Unlike traditional ways to analyze the “business value” of a venture, such as a concrete return on investment (ROI), social media (SM) is a little more vague, a little more subjective—but incredibly important to almost every business. Everyone wants to be “liked”, retweeted, shared and commented about, right? Even for the most traditional of B2B brands, SM success if an ultimate goal. However, there’s one big question: What’s the real business value of social media analytics?
There are some big players like Nissan and Coca-Cola have freely admitted that they’re not really sure how SM changes their bottom line (even though they almost certainly have well-paid SM managers who should be explaining this for them). The term “social ROI” has been coined, but it remains a mysterious force for many. Since SM requires stringent analytics, and experts to translate it, it’s easy to give up on these marketing efforts, not optimize them, or simply not realize the real values SM offers even if it’s not always an immediate financial gain.
Looking beyond the budget
There are a few key things that’s universally true about the benefits of social media, such as the fact that the “real” value is in building and fostering relationships between consumers and the company. This isn’t always reflected in sales, which can be difficult for more traditional marketers to understand. The level of custom satisfaction and branding, which can be showcased in things like Net Promoter Scores, doesn’t look at finances but at how happy customers are and the “viral factor” of a company. Eventually, this may result in a higher financial ROI, but the shift is so slow moving that oftentimes SM may not be attributed to that shift.
One of the best models for analyzing the impact of SM on business is the Agent-Based Model or ABM, which does a decent job of predicting how SM changes user activity offline. For example, maybe SM is changing how many customers are calling to place an order, but this may happen well after the customer has perused the company’s Facebook page. Plus, if they’re not asked how they connected with the company, the business won’t know it was via SM or maybe the customer won’t even realize themselves that it was because of SM that they’re making a purchase (after all, who would tell Pizza Hut it was because of a Tweet that they ordered a pizza since the chain is already so well known?).
The penalty for rushing
Early in the SM game, a number of companies bum-rushed their efforts to “get online” at any cost without having a clue of how these platforms fit with their business goals. The end result were a bunch of subpar “online presences” and sadly, many businesses still haven’t recovered or figured out what went wrong. You can’t have an online SM presence as a business without setting goals, objectives, and determining tracking measures. But what kind of goals can a non-concrete analysis offer, anyway?
Examples might be generating some revenue, but that’s nowhere near the only option. Businesses can also consider cutting service costs (it’s often easier to field questions on Facebook than with phone calls), changing the brand image, optimizing operational efficiency, and gaining some new insight into target markets. Of course, the biggest overall goal is to build and sustain relationships, which can be analyzed via the number of fans, likes, comments, and if the links you’re posting on SM (such as to blogs on the company site) are getting visited or the bounceback rate.
Let goals overlap
Each of these example goals aren’t stand-alone and it’s actually a smart move to have some of them overlap. For example, who says you can’t up revenue while simultaneously cutting costs? It’s very possible to use SM as a PR tool, like when Zappos tapped into Twitter for some totally free (and very insightful) market research which helped shape their business. Likewise, Comcast keeps a Twitter account that’s used exclusively to shape branding and share company news that’s truly interesting.
Dell has had great success on Twitter, boasting 1.5 million followers and upping their revenue over $6 million in just two years. However, a real leader by example is DKNY which sidestepped a veritable crisis by tackling copyright issues and explaining on Facebook what went awry. SM provides a platform to connect directly with the public in a way that’s unprecedented. It’s time to ditch the ROI tunnel vision and start focusing on what SM can really do, and how to analyze those results.
What marketers need to ask
Take a closer look at three key questions: How much (as in how many people is SM reaching), who (who are they and are they the target market) and did it work (which is by far the most challenging to answer). However, the first two are pretty easy to analyze, so focus on the third, keeping in mind that the ultimate goal is to go (and stay) viral, relevant and ever-growing. There are metrics which can gauge the customer service parts of SM along with the virality potential.
Some companies can have great success with analytics such as conversion tracking, especially if it’s an ad-supported website, and understanding exactly what content is driving that traffic is gold. However, consider that these two types of analytics is all about optimizing the metrics for “near term success” and doesn’t look at the overall efforts of a company.
Get On Board with Cloud BI
Using cloud business intelligence (BI) applications, business users can integrate social media data flows and analytics with their internal data, such as sales or product data. This data can come from Salesforce for sales, Quickbooks for accounting, or entire database. Think BigData sources or SQL. There are seemingly endless data sources, and you might think you’re putting that data to full use, but is it being optimized? What about that data tucked away in Dropbox, Drive, Access, or Informix?
Making the cloud work for your BI is all part of not just optimizing data and social media strategies, but also streamlining processes, reducing double work and even greening up the environment. You already have all the data gathered and (hopefully) organized and sorted. Why isn’t it playing a crucial role in your SM analytics?
Is SM worth it?
Don’t just randomly choose a SM platform, but look at the upsides of the channel (by size alone Twitter, YouTube, Facebook and Pinterest are good contenders), your industry and the goals. Not every SM platform is a good fit for every business (this also includes the biggies). Even more importantly, not every single business will experience success with these platforms, and no matter the business it’s necessary to put in time, effort and understand the platform and audience.
The business value of SM analytics can be immense, but don’t forget that data is useless if it’s not properly analyzed. This isn’t a short cut, but yet another tool for understanding your consumers and improving the business.