Crash knowledge on social media ROI
Everyone is talking about social media ROI and the feelings are quite opposed. On the negative side of the conversation, the negationists argument about the myth of social media ROI and how this can be measured, so then attacking those that affirm to be able to do it. In the middle, you will find other group of people that will pretend having found the Grail of Social Media ROI but… they use artefacts which are not ROI at all (i.e. IOR).
Well, social media ROI does exist and can be measured. There are some issues in the path to get to the final figure but does not mean it is impossible. Let me show you the stepping stones:
- Define your strategy; this is not just your digital strategy, but your whole business strategy.
- Align your digital strategy to your business strategy; this will help when setting your KPIs and linking them to your financial KPIs.
- Understand your marketing-mix and how ‘social’ affects it; the traditional model considers price, product, promotion, and place.
- Focus on your conversion funnel; you can use the AIDA model (Awareness, Interest, Desire, Action).
- Detect the drivers of conversion and measure them (i.e. Facebook fans helping with raising awareness?, RT’s creating leads and converting into orders?).
Now you must be thinking this is too theoretical… not really: for people coming from e-commerce this is easy peasy; they have been doing it from ages and assure they are the only ones being able to measure the real ROI. Anyway, neither they are the only ones that can do it nor this is the real ROI.
As you can imagine there are always miscalculations, errors of measurement and mostly important, the multi-attribution problem. On top, there is the problem of estimating the conversions for off-line sales. Well, I am telling you: this is possible… but it will require further actions. In the meantime, keep up with the definition of your strategy and identify your KPIs.
Which ones are you using at the moment? Have you linked them to commercial and financial outcomes?