As social media continues to gain more traction throughout companies, practitioners in the space will be asked the tough questions about the business value of their efforts in the space. If you find yourself in this position, don’t let the acronyms KPIs and ROIs spook you.
The benefits of social media typically fall into one of two buckets: making money or saving money. While those may seem like blanket buckets, look at the examples below to see how these buckets can help ease reporting.
- Generating sales
- Increasing brand awareness
- Generating new product ideas
- Increasing customer loyalty
- Increasing purchase rate
- Reducing customer service time
- Increasing awareness of product issues or improvements
- Reducing customer churn
- Identifying customer issues with product/services
- Reducing push marketing spend
Please notice that fans and followers are not mentioned in the metrics above. The reason for this is that they are a soft metric that by themselves mean nothing to the executive suite at your company. To make them meaningful for your business, you will need to couple them with one of the two buckets mentioned above. For example if you have 20,000 fans on your Facebook page and generate 200 orders for $6,000 in the past month, you can begin to place business value on these fans. The 200 orders can show that one percent of your fan base ordered in that month and their average order value is $30. If you measure this out over time, you can begin to map to scale and predict future sales on the active order base as it continues to expand.
If you are leveraging social media as a communications platform to reduce customer service or churn, you can tie a value back to it just as easily as the revenue metric above. If your Facebook page of 10,000 fans actively assists one another with questions pertaining to product uses or general maintenance that would be filtered to your customer service team – aside from building a community, these peer-to-peer conversations can be tied to a reduction in calls to your service department. To measure the value to the business, count the number of interactions and multiply that by the general cost in man hours for handling these types of calls.
The formulas and examples listed above are just some of the ways that you can tie a value back to your social media efforts. As the social space continues to grow, the executive suite at your company will look at it like every other section of the business and expect reports on how it benefits the company at the end of the day. If you and your team cannot build up a system to report on these benefits, the company may look for someone who can.
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Image – alter1fo