In his new book ‘Social
Media Metrics’, Jim Sterne says: “The Internet has always been a
social medium”. And he’s right where he writes that the Internet is the
first many-to-many communication channel.
Purists will say that the Internet is not a actual communication channel
and they’re also correct. The Internet is nothing more than a gigantic
collection of interconnected servers and a mass of protocols and
technologies to transport data. Others will say that a medium on its own
cannot be social and they are right as well. People are social, not
media.
But for now, I’ll keep those discussions for what they are. Because Jim
is of course talking about the different applications based on the
Internet, like the World Wide Web, email, and now also social media.
Social media are being called that way because they’re the first of
their kind to allow every individual Internet user to participate in all
the communications, interactions, and conversations taking place
online, and to connect with people from all over the world.
“Social media metrics” is not a philosophical book. It’s a book which
takes off from a definition of social media, with that definition being
“that which allows everybody to communicate with everybody, and allows
everybody to spread his own “consumer-generated” content wherever and
however he wants”.
Social media exist and social media marketing works. Period.
Jim doesn’t so much look at the phenomena on its own. He determines it,
sums up the advantages, and doesn’t doubt the usefulness of social media
for business goals. In his own typical style, he wonders if that
out-of-control option people have to upload photos of their lunch is
useful for business?
The answer is: “oh yes”. Of course, he then doesn’t proceed to look at
the value of an uploaded photo of a burger with French fries. It is
simply Jim’s way of focusing on things. As the question that interests
him is “how useful” social media are, and of course how to measure that
“usefulness”.
This is not a trivial question because the discussion on how to
“measure” social media has been going on for years now. With “Social
Media Metrics”, Jim gives a plain and clear answer. And it was about
time someone did. Who could do the job better than Jim?
Everyone has his own way to classify social media into different
categories. Jim has six of them (“and around the time that my book hits
the stores, there would probably be two more”, he jokingly adds, but
it’s true: social media is evolving at a lightning fast pace).
The six categories are:
* Forums and message boards
* Review and opinion sites
* Social Networks (the Facebook pages, LinkedIn and Ning’s of this
world)
* Blogging
* Micro-blogging (should I say “tweet”?)
* Bookmarking (Digg, StumbleUpon, Delicious, you know the 278 or so
others)
* Media sharing (Flickr or YouTube, anyone?).
A categorization that I can relate with!
For Jim, social media are an essential part of today’s marketing mix.
Period. The reason being something which I often write about: “whatever
people say about you online is more important than your advertizing
campaigns”.
Whoever expects Jim to further explain why this is the case is best off
not to read the book. Or as Jim puts it himself: put the book down, read
hundreds of books, thousands of blog posts (or talk to someone who
knows what he’s talking about), and then read this book once you are
convinced.
So what does the book exactly cover then, and who is it intended for?
The title says it all: it’s about metrics, KPI’s, and techniques to
measure the impact of social media, about translating your goals into
data, and about practicing social media marketing efficiently.
In other words: the book is intended to optimize the value of your
social media marketing for your company, your brand, your bottom-line,
and of course for the people with whom you converse, interact, and to
whom you “sell”.
Defining your business objectives
Social media marketing is marketing. You need a strategy and one of the
first steps is defining your business objectives.
We do not use marketing without reason or manage a company only for the
sheer pleasure of it And we do not measure just for the sake of
measuring.
Exactly the same applies to social media marketing. It serves business
goals. Social media listing, for instance, has a purpose: identifying
what people say in online conversations about our company, brands,
competitors, their needs, trends, etc. The final goal is to use the data
we thus acquire in order to improve our marketing efforts and
pro-actively respond and engage.
Marketers are increasingly accountable for what they do, they have to
create value and need to have a dashboard to improve, guide and amend
the efficiency of their social media marketing activities. Of course the
same applies for other managers in a company.
A pilot needs to use a dashboard if he wants to reach his destination
safely. The same applies for a company. But before you use the tools, of
course you need to know where you want to fly to. So you need to have
objectives.
Those who are familiar with web analytics know all this but there is a
more important reason for this reminder. Companies today simply cannot
survive without metrics, objectives, analytics data and actionable
information.
