A Hammer Isn’t a House – Don’t Confuse Tools with Metrics
Posted on 02. Jun, 2011 by Jay Baer in Blog, Small Business Internet Marketing, Small Business Marketing, social media KPI, social media marketing, social media ROI, social media success metrics, social media tools
Last week I spoke about The NOW Revolution at a dinner for 50 or so social media and email marketers, all employed by major corporations based in NYC. It was a great time. Steaks were eaten. Wine drank. Books signed. Interesting conversation participated in.
What struck me most, however, was a chat I had with a Director of Social Media for a multi-national brand. She asked me several questions about specific social media measurement tools, and what I thought of each of them. She remarked that she really liked the statistical packages of certain tools based on how they were able to compare data to her competitors, and export that data into understandable formats, and so forth.
I know I was a massive disappointment to her (continuing my lifelong trend of disappointing most women), because I answered every inquiry the same way: “I like their software, but I don’t know if I like it for you.”
Tools Don’t Pick Metrics
It’s terrific that the marketplace is bloated with companies that are offering whiz bang software to listen, respond, measure, and analyze social media. It’s the fanciest bunch of calculators ever devised, and every company in the space tries to differentiate by chopping up the same pile of data in visually compelling ways.
But you can’t be seduced by a tool on your quest to effectively measure your social media program. That’s like recognizing that you love mangoes, and becoming a vegetarian as a result.
You have to know WHAT you are trying to measure first, and then audition candidates for HOW to best perform that measurement.
There’s a lot of excitement about social media, and increasing excitement about social analytics. But you have to tackle it in the proper sequence.
Social Media Metrics Sequence
Pick social media measurement tools as step 7, not step 1
Don’t fall in love with software, or any one metric so much that it clouds what makes sense for you to measure. If you do, it creates statistical gerrymandering and moves you away from focusing on business level successes.
The 6 Step Process for Measuring Social Media
Posted on 31. May, 2011 by Jay Baer in Blog, Small Business Internet Marketing, Small Business Marketing, social media KPIs, social media measurement, social media ROI, social media success metrics, Social Media Success Summit
Can social media be measured? If course it can. But it’s not always easy. For a full and very specific account of how to measure social media in your company, pick up a copy of The Now Revolution, or Social Media ROI (by Olivier Blanchard).
However, here are the basics to consider, drawn from my presentation “How to Hug Your Calculator” last week at Social Media Success Summit 2011.
Step 1. Understand How Social Fits in Your Company
What makes measuring social tricky is that HOW your company uses social media changes the metrics that makes sense for you.
Remember, the goal is not to be good at social media, but to be good at business because of social media. Thus, you first have to understand your business level objectives, and how social media can support them.
Step 2. Know What You Can Measure
Not every company has access to the same metrics. If you’re an e-commerce company, you can measure different elements of your social program than you can if you’re not an e-commerce company. Understand what is possible, and then remove metrics that aren’t relevant.
Step 3. Decide on ROI vs. Correlation
There’s only one way to calculate ROI (return on investment). It’s sales minus expenses, divided by expenses, expressed as a percentage. There is no other formula. But sometimes, getting at true ROI is difficult, especially on the “return” side.
In those instances, you might opt to instead examine how social media success ties to business success over the long haul, and make correlation studies about that relationship. What you want to see is a situation where business success increased in lock step with social success (or slightly trailing social success). You can’t prove that social caused that success, but it sure looks fishy.
True ROI is a better equation, but sometimes is too difficult to get at – and not just for social media, but for TV, radio, print, event sponsorships, outdoor, and your customer service department.
Step 4. Select Metrics
Once you’ve gone through the first 3 steps, you can pick actual metrics that make sense for your company. Pick them BEFORE you get heavily involved in social media, to reduce the temptation to pick metrics that support your position down the road.
I’m a big proponent (as we discuss in The NOW Revolution) of picking approximately 3 metrics, and seeing how they “fit” for your company. Sometimes measuring too many things is worse than measuring too few.
Step 5. Share the Data Widely
If you want your whole company supporting your social initiatives, it will help if the whole company (more or less) has access to the scoreboard. Don’t treat social media results like the nuclear codes. Sharing your results will inspire the internal discussions and ideas necessary to take your program to the next level.
Step 6. Embrace Anecdotes
It’s not mathematically defensible in the way ROI is, but you should try to include anecdotes in your social media metrics. Ask your operations, customer service, and community management teams to document circumstances where you turned lemons into lemonade, delighted a customer, or just did something awesome in social media. Sometimes those unique case studies create more internal support than a whole stack of spreadsheets.
A New Way to Calculate What Facebook is Worth to Your Business
Posted on 23. May, 2011 by Jay Baer in Blog, Email Marketing, facebook, Facebook fan pages, facebook metrics, free social media tools, Small Business Internet Marketing, Small Business Marketing, social media ROI, social media staffing, social media success metrics, social operations
Facebook for business is email newsletters 2.0.
You’re trying to accomplish the same things on Facebook that you are in email, aren’t you? You want to keep your business top-of-mind among people that are already aware of you, and encourage those people to buy again and tell their friends.
The number of Facebook “likes” you’ve accumulated is akin to your email list. The number of impressions your Facebook musings receive (findable in your Facebook Insights report) is akin to your email open rate. The number of thumb ups and comments on your musings is your Facebook feedback rate, which is statistically similar to click-through rate in email.
I’ve been thinking about the mechanical and psychological similarities between email and Facebook for quite a while, and some additional thoughts on these similarities can be found here.
But, until being inspired by a recent issue of AdAge (whose coverage of social media has gotten vastly better in the past 18 months), I’d never thought about valuing Facebook interactions within an email framework.
Valuing Facebook Through an Email Prism
Almost every company has some sort of email newsletter, and that communication channel has a cost associated with it, comprised of fees paid to send the email using a company like ExactTarget (client); fees or staff time needed to design email newsletters; analysis time; and probably some business rules and marketing time to think through sequencing, offers, subject lines, etc.
You can easily determine what that program costs your company on a per email basis, and what the equivalent “value” of your Facebook impressions are, based on your email investment. (download the spreadsheet below to help you calculate)
Ideally, you should now use the formulas above to determine whether a Facebook impression has a higher cost to your company (design and management only, since there aren’t any sending costs on Facebook yet) than does an email impression, and adjust your valuation accordingly.
Is this an appropriate way to calculate Facebook’s brand value? I know there’s been other studies that conclude a Facebook fan is worth $100 or whatever, but that’s based on surveying and presumptions of downstream purchase by advocates, etc. I think I like this model because it uses something we’re already paying for (email) to determine the brand-building value of something that’s a newer addition to the marketing program (Facebook). But this model doesn’t prove ROI because there is no “R” in this equation. We are assuming that an impression on Facebook (or email for that matter) will yield more in return than it costs your company in investment. We can model that too, but that’s a post for another day.
How does this strike you?
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