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Proving Social Media ROI; Don’t Suck At It – Average Giant Marketing
 

ROIProving Social Media ROI; Don’t Suck At It

September 17, 2014by averagegiant0

social media ROI photo

 

You’re producing the most interesting, unique content on the web. You should get awards for your creativity and innovation in content creation. You’re creating the stuff of legends!

There’s one little hiccup. You can’t explain social media ROI because you’re not measuring anything after your “award-winning” content is posted.

This is a problem many social media marketers face. Sometimes we get so caught up in trying to create the content that will produce larger, more engaged followings, but we forget to set goals, and develop relevant KPI’s (key performance indicators) according to those goals.

On the other hand you may be measuring, and I hope you are, but you just aren’t sure about what you should be measuring according to the goals you’ve set.

In a previous post, “Social Media Marketing; You Don’t Know Jack About It!” one of the topics was measuring ROI (return on investment). I stated,

“ROI from social media is only limited to what is important to your business.”

“ROI from social media is only limited to what is important to your business.”

To that effect I realized that it’s difficult to know what social media metrics matter for what business goals. The goal of this post is to help you better understand what to measure in order to properly report about your goals.

 

 

Hootsuite Social media ROI

To start, Hootsuite has an amazing post on this same topic that I believe everyone should read. Here are their business goals, and what you should measure for them:

 

Goal #1: Increase social media engagement

Social media metrics to measure: Likes, Shares, Comments, Retweets, Mentions, Favorites

 

Goal #2: Increase customer acquisition on your website

Social media metrics to measure: URL clicks and traffic from social media

 

Goal #3: Increase brand awareness

Social media metrics to measure: Follower Growth Rate, % Change Over Time in Followers, Twitter Sentiment, Reach by Region, Clicks by Region

 

Hootsuite gives a detailed summary of what each metric means in the post. Like I said, I definitely suggest reading it.

Taking a different approach to defining and measuring each metric, I’d like to include the following on this list:

  • Increase lead generation
  • Increase positive brand sentiment
  • Reduce cost of customer service

 

 

Increase lead generation

One of the major benefits of social media marketing is its ability to drive traffic to your site. What the customer does once they are on your site is up to you.

Getting visitors to convert into sales leads is one of the most important things your website can facilitate. Having an email sign up, or some sort of opt-in form should be an essential part of your digital marketing plan; you do have one of those right?! Of course you do, let’s move on.

There are a few tools out there that can do this process for you, but I like to develop “guerilla” tactics just in case I’m working with a minimal budget, which happens often.

 

To measure where your leads are coming from:

  1. Create a unique lead capture tool (i.e. email opt-in form, newsletter subscription, etc.).
    • If you are using an email service like Mail Chimp this is very simple.
    • If you are using a WordPress site use your form builder plugin to create a new form.
      • It’s helpful to label it “Social Media” so you don’t confuse it.
    • Set up a splash page containing the unique lead capture tool.
    • Create a shortened link for that page and use it only when you post to social media.
      • I suggest using bitly, or some other url shortener with an analytics dashboard.
        1. This will help you see which social media channels are driving the most traffic as well.
      • Since the landing page and opt-in form will be unique, you will know that all visits and emails captured will come from social media.
      • To analyze:
        1. # of leads = total # of opt-ins
        2. Lead rate = # of opt-ins/ total traffic to landing page
        3. Lead conversion rate = # of customers from leads/ # of leads

 

 

Increase positive brand sentiment

Brand sentiment is the way your followers feel about your brand when talking about you on social media. Very few brands are even measuring this important metric. As brands become more social media oriented in their marketing, brand sentiment will become increasingly important. Customers are telling you exactly how they feel about your brand every day; are you listening?

There are a few tools to gauge brand sentiment. Most focus on Twitter. This is for good reason. Twitter is the ultimate sounding board. We won’t go into detail about why Twitter perfectly facilitates rants and raves; just know that if you ever want to know about your brand, go to Twitter, but I digress. Since very few free tools exist to facilitate measuring brand sentiment I’ve developed a work around. This is a time consuming trick, but it gives a decent understanding of how people feel about your brand.

 

To measure brand sentiment:

  1. Create the following recipe on If THIS then THAT ifttt.com (this is a fairly self-explanatory site.)
    • THIS = Twitter -> Any new favorite tweet by you
      • You must activate your Twitter channel first.
    • THAT = Google Drive -> Add a row to a spreadsheet
    • Add recipe
      • This will add a row to a specified Google spreadsheet on your Google Drive.
  2. Go to textalytics.com and download their Textalytics add-in for Excel.
  3. After downloading Textalytics, create a free account and download the “Sentiment Analysis API”
    • This will provide sentiment analysis for cells in Excel.
    • The free version comes 500,000 credits.
      1. One request = 1 credit
      2. You shouldn’t have an issue with using up the amount of free requests.
  4. Go to Twitter and favorite your last 100 mentions.
    • These are the Tweets that mention your username found in the Notifications tab.
    • For added data search your brand name, and branded hashtags and favorite those tweets as well.
    • From now on only favorite these types of tweets in order to keep this data “pure.”
    • 100 is a suggested number to give a good sized sample for a small business or brand and to provide easy percentages for each sentiment (positive, negative, neutral.) Larger businesses should look to a paid sentiment tracker, as you may have hundreds or thousands of mentions.
  5. Export your Google Drive spreadsheet to an Excel file and upload into Excel.
  6. Add a column to the new Excel sheet for brand sentiment.
  7. Run the Textalytics Excel add in.
    • Click the Textalytics tab.
    • Set the range to analyze to the “Tweets” column.
    • The software will automatically add additional columns to your spreadsheet that will look like Table 1.
    • Focus on the “Polarity Tag” column as this is where the sentiment is noted.
      1. Definitions of polarity tags found in Table 2.