If you cannot provide value using your social media presence, you’re off
for a bad flight. If you do not have clear goals, you can not define a
strategy and a planning.
In these times where people are more online, hundreds of digital tools
are being used to communicate, the customer moves online, there is a
shift from “selling” to “buying” and people decide how, where and when
they will contact you, you have no option than to listen, measure and
act upon information.
Someone that does not measure social media and online interactions is a
pilot who flies in a heavy storm and thick fog without a radio, compass
and parachute.
But there is more. Web analytics is not just a matter of data, metrics
and measuring. Analytics primarily is a matter of people, processes and,
as the term says, analyzing and taking action according to that
analysis.
It is not about the data but about the information you can DO something
with. It is not simple metrics but about key performance indicators to
reach your destination.
100
metrics and 3 business goals
Even if actual “sells” are rarely being made on social media, as a
company and a brand, you sell and buy things on them that yield a lot
more financial value in the long haul: “human” value, trust, reputation,
influence, service, the people behind your brand, loyal customers, etc.
For what it’s worth: those are not Jim’s words, but my own.
So how does one exactly measure social media? Jim already provides a
hundred metrics in the preface of his book alone. And those aren’t even
his own. He mentions the 100
metrics which David Berkowitz posted with some others on the
Marketers Studio blog at the time.
Is it a book that gives away everything in a preface? No, because as Jim
and Berkowitz say: which metrics you need first of all depend on the
goals you want to realize with the use of social media.
Remember that social media marketing is marketing as well. So,
determining goals and a strategy is just as essential here as it is with
other forms of marketing, as I wrote before.
Where is the emphasis when determining the Key Performance Indicators?
Jim distinguishes three main business goals:
• Raise revenue
• Lower costs
• Increase customer satisfaction
Let me have a look at these three business goals and tackle them from my
social media marketing point of view, spiced up with elements from
Jim’s book. In the illustration below, which is a reproduction of the
one in Jim's book with some extra thoughts, you will see that all three
business goals partially overlap.
1. Raise revenue
Revenue is a matter of cash. Period. Just like ROI: what’s the financial
return for every dollar you invest? Revenue is of course a broad
concept. There are hundreds, perhaps even thousands, of factors
contributing to the revenue. The challenge is to identify those factors,
and then improve them. Revenue is what you need in order to keep your
internal customers/suppliers, also known as employees, and your external
customers/suppliers, like shareholders, satisfied, to innovate, to
invest, to be able to serve your customers better, to be able to create
more value, etc.
Revenue is a general goal, which you have to keep in mind when marking
out key performance indicators. However, this doesn’t mean that you
should only determine KPI’s that will lead to an immediate return. If an
influential blogger tweets about a positive experience with your
company or brand, it might have an indirect influence on your revenue.
When you invest in expanding a trustworthy, participative, human, and
“open” brand in social media, it’ll lead to a rise in the revenue in
more than one way. On one hand, there’s the brand’s power itself. Also,
there are people who buy brands and are therefore willing to pay more in
comparison to a “cheaper” brand. Bigger margins contribute to the
amount of profit.
A trustworthy, participative brand which provides value by offering
relevant content, by conversing, by serving its customers through social
media, and by proactively practicing customer service, deserves trust. A
brand perceived as trustworthy and valuable becomes a welcomed partner
in social media, which in turn leads to more turnover.
Of course, it’s much easier to calculate what the ROI and the impact of a
PPC campaign is in a social network or on a social bookmarking site,
but don’t solely focus, especially not in social media and inbound
marketing, on immediate results. That’s also not what Jim means, by the
way, but I just wanted to emphasize it.
2. Lower
costs
ROI in its simplest form is partially determined by the costs. In order
to maximize profits, you don’t merely look at the turnover but you also
try to lower the costs.
Social media can play a crucial role in this as well. In his book, Jim
shares the two obvious examples of customer service and market research.
Yet Jim means that when determining the KPI’s, you should keep the
lowering of costs in mind here as well.
