is important that you are able to segment Key Performance Indicators and be able to measure them in a manner that can help you make decisions that would affect your social media strategy and translate to decision-making. In other words, Key Performance Indicators in social media that affect your Return of Investment and efficiency must:

• Be aligned with your organizational goals and strategy
• Provide useful context and insights that can lead to decision-making
• Be based on legitimate and impactful numbers that can be qualitatively deciphered
• Be easy to comprehend
• Leads to an action that can be benchmarked and a value attached to it i.e a meaningful outcome

Key Performance Indicators used must provide context in areas in your organization that would positively impact all areas affecting your sales, marketing, finance, usability, product management and predicting trends and changes in the competitive landscape.

72 Key Performance Indicators for Social Media Engagement & Improving ROI

Here is a list of KPI or metrics that you could adopt to help you measure your level of interactivity with your customers and reach your underlying goals:

1.     Sales

2.     Transactions

3.     Average Order Value

4.     Recurring Sales

5.     Revenue

6.     Revenue per Visit

7.     Profit

8.     Profit per Visit

9.     Cost

10.  Cost per Visit

11.  Days and Visits to Purchase

12.  Emails

13.  Email Response Rate

14.  Task / Shopping Cart Completion Rate

15.  Followers, Friends or Fans

16.  Retweets, Likes or Diggs

17.  Search Engine Ranking in Google or Bing

18.  Website Unique Visitors

19.  Pageviews

20.  Registrations to your site

21.  Registrations from social sites

22.  Average Time Spent by Each Visitor on your Site

23.  Average Pages Viewed by Each Visitor on your Site

24.  Average Pageviews per Visit

25.  New Visitors to Your Website

26.  Recurring Visitors to your Website

27.  Percentage of New vs. Returning Visitors

28.  Visitor Loyalty / Stickiness / Retention Rate (Recency, Duration, Depth of Visit)

29.  Bounce Rate (Visitors not going beyond landing page)

30.  Customer Retention Rate

31.  Bookmarks

32.  Free Downloads (media, ebooks, brochures)

33.  Paid Downloads

34.  Streams or Views

35.  Comments

36.  Feedback / Suggestions received

37.  Thumbs Up or Thumbs Down

38.  Impressions

39.  Clicks

40.  Click Through Rate (CTR)

41.  Earnings per 100 Clicks (EPC)

42.  Friend Forwards or Recommendations to Friends

43.  Friend Invitations or Referrals

44.  Sharing

45.  Tagging

46.  Group or Forum Level of Activity

47.  Profiles or Accounts Created by Users

48.  Profiles / Accounts (Active, Inactive, New)

49.  Ratings

50.  Reviews

51.  Conversion Rates due to Ratings/Reviews

52.  Testimonials

53.  Customer Satisfaction

54.  Widget Installations

55.  Mainstream media mentions

56.  Blog mentions

57.  Growth rate (sales, visitors, followers)

58.  Subscriptions (RSS, Podcasts, Channels)

59.  Links pointing to your site

60.  Target demographics engaged

61.  Social interactions

62.  Frequency of Interactions

63.  Poll votes

64.  Tags

65.  Contest Entrants

66.  Discount/Coupon Redeem Rate

67.  Leads Generated

68.  Alexa/Compete ranking

69.  Attendees to Offline Events

70.  Affiliates joined

71.  Adoption Rate

72.  Market Share

11 Social Media ROI Myths. Uncovering the Truth:

1)     Social Media is Free. While using social media seems free on the outset, it does require time, skill, and money. Remember your time is worth something. But it takes a lot of time and dedication to keep your content fresh.

2)     Getting Viral is Easy. Unless you are a star, becoming a web sensation with your content can only occur if your audience cares about your brand or if you have a truly original product or idea that would excite users to the extent that they would put their reputation on the line and be compelled to share it with their friends. But it takes a lot of time and dedication to keep your content fresh.

3)     It is all about the Popular Social Sites. Some social sites make more sense than others. Myspace for example has a strong music community following and would be more useful for artists than LinkedIn. However, if you are a businesses looking to hire talent, they would find LinkedIn more useful. Do not rely entirely on one social network, but choose the most relevant that would help you succeed.

