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It's critical to measure results to ensure that you're getting the right information to make smart marketing decisions. With every emerging technology, a new array of metrics appears. Social media is no different.
Most of the professional analytics experts practicing in the social media space want you to believe that the new metrics they introduce are the ones that will catapult your business to the next level. In reality, most of these metrics are fabricated to validate their services and have little bearing on success. These "new" metrics create a lot of noise and often obscure real measurements of success. There is no doubt that the most meaningful metric will always be revenue. But it is possible to find other grounded metrics, tied to revenue, that business leaders can use to create predictive models for optimal use of social media.
In serial-entrepreneur and OfficeArrow Chairman Mike Lewis' book, Social Media Leadership: How to Get Off the Bench and Into the Game, he suggests that to measure most effectively, leaders need to align active listening with strategic goals and then calibrate those goals with paid media (the media you buy), earned media efforts (the attention generated by others), and site traffic. All media activities can then be mapped to near-term, midterm, and long-term goals. Reach, velocity, voice and Customer Lifetime Value (CLV) are four social media measurement components Lewis states are critical.
One key metric verified by Wharton research is reach-how far content (e.g., a topic, subject, or meme) spreads across the totality of the Internet. Reach emphasizes the importance of tracking conversations about your brand across everything from Forbes.com to Foursquare, because each channel is connected to-and can influence users on-every other channel.
Another important measurement is velocity, or the speed at which a conversation moves across the Internet. Using Social Strategy1's social media monitoring platform, Wharton also identified the velocity metric as vital to determining whether a hot-button issue is brewing (like a great deal, a product recall, or a pricing or service issue), whether marketing efforts are working, how quickly a product, service, or marketing message is adopted or shared; and, as importantly, crisis communications or management. Velocity is key and using an online monitoring tool is critical for measurement.
Voice of the Customer
The best indication of how well our marketing or other business efforts are faring comes directly from the voice of the customer. And we now have the power to hear every comment posted by these customers. When customers share their feelings on the same topic, or with the same sentiment about our brands, we can measure that sentiment and the reach or velocity of that conversation.
Customer Lifetime Value
All of these measures directly relate to Customer Lifetime Value (CLV) calculations. We know customer lifetime value helps us arrive at the dollar value of the long-term relationship with any given customer, revealing how much that customer will spend (or is worth) over a given period of time. By listening to customers en masse and breaking out buying components such as rankings, ratings, reviews, recommendations, loyalty, and advocacy, we have more data available to draw CLV insights and predict switching costs and churn.
The Internet has enabled a lot of key metrics that can generate deeper, more insightful data on our business. What business leaders need to do is tie those metrics together for the complete performance picture.
As not to be self-serving, we also got a second perspective from social media guru Avinash Kaushik who had a similar take on the key measurement components in social media. He recently published some particularly pertinent insights about assessing the value of your social marketing, and we wanted to pass along some of his comments.
Kaushik views evaluation in terms of "macro" and "micro" conversion rates. Sales might be your ultimate goal (macro conversions), but mini-successes that occur along the way (micro conversions) can be just as valuable, because not everyone who visits your website is looking to buy, at least not right now.
So Kaushik says you should look at four key metrics:
This measures the number of audience comments or replies per post -- initial interest rather than final sales. It's trackable separately on Facebook, Twitter, Google+, YouTube and your blog, but not among them. Improve results by knowing your targets and carefully aiming messages.
This measures your "sharing rate," such as the number of retweets per tweet or shares per post on Facebook or Google+. Again, you can track this on individual channels but not across channels. Noting what people are sharing, when, and their geographic location tells you where and how to focus your marketing.
How much do people like your content? Applause rate counts the number of Facebook likes or Google +1's per post; Twitter favorites clicks; or similar responses per blog post or YouTube video. It's measurable only via Facebook Insights and Google+.
You're using social media for small business to drive sales. But sometimes people visit your website for product research, tech support, or simply to read your latest blog article.
It's essential that you learn why visitors actually came to you and whether you helped them successfully accomplish their tasks. This will provide your strongest, most actionable insight into these important micro conversions.
Kaushik uses some excellent charts to illustrate micro and macro conversion metrics and explains how to apply these metrics to your paid social media advertising, too. He even recommends a free online survey tool developed especially for this purpose, called 4Q (for "four questions").
According to Kaushik, concentrating on these four meaningful metrics can tell you if you're making valuable marketing connections by using social media for your small business.
We think to measure most effectively, leaders need to align active listening with strategic goals and then calibrate those goals with paid media (the media you buy), earned media efforts (the attention generated by others), and site traffic. All media activities can then be mapped to near-term, midterm, and long-term goals.