Again, this shouldn’t lead to immediate cost savings in the short run.
As Jim correctly points out - “You must spend money to make money”. He
adds that it’s more than sufficient when you can demonstrate that social
media are a less expensive way to get to know the public (or your
client’s) opinion, to make “friends” (does your company have them yet?),
and to influence people.
I would like to add that it takes time (and therefore money),
persistence, people, and investments to make use of social media in
order to lower the costs. Social media marketing does not come for free,
just as it is not a solution to every challenge. But that it can work
cost-effectively is a fact.
Just how do you generate leads nowadays? Google Adwords? Events? What is
the cost-per-lead? Imagine investing that same budget – or less – in
creating a valuable blog full of tips and tricks, a solid, informative
newsletter with sharing tools, some ‘social media presences’, and white
papers to which you send traffic through social media and guest blogs:
what will be the cost-per-lead then?
In my experience, it’ll be lower. Why? Because the lead is more
qualified, and especially because you offer something valuable, which on
top of that can be spread through social media and improve your brand
reputation.
Here is another example. Imagine investing a certain amount of money in
television ads today. You learn that online video works well and decide
to spend part of your television budget on online videos. Lots of
companies immediately recognize the cost savings and start making cheap
videos. But what if you spend the same budgets that you spend on making a
television ad on a quality, engaging, and in social media widely
discussed video on a content sharing website like YouTube (and naturally
also on your blog, etc.)?
Lowering the costs asks for investments, introducing new metrics, and
determining the right KPI’s in the short run, but also in the long run.
3.
Increase customer satisfaction
A satisfied customer will lead to new customers. Companies have known
this for centuries. Focusing on existing customers is also cheaper than
getting new customers.
Satisfied customers buy more and become a part of your marketing and
sales team. Because of the scale of social media and the power of
word-of-mouth in this era of social media, customer service and raising
the customer satisfaction is now one of the most important business
goals.
Someone, who wants to practice social media marketing professionally,
must focus his KPI’s and metrics largely on elements like engagement,
interaction, influence, customer satisfaction, etc.
With social media, you now have more possibilities than ever to step
into a direct dialogue and offer value, so that your customers become
more loyal, and also that you can expand the influence of your company.
The viral component of social media stories and the pace with which
customer experiences are being spread may be the most important reason
to practice social media marketing. Listening, anticipating, and
reacting on social media is not solely a matter of your brand
reputation, crisis management, and raising the customer satisfaction:
it’s making sure that the satisfied customers, “followers”, “fans”, etc.
will proclaim their satisfaction as well, bringing new customers along
with them. If you succeed in this, you just might realize what the best
way to lowering costs is.
Therefore, Jim’s three business goals should constantly be kept in mind
while defining metrics and KPI’s for social media.
How do I increase my turnover, lower my costs, or make my customers more
satisfied with a certain activity?
Social
media are about relationships, the metrics as well
If you know what you want to achieve, how you want to achieve it, which
data you’ll need for it, and how you can transform that data into
real-time information, you’re ready to start, always keeping the three
goals in mind.
But, in conclusion, let me get back for a minute to what Jim writes on
what we need in order to choose the metrics for every step of our social
media metrics story.
With this, he looks at the “flow” of the relation between a company and a
customer/prospect.
And since social media marketing is purely about relations between
people (businesses are people) and people (customers are people, we
often forget it), this is an ideal framework to address the right
metrics in every step, step by step.
1. Draw the
attention: you can’t sell to someone who doesn’t know you exist.
2. Make sure they
like you: Jim devotes an entire chapter to recognizing
“sentiments”.
3. Make sure that
people interact, and undertake action.
4. Convince them to
buy (we less and less sell ourselves).
Are you ready to seriously practice social media marketing and don’t
have to be convinced of the value of it anymore?
Then Social
Media Metrics is a must-have.
While waiting for it, go and check the 100
metrics David Berkowitz posted and start thinking about them.
Check which ones fit in your business goals and in Jim’s framework I
just described.
Check out the video below in which Bryan
Eisenberg interviews Jim and Avinash Kaushnik, that other web analytics
Jedi master about social media metrics.