 

 

Table 1:

 

Text Polarity Tag Polarity Score Subjectivity
justin was bad N+ -0.8 OBJECTIVE
marvin was good P+ 0.8 OBJECTIVE
sara didn’t know anything NONE OBJECTIVE
adam is bored N -0.6 OBJECTIVE
john watched tv NONE OBJECTIVE

 

 

Table 2:

 

Positive Negative
P– very weak positive N– very weak negative
P- weak positive N- weak negative
P positive N negative
P+ strong positive N+ strong negative
P++ very strong positive N++ very strong negative

 

  1. To analyze, and gain actionable insights, consider using the following simple formulas.
    • # of positive posts/ total # of posts = % positive sentiment
    • # of negative posts/ total # of posts = % negative sentiment
    • # of neutral posts/ total # of posts = % neutral sentiment
      • Often times sentiment tracking tools don’t recognize the true sentiment of a phrase because they use keywords to prescribe sentiment, and do not understand slang or context. To counter this it is best to read each tweet and adjust the sentiment if needed.
      • Textalytics does a pretty good job of recognizing sentiment so you shouldn’t have to do too much adjusting.

 

 

Reduce cost of customer service

Customer service has become one of the key functions of social media. Most consumers are reaching out on social media for customer service, versus calling in to a hotline, email, or even going on a website. The instant nature of social media lends itself to being a great customer service vehicle. Now instead of employing an entire call center for customer service, company’s can hire a few people to monitor their social media just for customer service related issues. This can mean huge savings.

In order to understand the social media ROI for customer service you could hire someone to do all sorts of technical cost savings analysis, or you could do the following:

 

To gauge your current cost of customer service:

  1. Add up the total cost of customer service for your company.
    • Salaries
    • Additional phones (call center or customer service phones)
    • Additional phone bill (call center or customer service phones)
    • Divide this number by the total number of employees assigned to customer service to get an average cost of customer service employees.
      • Ex: Salaries and equipment = $100

# of CS employees = 5

Cost per CS employee = $100/5 people = $20/ person

  1. Figure out the average number of customer service calls or emails received daily and the average time spent answering each.
    • Add the total number of calls and emails.
    • Add the minutes each call or email takes to answer.
    • Divide the minutes by the calls to get an average time per customer service inquiry.
      • Ex: Total number of calls = 10

Total number of minutes on call = 100min.

Time per call = 100min/10calls = 10min/ call

  1. Divide the average cost of customer service from step 1 by the average time per customer service inquiry in step 2 to get the average cost of customer service per minute per employee.
    • cost of customer service employee/ time per call = cost of customer service per minute
      • Ex: Cost per CS employee = $20/person

Time per call = 10min/call

Avg. value of customer service per employee = $20/ 10min =  $2/minute/employee

 

To gauge your new cost of customer service (I’m assuming you haven’t actually started doing customer service via social media, in which case you can sub in your new numbers into step 2):

  1. Keep the number from step 1.
  2. Use the number of calls as the number of customer service tweets (we’ll use Twitter as it is the best social media network to facilitate customer service.)
    • As you switch to using social media, the number of customer service requests should go up due to creating a smaller barrier.
  3. Figure out the average time it takes you to respond to social media with mustbepresent.com.
    • Sub this number into the equation for avg. cost of customer service per employee in place of the time per call.
  4. Divide the total cost of customer service from step 1 by the average time per social media response in step 6 to get the average cost of customer service per minute per employee via social media.
    • Ex: Cost per CS employee = $20/person

Time per tweet response = 30 min/ tweet

Avg. value of customer service per employee = $20/ 30min =  $0.66/minute/employee

*As your response times decrease, the value of customer service per employee will go up.

Final thoughts on social media ROI

“Not everything that counts is counted, and not everything that’s counted counts.” This is especially true for measuring social media ROI. Don’t beat yourself up trying to measure every aspect of ROI for social media. It can get confusing, time consuming, and expensive. Instead focus on the metrics that are most important to your business and measure those.

“Not everything that counts is counted, and not everything that’s counted counts.”

It is important to note that these formulas are simply ways I’ve created to work around using sophisticated, often expensive, technology to figure out these important metrics. They are not perfect, but I hope they are useful!

If you are not using social media to increase leads, measure brand sentiment, and reduce the cost of customer service, you are missing out on some major benefits of social media. I hope this post helps you to think about social media ROI in a different, more provable way.

 

 

Are you measuring social media ROI? If so, what metrics are you measuring? Was this post helpful in determining new ROI measurements? Leave a comment below.

Photo by cambodia4kidsorg

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