8 Essential Systems to Determine the ROI of Social Media Activation
Social media is no longer thought of as an "experiment" but as a new communication platform that businesses can use to connect to their customers, prospects, partners and employees. According to a 2011 study from the University of Massachusetts at Dartmouth (http://bit.ly/v3Vk9R), the majority of the Fortune 500 companies have incorporated social media across multiple channels (blogs - 91%, Twitter - 62% or Facebook page - 56%) into their marketing mix. The positive impact of these "experiments" has subsequently increased social media budgets - approximately 10% according to the August 2011 CMO Survey (http://bit.ly/uRDdwA) - for additional community managers, content services and social media tools. In the confines of the executive suite, the CEO"™s primary business objective is to increase shareholder value through profitability. Consequently, the CMO is tasked to translate social media activation metrics - "friends of fans" to "fans" to "customers" - into traditional business metrics - leads generated, leads converted, return-on-investment (ROI) "“ to demonstrate that the injection of social media into the marketing mix is worthy of the additional investment. This transformation within today"™s enterprises from simple social media marketing to scalable social media communication programs is what marketers are calling "Social Business". Usually driven by the CMO, this digital marketing metamorphosis requires the entire organization (e.g. marketing, PR, investor relations, technology, finance, HR, sales and legal teams) to collaborate and to plan strategically. The organization must consider the structural impact on: 1. Resources (e.g. budget, headcount, time) 2. Processes (e.g. content approval paths, user provisioning, education) 3. Compliance (e.g. auditing & discovery, data retention, data security) 4. Analytics & Reporting (e.g. system integration, actionable digital analytics) David Armano of Edelman Digital addresses planning for the resources, processes and compliance issues in his post "Social Business Planning: Aligning Internal with External" (http://choma.in/twgssj).
How would you measure and report the impact of your "Social Business"?
Measuring social media is not difficult. It is connecting the social metrics (both directly and indirectly) to business metrics like profitability that is cumbersome. In order to effectively measure and report the ROI of social media to the CEO, there must be a dashboard that integrates social systems and enterprise legacy systems. The "social business" dashboard allows for consistent metrics across the entire company, better result discovery, and faster decision-making. Although there are a plethora of digital marketing legacy systems and social media tools with similar messaging and a lack of product differentiation, the following list of systems will help you define the core systems to help measure the ROI of social media:
Legacy Digital Marketing Systems
Ultimately, there is a need to reconcile social profiles and leads with traditional web analytics and lead nurturing (CRM / Marketing Automation Systems). 7. Web Analytics: Although social helps with website traffic and SEO, the use of a shared link tagging architecture between web analytics packages (e.g. Google Analytics, Omniture, Web Trends, Coremetrics) and URL shorteners can yield powerful "click-to-conversion" ROI metrics. Click-throughs from your social media messages can be tracked and sourced. You now have the ability to measure and report the direct impact social media can have on your "conversions" (e.g. a purchase of a product, a download of a coupon, or a download of a whitepaper). An enterprise can take that data and track the conversion of those leads in a CRM to get a full picture of social media"™s effectiveness in its customer conversion funnel and overall ROI. 8. Marketing Automation / Traditional CRM: Ultimately, companies need to reconcile social contacts collected in social media activation programs and leads with traditional CRM systems. This mapping and feedback loop will let brands understand the extent to which these programs affects sales and the customer purchase behavior. As companies"™ social media programs mature, it is an imperative to build an infrastructure and environment to capture and measure ROI. It starts with the integration of a combination of social platforms and existing digital marketing systems. By all means, this not meant to be a comprehensive list. This "core" system integration will help marketers clearly calculate and effectively report the impact of their social media lead conversion efforts. This is an essential step towards transforming your company into a "social business".