Media Metrics’, Jim Sterne says: “The Internet has always been a
social medium”. And he’s right where he writes that the Internet is the
first many-to-many communication channel.
Purists will say that the Internet is not a actual communication channel
and they’re also correct. The Internet is nothing more than a gigantic
collection of interconnected servers and a mass of protocols and
technologies to transport data. Others will say that a medium on its own
cannot be social and they are right as well. People are social, not
media.
But for now, I’ll keep those discussions for what they are. Because Jim
is of course talking about the different applications based on the
Internet, like the World Wide Web, email, and now also social media.
Social media are being called that way because they’re the first of
their kind to allow every individual Internet user to participate in all
the communications, interactions, and conversations taking place
online, and to connect with people from all over the world.
“Social media metrics” is not a philosophical book. It’s a book which
takes off from a definition of social media, with that definition being
“that which allows everybody to communicate with everybody, and allows
everybody to spread his own “consumer-generated” content wherever and
however he wants”.
Social media exist and social media marketing works. Period.
Jim doesn’t so much look at the phenomena on its own. He determines it,
sums up the advantages, and doesn’t doubt the usefulness of social media
for business goals. In his own typical style, he wonders if that
out-of-control option people have to upload photos of their lunch is
useful for business?
The answer is: “oh yes”. Of course, he then doesn’t proceed to look at
the value of an uploaded photo of a burger with French fries. It is
simply Jim’s way of focusing on things. As the question that interests
him is “how useful” social media are, and of course how to measure that
“usefulness”.
This is not a trivial question because the discussion on how to
“measure” social media has been going on for years now. With “Social
Media Metrics”, Jim gives a plain and clear answer. And it was about
time someone did. Who could do the job better than Jim?
Everyone has his own way to classify social media into different
categories. Jim has six of them (“and around the time that my book hits
the stores, there would probably be two more”, he jokingly adds, but
it’s true: social media is evolving at a lightning fast pace).
The six categories are:
* Forums and message boards
* Review and opinion sites
* Social Networks (the Facebook pages, LinkedIn and Ning’s of this
world)
* Blogging
* Micro-blogging (should I say “tweet”?)
* Bookmarking (Digg, StumbleUpon, Delicious, you know the 278 or so
others)
* Media sharing (Flickr or YouTube, anyone?).
A categorization that I can relate with!
For Jim, social media are an essential part of today’s marketing mix.
Period. The reason being something which I often write about: “whatever
people say about you online is more important than your advertizing
campaigns”.
Whoever expects Jim to further explain why this is the case is best off
not to read the book. Or as Jim puts it himself: put the book down, read
hundreds of books, thousands of blog posts (or talk to someone who
knows what he’s talking about), and then read this book once you are
convinced.
So what does the book exactly cover then, and who is it intended for?
The title says it all: it’s about metrics, KPI’s, and techniques to
measure the impact of social media, about translating your goals into
data, and about practicing social media marketing efficiently.
In other words: the book is intended to optimize the value of your
social media marketing for your company, your brand, your bottom-line,
and of course for the people with whom you converse, interact, and to
whom you “sell”.
Defining your business objectives
Social media marketing is marketing. You need a strategy and one of the
first steps is defining your business objectives.
We do not use marketing without reason or manage a company only for the
sheer pleasure of it And we do not measure just for the sake of
measuring.
Exactly the same applies to social media marketing. It serves business
goals. Social media listing, for instance, has a purpose: identifying
what people say in online conversations about our company, brands,
competitors, their needs, trends, etc. The final goal is to use the data
we thus acquire in order to improve our marketing efforts and
pro-actively respond and engage.
Marketers are increasingly accountable for what they do, they have to
create value and need to have a dashboard to improve, guide and amend
the efficiency of their social media marketing activities. Of course the
same applies for other managers in a company.
A pilot needs to use a dashboard if he wants to reach his destination
safely. The same applies for a company. But before you use the tools, of
course you need to know where you want to fly to. So you need to have
objectives.
Those who are familiar with web analytics know all this but there is a
more important reason for this reminder. Companies today simply cannot
survive without metrics, objectives, analytics data and actionable
information.
