Although many CMO's fall prey to the temptation to view social media as a popularity contest, better marketers know that it isn't about notoriety. It doesn't matter how many likes, shares, and followers you have or what random score you were awarded by Klout. These vanity metrics may look good on paper, but they may not have an impact on the ROI of your social media marketing program.
Social media can be extremely powerful as a marketing channel for achieving any number of goals – driving relevant traffic, building an audience, empowering existing customers, increasing awareness and influence, managing brand sentiment, etc. – but when it's all said and done, these goals are a means to another end. They're all essentially intermediary signposts that indicate you're doing a good job at driving revenue and boosting business. Since your ultimate goal is to increase sales, superior marketing practitioners and leaders know to focus on data that indicates how social is affecting your organization's bottom line.
Focus on the metrics that truly matter to your organization and the various social media goals that support these priorities. Here are five types of metrics that you probably should be tracking.
1. Customer Acquisition Cost
Also often referred to as, "cost per customer acquisition (CPCA)," your customer acquisition cost (CAC) reveals how much is being spent in order to drive new business via a given channel, tactic, or campaign. To calculate your CAC for a given month, add up your total marketing costs in that specific time period, including advertising, salaries, overhead, etc., and divide that sum by the number of new customers acquired in the same time period.
If your products are expensive, expect the CAC to be significant, but try to keep it extremely low if your products are on the inexpensive side. The longer you've been marketing on social media, the lower your CAC should be. When your analyses take both CAC and customer lifetime value (CLV or CLTV) into account, you're well on your way to determining ROI on your marketing efforts.
2. Conversions Driven
What is social doing to improve your bottom line? Ultimately, purchases are closed by your sales team or on your website. But where did they originate? Measure the volume of leads captured and sales closed via referrals from social media for the most basic and direct social ROI metrics. With the Oktopost social media management platform's conversion tracking functionality, you can correlate conversions with social channels, campaigns and individual posts.
Keeping tabs on how customers initially contented with your business will demonstrate the role of social in bringing in new customers and will allow you to compare social media performance with the impact of other channels. Tracking order transaction volume is key, but remember that not every transaction is of equal value – you also need to track metrics such as transaction size and transactions from repeat customers.
Source for credit: http://www.statista.com/statistics/187310/share-of-b2b-customer-acquisition-in-the-us-by-social-media-channel/
3. Onsite Engagement
Measuring clickthroughs is important, but it won't tell you anything about the value of these visits. You can gain a superior understanding when you look at website engagement metrics such as time spent on specific pages, average pages per visit, average session duration, repeat visits over time, and micro conversion rates. How does onsite engagement look when visitors are referred by social channels, compared to when they're referred by other sources?
One of the pitfalls of social media activity is that audience members often click on links only to leave your website fairly quickly, a sure sign that you need to place a greater emphasis on quality over quantity of clicks. When you know users from a specific social network are bouncing more than users from other networks, this is a sign that you need to be targeting your message for this social channel in a different way. Each social media channel was developed for slightly different purposes, has a bit of a different audience, and encourages specific behaviors. Tweak your messaging to fit each channel's community and track whether bounce rates drop as a result.
4. Shares and Impressions
If your most important goals include boosting brand awareness, content distribution and building an audience, then you're active on social media in order to tap into the viral potential of these platforms.
Facebook's Insights module provides businesses with the number of people who reached for each post. Remember, though, that this figure is not the actual number of people who read your post, but rather the number who saw it in their feeds. To find out how many were actually interested in the post, reference Facebook's virality rate, and you'll see a percentage of people who were reached and those whom engaged in some way. Twitter's new Analytics platform offers similar reporting. Look at how many posts you are sharing, how many people can potentially be reached, how many have been reached, and how many took action as a result.
5. Support Tickets Referred
Social media is increasingly being used as a customer support channel, a trend that affords companies opportunities to score major brand sentiment wins by being helpful and attentive publicly. Dedicated support teams, not to mention the infrastructure and tools that they require, can be extremely heavy on resources. Any time your social media team enables your support team to do its job more efficiently, you come out ahead.
How many support tickets were opened as the result of engaging with users on social media? How many questions were answered or issues solved without the involvement of your customer service department? Many of the top CRMs make this type of tracking simpler, but social management dashboards and search tools can help too. When social media engagement succeeds at satisfying confused or frustrated customers, you save on expenses and boost brand sentiment at the same time.
The Hunt for Optimized Measurement
When determining which social media metrics you track, the guiding principle at play is that it all starts with your business goals. When you know why your brand engages with people on social media, it's easy to find metrics that provide snapshots of these key performance indicators.
Analyze metrics on a regular basis to glean insights, tweak, or radically change processes and content. This way, you'll ensure that your social media marketing is bringing in business and not just draining resources.