One of the issues I see a lot of business people still trying to wrap their heads around is how to measure the effectiveness and value of their social media investment. In a lot of ways, it’s the question because no online effort is free. Even if all the tools are free, every campaign still takes time and effort, which you pay for by the hour in most cases. In almost every case where you commit to an online project the analytics will be squishy and gray at best, and you’ll have to come to terms with the immutable fear that your people could be spending their time and energy elsewhere. The fear is a given, and if you don’t have it’s because you’re not really weighing your options correctly.
Here’s the thing, you’re not alone. We’re ALL trying to figure out how much time and energy to pump into this new medium and what the right approach and mix is. No one has it right. Every situation requires a unique approach. Consumers are fickle. Attention is fleeting. The ecosystem is mercurial at best. For better or worse, this is the state of affairs and the credibility of anyone who tries to sell you on a proven formula should be questioned ruthlessly.
So if no one has a formula, what the hell do you do? Simple, you take everything you know about your customers, what they like and what drives sales, you make an educated guess about how to engage them in a way that drives sales and you go for it. This is where measuring your progress in the right context is key.
Always Put Your Engagement Metrics In To Business Context
If you only take one thing away from this post it should be that your starting point for designing any social media campaign should be one question “how is this going to drive business”. I wish I had a dime for every post that has “how to measure social media” in the title but never talked about revenue. You can track the ever-lovin’ out of YouTube views, blog comments, followers on Twitter and watch those stats increase over time till you’re blue in the face, but if you have no idea how it’s affecting your bottom line, you’re just spinning your wheels and burning cash.
Make no mistake, it’s easy to think you’re doing well when you’re not. That’s where a lot of companies fall down and over commit to projects that are actually hurting them. For example, your company creates a funny YouTube video. It’s got clever product placement and is meant to and act as marketing for your product. You’re tracking the online stats and you see is that tons of people are sharing it and that views are way beyond anything you could have imagined. You get psyched. Your boss is ecstatic. Everyone’s celebrating 80’s style and throwing you high-fives.
Here’s the rub. If you’re only tracking engagement, your marketing department is going to think the YouTube video that cost you 2 weeks of your peoples time and “just $5000″ in equipment was a great investment. But then you look at the metrics in the context of your sales and the data tells a different story. Sales are still static. Congratulations, you’ve just learned that you’ve wasted $5000 and two weeks worth of a team’s pay that could be spent elsewhere. $5000 in fliers handed out on the street at a Starbucks line might have gotten you closer to your goals and taken a day. Without the context of the sales/revenue data, you just don’t get an accurate picture of what’s going on and how effective your efforts are. This is a totally plausible scenario and it happens every day.
The good news is that if you start by asking the right questions and put every campaign in context of metrics that are meaningful to your business, you’ll significantly reduce your risk, and you’ll set yourself up to learn quickly from your mistakes if you do fail and you can pull the plug quickly if you’re not tracking the way you thought you would be.
This is the reality of social media. It’s the smart approach. Take an educated guess and go for it, measuring your progress in a way that is meaningful to your bottom line. Know that you’ll guess wrong sometimes, miss the mark and take a financial hit. Nothing is free and everyone fails a few times. It’s part of the game. The trick is to be able to spot the times that seem like you’re doing well, but you’re actually failing, and to fail fast, pull the plug and learn from the experience.
Restaurant owners are quickly discovering how to use social media tools like Twitter, Facebook and Yelp to their advantage and drive customers to their tables, but there’s a guy in Wisconsin doing it better than almost anyone else.
Joe Sorge, who runs a burger joint in Milwaukee called AJ Bombers, shot me a tweet yesterday to tell me about a Foursquare party they had this week that brought a flash mob of 161 Foursquare users to his restaurant. My eyebrows shot up when I read that number. 161 check ins in one day?! How could that be? There are only about three or four hundred Foursquare users total in Milwaukee?! Over 150 of them were in the same place, on the same afternoon?
When I called him up, Joe explained. They came to earn the highly coveted and elusive Foursquare “Swarm Badge” – something you can only get when 50 or more Foursquare users check in at the same place at the same time. I hadn’t heard of it, but apparently the promise of this coveted Foursquare badge can really draw a crowd. Read More
If you sell online, pay attention to the data trail your customers leave. There are golden nuggets of information about what your customers are like and what they want everywhere; Some really good stuff can be found in customer reviews, automated “customers also bought” or “you might also like” recommendations (just to name a few). Paying attention to these details can lead to great insights about what your customers actually want, how they use your product and what their other interests are. If you’re an author, what other books are they buying when they purchase yours? If you’re selling electronics, what are customers bundling their purchases with? You’ve got to ask yourself these questions. It could tell you a lot about services you should be offering, where your product might be lacking or even what partnerships and opportunities you might seek for win-win promotions.
This (above) is just one example. I’ve talked about how tons of people are hacking their Flip cameras because the company isn’t listening and offering a wide-angle lens adapter. There are a ton of blog posts and YouTube videos about how to glue-on wide angle lens adapters to make the Flip more useful…and these lenses only cost 30 bucks. If the company was listening, they’d be partnering with a lens maker (or making their own) and offering a premium version of the Flip with an adapter included. The trail of breadcrumbs around the Flip already shows that people are willing to pay for the parts and go through the extra hassle to get the improved performance, so this is a no-brainer.
What’s the trail of breadcrumbs around your product telling you about your customers?
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I spent a couple of happy, quiet hours last night with my nose in Pamela Slim’s book Escape from Cubicle Nation. She makes some powerful arguments for why passion is a necessary ingredient to a happy work life. This well worded bit of wisdom stood out:
“What many people don’t realize is that when you force yourself to do something you don’t want to do, you have to deplete the energy from your body to do it. When you make it through a week where you have forced yourself to do work you don’t enjoy, you will feel exhausted, drained, and in need of martinis, industrial-strength aspirin, and/or face-planted-in-pillow rest.”
“When you do things you love, your body generates energy naturally. You may work an equal number of hours, or more, than when doing work you don’t enjoy, but the difference is you will feel spent, not depleted.”
You can’t really say it better than that, can you?
This short video was posted by Chris Brogan a few days ago. I love finding real-life stories about how small business owners are successfully using social media to increase their business. Joe Sorge, who runs AJ Bombers in Milwaukee, Wisconsin shares how he uses a tool to humanize his business and keep in touch with customers.
I’ve heard the advantages of shifting from traditional marketing to social media marketing strategies articulated many different ways, but Jeffrey Hayzlett, Chief Marketing Officer at Eastman Kodak Company, does it best in this short video. His Four Es – Engagement, Education, Excitement and Evangelism – are spot on. It’s a smart, pithy way to articulate the big picture and what the shift in strategy is all about. The second video highlights another key advantage to marketing on the web – the ability to be agile, and to respond quickly to feedback.
Here’s a smart post from Gary Vaynerchuck. He’s right about this. The way we are connected to people, products, brands, celebrities etc is beginning to change what customers/fans are expecting from them. Because consumer behavior is changing, brands need to adjust and fast.