If you cannot provide value using your social media presence, you’re off
for a bad flight. If you do not have clear goals, you can not define a
strategy and a planning.
In these times where people are more online, hundreds of digital tools
are being used to communicate, the customer moves online, there is a
shift from “selling” to “buying” and people decide how, where and when
they will contact you, you have no option than to listen, measure and
act upon information.
Someone that does not measure social media and online interactions is a
pilot who flies in a heavy storm and thick fog without a radio, compass
and parachute.
But there is more. Web analytics is not just a matter of data, metrics
and measuring. Analytics primarily is a matter of people, processes and,
as the term says, analyzing and taking action according to that
analysis.
It is not about the data but about the information you can DO something
with. It is not simple metrics but about key performance indicators to
reach your destination.
100
metrics and 3 business goals
Even if actual “sells” are rarely being made on social media, as a
company and a brand, you sell and buy things on them that yield a lot
more financial value in the long haul: “human” value, trust, reputation,
influence, service, the people behind your brand, loyal customers, etc.
For what it’s worth: those are not Jim’s words, but my own.
So how does one exactly measure social media? Jim already provides a
hundred metrics in the preface of his book alone. And those aren’t even
his own. He mentions the 100
metrics which David Berkowitz posted with some others on the
Marketers Studio blog at the time.
Is it a book that gives away everything in a preface? No, because as Jim
and Berkowitz say: which metrics you need first of all depend on the
goals you want to realize with the use of social media.
Remember that social media marketing is marketing as well. So,
determining goals and a strategy is just as essential here as it is with
other forms of marketing, as I wrote before.
Where is the emphasis when determining the Key Performance Indicators?
Jim distinguishes three main business goals:
• Raise revenue
• Lower costs
• Increase customer satisfaction
Let me have a look at these three business goals and tackle them from my
social media marketing point of view, spiced up with elements from
Jim’s book. In the illustration below, which is a reproduction of the
one in Jim's book with some extra thoughts, you will see that all three
business goals partially overlap.
1. Raise revenue
Revenue is a matter of cash. Period. Just like ROI: what’s the financial
return for every dollar you invest? Revenue is of course a broad
concept. There are hundreds, perhaps even thousands, of factors
contributing to the revenue. The challenge is to identify those factors,
and then improve them. Revenue is what you need in order to keep your
internal customers/suppliers, also known as employees, and your external
customers/suppliers, like shareholders, satisfied, to innovate, to
invest, to be able to serve your customers better, to be able to create
more value, etc.
Revenue is a general goal, which you have to keep in mind when marking
out key performance indicators. However, this doesn’t mean that you
should only determine KPI’s that will lead to an immediate return. If an
influential blogger tweets about a positive experience with your
company or brand, it might have an indirect influence on your revenue.
When you invest in expanding a trustworthy, participative, human, and
“open” brand in social media, it’ll lead to a rise in the revenue in
more than one way. On one hand, there’s the brand’s power itself. Also,
there are people who buy brands and are therefore willing to pay more in
comparison to a “cheaper” brand. Bigger margins contribute to the
amount of profit.
A trustworthy, participative brand which provides value by offering
relevant content, by conversing, by serving its customers through social
media, and by proactively practicing customer service, deserves trust. A
brand perceived as trustworthy and valuable becomes a welcomed partner
in social media, which in turn leads to more turnover.
Of course, it’s much easier to calculate what the ROI and the impact of a
PPC campaign is in a social network or on a social bookmarking site,
but don’t solely focus, especially not in social media and inbound
marketing, on immediate results. That’s also not what Jim means, by the
way, but I just wanted to emphasize it.
2. Lower
costs
ROI in its simplest form is partially determined by the costs. In order
to maximize profits, you don’t merely look at the turnover but you also
try to lower the costs.
Social media can play a crucial role in this as well. In his book, Jim
shares the two obvious examples of customer service and market research.
Yet Jim means that when determining the KPI’s, you should keep the
lowering of costs in mind here as well.
Again, this shouldn’t lead to immediate cost savings in the short run.
