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.