With so much unicorns and rainbow nonsense floating around the web, it’s easy for your boss to think of social media as little more than wasting time on Facebook. When the thought leaders are saying it’s impossible to measure the ROI of social media, it’s no surprise executives are wary of investing in it.
If your boss asks you to justify the time you’re spending on Twitter, asking him what the ROI of putting your pants on in the morning isn’t going to get you far. Is it?
The antidote to the puffery rampant in social media circles is science. Hard data and facts about social media. Numbers-based measurement of reliable and repeatable campaigns is the only way social media will become a respectable field.
Businesses exist to make money, not friends. It can be easier to get our friends to become paying customers, but it’s the customer part that’s the real goal, not the friendship. Social media must be measured in dollars and cents. And if it can’t be, it doesn’t make sense to keep doing it.
Measuring stuff like “engagement” or “reach” is great, and I recommend advanced social media users do it. But you must understand that those numbers are merely proxy metrics for what really matters: the bottom line.
The amount of actual, hard money your social media marketing efforts are generating is the first and most important thing you should be measuring. Don’t worry about measuring anything else until you can do that.
It’s not really all that hard to measure the ROI of social media either. Worry about accuracy rather than precision. If I step on a scale and it tells me how much I weigh in whole numbers, that’s accurate but not precise. A digital lab scale would tell me how much I weigh in decimal, to the tenth or hundredth place.
Use coupon codes, referrer analytics, tracking tokens, special offers and landing pages. Get a baseline for how much cash social media is bringing in. If you miss a few sales here or there, that’s not a big deal. In fact if your efforts are only producing barely enough sales to be worthwhile, you’re doing something wrong. Obsessively track the up or down movement of that dollar amount.
Don’t let customer service or PR users of social media off the hook either. Customer service on Twitter can be faster than on the phone or via email, so calculate the cost per ticket saved, and the customer loss prevented.
For the PR folks: ask customers how they heard about you. Again, it’s about accuracy not precision here. Your work should be bringing in overwhelming numbers, so a few missed decimal places shouldn’t be the end of the world.
And if you’re not doing that, don’t be surprised when it’s an uphill battle to convince others that what you’re doing is worthwhile.
Print that image at the top of this post and hang it wherever folks need to be reminded.