4)     If it is Amazing, then Users will Find it. While viral content can spread very quickly, it is important to be the first to light the fire and help the virus to spread through better SEO, tweeting, blogs, commenting on other blogs and sharing it with your friends or followers. Do not expect magic to happen by itself. It needs initial momentum.

5)     You Can Not Build Meaningful Relationships Online. This is far from the truth. Social media can help you connect and interact directly with your target audience globally, not just locally. Even if they do not turn into revenue, they could provide you with valuable insight, reaction and constructive criticism that can help you significantly.

6)     Social Media is for Young People. While this might have been true in the initial stages of social networking, the demographics of a social media user varies and crosses all age ranges.

7)     It is a Trend Waiting to End. Social media is not a fad. It has become a part of life and will only grow with the increased use of smart phones that encourage social interactions online.

8)     Giving Products Away for Free means Zero Profits. Not necessarily. By giving products away for free you can gain subscribers, visitors and grow your email list. More importantly, by providing free content, you grow your brand and credibility. The more you give away through social media, the more you receive from your audience.

9)     It is Easy to Master Social Media. While social media can theoretically be easy to understand, there is a learning curve and expertise that only experience can bring. The best social media marketers have a track record in regards to social media activity and interactions on the web. They have a clear understanding of how social media, measurement and what your audience wants using the proper social etiquette to achieve desirable results.

10)  Social Media Does Not Help Branding. Social media can be useful for receiving feedback from customers as well as used as a tool to manage your brand’s reputations. It gives you the unique opportunity to listen to your audience and find out what people are saying about your brand.

11)  Social Media Can Not be Measured. This is the biggest misconception. You can monitor your social media efficiency using Key Performance Indicators that are tied with your overall organizational goals and strategy. Using tracking tools and analytics, all engagement using social media can be measured and be used to make decisions that would affect your organization positively in reaching its objectives.

25 Reasons Why Every Business Should Use Social Media

1)     Increase your brand equity, awareness and recognition

2)     Own your brand’s social presence on the web

3)     Monitor your brand reputation

4)     Build your brand and create meaningful relationships with your audience

5)     Take your message directly to your consumers and interact with them

6)     Receive meaningful feedback and constructive criticism

7)     Be aligned with technological advances and how your customers interact today.

8)     Seem current and “new school” not “old school.”

9)     Increase your search engine rankings and receive search engine optimization benefits by improving your linkability factor i.e Obtaining natural links from others pointing to your content

10)  Tap into new audiences

11)  Increase customer loyalty and stickiness with your product or service

12)  Increase traffic and sales

13)  Increase your Return on Investment

14)  Be able to measure every social engagement and tie it with an outcome and decision-making

15)  Build your email list

16)  Keep your audience engaged with new, fresh content, thus preventing brand obscurity

17)  Establish yourself as an expert

18)  Create buzz and enable word of mouth

19)  Compete with larger competitors

20)  Lower marketing costs and increase savings

21)  Target niche audiences that would be interested in your product/service

22)  Be more accessible to your audience and increase the communication factor

23)  Showcase all your products/services and receive constructive feedback

24)  Find out exactly what your customers want and improve your offering to them

25)  Your customers can become your street team and evangelists. They can spread the word about how great your products or services are

Why Measuring Social Media Engagement is Crucial to Your Business

Improving social engagement is a problem if you can not quantify the level and quality of the social interactions you are having with your audience. Make sure you define quantifiable, explicit goals that can help you calculate Return on Investment.

It is important that you pay attention to what the numbers are telling you instead of focusing only on the numbers themselves as a feel-good statistic. Attach metrics tools, such as Google Analytics, to help you decipher what the numbers mean. Every social interaction should be tracked and translated into a meaningful conclusion that can aid strategic decision-making that affects your objectives. Perhaps your objective might be improving your brand image or getting feedback for product development, so sales might not be as relevant as positive ratings, reviews or feedback. Interpreting the data is key to achieving this. Finding trends and tracking them back to where they began is the important for measuring your ROI.

Without the appropriate measurement tools and tracking every social marketing campaign, you will be operating inefficiently and blindly. Neglect the dangerous myth that claims that social media activities can not be measured and used to impact effective strategic decision-making. Your business long-term success relies on it.