What Does Social Media Success Look Like?

JeffEsposito
Jeff Esposito PR Manager, Vistaprint

Posted on June 29th 2011

What Does Social Media Success Look Like?

Success - P'tit Bazar 2007 (02)

As social media continues to gain more traction throughout companies, practitioners in the space will be asked the tough questions about the business value of their efforts in the space. If you find yourself in this position, don’t let the acronyms KPIs and ROIs spook you.

The benefits of social media typically fall into one of two buckets: making money or saving money.  While those may seem like blanket buckets, look at the examples below to see how these buckets can help ease reporting.

Making money

  • Generating sales
  • Increasing brand awareness
  • Generating new product ideas
  • Increasing customer loyalty
  • Increasing purchase rate

Saving money

  • Reducing customer service time
  • Increasing awareness of product issues or improvements
  • Reducing customer churn
  • Identifying customer issues with product/services
  • Reducing push marketing spend

Please notice that fans and followers are not mentioned in the metrics above. The reason for this is that they are a soft metric that by themselves mean nothing to the executive suite at your company. To make them meaningful for your business, you will need to couple them with one of the two buckets mentioned above. For example if you have 20,000 fans on your Facebook page and generate 200 orders for $6,000 in the past month, you can begin to place business value on these fans. The 200 orders can show that one percent of your fan base ordered in that month and their average order value is $30. If you measure this out over time, you can begin to map to scale and predict future sales on the active order base as it continues to expand.

If you are leveraging social media as a communications platform to reduce customer service or churn, you can tie a value back to it just as easily as the revenue metric above. If your Facebook page of 10,000 fans actively assists one another with questions pertaining to product uses or general maintenance that would be filtered to your customer service team – aside from building a community, these peer-to-peer conversations can be tied to a reduction in calls to your service department. To measure the value to the business, count the number of interactions and multiply that by the general cost in man hours for handling these types of calls.

The formulas and examples listed above are just some of the ways that you can tie a value back to your social media efforts. As the social space continues to grow, the executive suite at your company will look at it like every other section of the business and expect reports on how it benefits the company at the end of the day. If you and your team cannot build up a system to report on these benefits, the company may look for someone who can.

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Image - alter1fo

This is post is part of the Institutionalizing Social Media series. To see previous installments or to learn more about the series, click here.

JeffEsposito

Jeff Esposito

PR Manager, Vistaprint

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Comments

sturnock
Posted on June 30th 2011 at 6:18AM

Good post Jeff. Certainly, speaking from the socialrecruiting world’s point of view, the old methods in KPI are out of the window as they are firmly rooted in static activity that just do not work in measuring social media performance. A first measure and milestone of success may be in implementing social media strategy in the first place! For us the cost of social [recruiting] media is ‘time’ but also in the moving from static to digital hub strategy in the first instance that may have incremental price tags  - so indeed, questions are being asked regarding ROI at the outset. The people with the cheque books may not understand the concept of social media and can tend to only see social media as a cost saving exercise and the sign off and c-suit stage likewise may also be concerned about impacting existing revenues which are successful - but rooted in the traditional streams and hence want to see ROI and test cases before any investment. As such examples do not reliably exist yet then a conundrum! Now what I also find is also evident and probably for most organisations, is that whilst quick to ask for ROI, many never fully measure nor measured  or understand what is was in their existing or previous buckets.

TomPick
Posted on June 30th 2011 at 11:01AM

Excellent post Jeff, and I guess great minds (or maybe your great mind and my just-okay one) do think alike - I wrote this post about a month ago: What Does B2B Social Media Success Look Like?

Posted on July 16th 2011 at 9:08AM

Another thought is the negative effect of being absent from Social Media.  If all your competitors are there, consumers begin to look at your brand's absense as being old and out of step -- or worse they don't think of you at all.

With the rich demographics of social media, you've got to show up to stay in the game. Being part of the conversation means that your company or organization is considered when consumers are making decisions.