There are lots of so called “measures” that get touted as being able to deliver useful insights into the effectiveness and productivity of investments made in Social Media. Many tell you nothing of value, and are often misleading, but because they are easy and obvious, are often the ones used. Measures such as friends, followers, number of posts, even quasi mathematical ones that measure nonsense like the ratio of followers to followed are touted, but really tell you nothing of value, nothing that assists the process of building the returns from your investments.
However, there are three measures that will give a very good view of the productivity of your investments, the first two are easy, the third takes more work and understanding, but nevertheless can be accessible to even a small business without great technical and financial depth.
- Conversion rate. Not necessarily to a sale, but to something that you are asking visitors to do. Download a whitepaper, enter a contest, comment, offer a suggestion, etc. This requires the receiver of the message to actively participate, and take an action, to be converted in some way. The word “engagement” is often used in this context, and is a reasonable simile, but can mean different things to different people, so is more “fluffy”
- Amplification rate. This is just the number of shares, retweets, reposts, and embeds, and backlinks that an individual piece of content generates, and the rates overall of what you achieve. If your first level contacts amplify for you, over time, their contacts become yours, and evolve into your sales funnel.
- Financial value. This is obviously the holy grail, and there is no way I know to measure easily, but it is the reason most of us invest out time and resources in Social Media. Setting out to create a measure requires that you build a picture of your sales funnel, and have sufficient sensitivity in your data to be able to follow a prospect from the lead generation stage through to a transaction. This can be done with the integration of CRM and web analytic tools, but is generally pretty challenging for small businesses. However, if you know your average sales cycle times, sales numbers, and track the investments made in Social Media, you can get a reasonable picture using excel.
Being without a simple, and consistent way of measuring the impact of your investments when the tools are available and easily deployed should never be tolerated. The days of “black box” marketing are well and truly over.