As Jim correctly points out - “You must spend money to make money”. He
adds that it’s more than sufficient when you can demonstrate that social
media are a less expensive way to get to know the public (or your
client’s) opinion, to make “friends” (does your company have them yet?),
and to influence people.
I would like to add that it takes time (and therefore money),
persistence, people, and investments to make use of social media in
order to lower the costs. Social media marketing does not come for free,
just as it is not a solution to every challenge. But that it can work
cost-effectively is a fact.
Just how do you generate leads nowadays? Google Adwords? Events? What is
the cost-per-lead? Imagine investing that same budget – or less – in
creating a valuable blog full of tips and tricks, a solid, informative
newsletter with sharing tools, some ‘social media presences’, and white
papers to which you send traffic through social media and guest blogs:
what will be the cost-per-lead then?
In my experience, it’ll be lower. Why? Because the lead is more
qualified, and especially because you offer something valuable, which on
top of that can be spread through social media and improve your brand
reputation.
Here is another example. Imagine investing a certain amount of money in
television ads today. You learn that online video works well and decide
to spend part of your television budget on online videos. Lots of
companies immediately recognize the cost savings and start making cheap
videos. But what if you spend the same budgets that you spend on making a
television ad on a quality, engaging, and in social media widely
discussed video on a content sharing website like YouTube (and naturally
also on your blog, etc.)?
Lowering the costs asks for investments, introducing new metrics, and
determining the right KPI’s in the short run, but also in the long run.
3.
Increase customer satisfaction
A satisfied customer will lead to new customers. Companies have known
this for centuries. Focusing on existing customers is also cheaper than
getting new customers.
Satisfied customers buy more and become a part of your marketing and
sales team. Because of the scale of social media and the power of
word-of-mouth in this era of social media, customer service and raising
the customer satisfaction is now one of the most important business
goals.
Someone, who wants to practice social media marketing professionally,
must focus his KPI’s and metrics largely on elements like engagement,
interaction, influence, customer satisfaction, etc.
With social media, you now have more possibilities than ever to step
into a direct dialogue and offer value, so that your customers become
more loyal, and also that you can expand the influence of your company.
The viral component of social media stories and the pace with which
customer experiences are being spread may be the most important reason
to practice social media marketing. Listening, anticipating, and
reacting on social media is not solely a matter of your brand
reputation, crisis management, and raising the customer satisfaction:
it’s making sure that the satisfied customers, “followers”, “fans”, etc.
will proclaim their satisfaction as well, bringing new customers along
with them. If you succeed in this, you just might realize what the best
way to lowering costs is.
Therefore, Jim’s three business goals should constantly be kept in mind
while defining metrics and KPI’s for social media.
How do I increase my turnover, lower my costs, or make my customers more
satisfied with a certain activity?
Social
media are about relationships, the metrics as well
If you know what you want to achieve, how you want to achieve it, which
data you’ll need for it, and how you can transform that data into
real-time information, you’re ready to start, always keeping the three
goals in mind.
But, in conclusion, let me get back for a minute to what Jim writes on
what we need in order to choose the metrics for every step of our social
media metrics story.
With this, he looks at the “flow” of the relation between a company and a
customer/prospect.
And since social media marketing is purely about relations between
people (businesses are people) and people (customers are people, we
often forget it), this is an ideal framework to address the right
metrics in every step, step by step.
1. Draw the
attention: you can’t sell to someone who doesn’t know you exist.
2. Make sure they
like you: Jim devotes an entire chapter to recognizing
“sentiments”.
3. Make sure that
people interact, and undertake action.
4. Convince them to
buy (we less and less sell ourselves).
Are you ready to seriously practice social media marketing and don’t
have to be convinced of the value of it anymore?
Then Social
Media Metrics is a must-have.
While waiting for it, go and check the 100
metrics David Berkowitz posted and start thinking about them.
Check which ones fit in your business goals and in Jim’s framework I
just described.
Check out the video below in which Bryan
Eisenberg interviews Jim and Avinash Kaushnik, that other web analytics
Jedi master about social media metrics.
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