A formula for tracking social marketing success
Written by Binh An Nguyen
We all know about using social media for increased engagement, brand awareness, and customer service. But is it possible to put a dollar amount on the benefits of using social media? Can social ROI actually be calculated?
This is a question that has been hotly debated over the last number of years. While the ROI of some forms of digital marketing – like pay per click or banner ads – are more easily measured, social media tends to be less transactional in nature. What I mean is this: In many cases, it is difficult (if not impossible) to track the relationship between an individual social media effort and a corresponding conversion or sale.
Rethinking the ‘return’ in ROI
For this reason, many businesses are realising they need to rethink how they define the ‘return’ in ROI. While traditionally ‘return’ has stood for sales or conversions, this definition doesn’t take into account the many ‘soft’ returns that may come out of social media.
Some of these returns may be:
- Increased engagement
- Brand awareness
- Improved customer service
- Customer loyalty
- Being first-in-mind
As you can see, each of these ‘returns’ is extremely difficult to calculate, particularly if you’re thinking in terms of dollar amounts. In fact, according to Hubspot’s 2013 State of Inbound Marketing Report, 34 percent of businesses cannot or do not calculate overall inbound ROI (which would include social media efforts, as well as other types of inbound efforts). In addition, one quarter of those surveyed reported that theirbiggest challenge was measuring ROI for inbound marketing efforts.
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Metrics that can be tracked: Social referral traffic and leads
Despite the obvious difficulties of nailing now the ROI for your social media efforts, there are some metrics that are relatively easier to monitor. Measurements like social referral traffic and leads are far easier to track, although even these can be somewhat cagey; even when an individual social media post does lead to a sale or conversion, there are a number of factors that may convolute the measurement process. Factors like time between the post and the conversion, indirect routes to the conversion event, and conversions due to word of mouth just to name a few.
That said, for businesses looking for a simple way to measure and replicate the success of their social media efforts, one way would be to focus on social lead generation, nurturing, and ultimately conversions.
Although this is certainly not an exact science, following the three steps below can give you a framework for determining which social media efforts will be most likely to ultimately lead to sales or conversions.
Step ONE: Track social referral traffic
Because we know that social media is far more about engagement than about sales, enticing people to visit your website is a critical first step in eventually seeing financial results. If we think of our online marketing efforts in terms of a funnel – awareness, consideration, conversion and loyalty – your social media efforts will fall into the ‘awareness’ stage.
If you’re consistently providing valuable content via social media and people like what you have to say, they’re more likely to visit your website. This may be through direct links, or a more roundabout process. In any case, getting visitors to your site through social media should be your first step.
Step TWO: Track conversions
This is obviously highly simplified, and measuring conversions from social media referrals won’t always be possible. However, in many cases, it will be possible to track which links, offers or promotions have led to a particular conversion event.
These conversions may be sales, but may also be non-monetary actions like submitting a quote request form or calling your business to request information. In any case, following your website visitors from social media to conversion will give you a good idea of what actions have led them to this point.
Step THREE: Use what you’ve learned, and repeat the process
Once you have an understanding of how and why your social referral visitors have converted, you can use this information to repeat the process for increased conversions. Some questions you may want to ask yourself are:
- What types of posts ended up resulting in conversions?
- What paths did visitors take on my website that led them to convert?
- What types of content may be resulted in high traffic levels, but ultimately led to few or no conversions?
- How can I replicate these experiences to meet the needs of my target market, while also resulting in conversions?
Although this is obviously an oversimplified process, following your customers from social media, to website, to conversion can be extremely helpful for understanding the mindset of your target market. What types of content ultimately lead to conversions? What calls to action am I using that seem to hit a nerve? What social media efforts seem to be most effective and most lucrative?
The point is this: Although it’s not always possible to measure the ROI of your social media efforts, tracking leads is one way to better understand which strategies are working, and which aren’t. Understanding this one piece of the social media puzzle can give you insight into how your customers think, and what they value. This knowledge can also help you improve the ‘soft’ results of social media like engagement levels, brand awareness and customer loyalty.
And that’s a winning combination.
About the author
Binh An Nguyen is the founder and CEO of Market Ease Business Promotions, a digital marketing agency dedicated to helping companies in Australia grow by leveraging the power of the internet. In the past 6+ years, Binh has helped several multi-million dollar companies in Australia establish themselves as the market leaders in their fields, and sell millions of dollars worth of products and services online. You can find out more about Binh and his company at http://www.marketease.com.au
Q&A: Professor Loredana Padurean, Asia School of Business
As someone who is creating Asia Pacific’s business leaders of the future, what do you believe are the essential skills leaders require?
In many ways, we need leaders who are Renaissance women/men or polymaths, as opposed to specialists of an industry or a field. A polymath is a person with profound knowledge, proficiency and expertise in multiple fields and today’s leaders have to be able to combine various ideas, look at problems in novel and useful ways, and develop a broad and yet still deep set of skills, talents, and knowledge.
You’ve coined ‘smart’ and ‘sharp’ as skills of the future. What are these?
They are replacements for ‘soft’ and ‘hard’ skills, a concept coined by a US Army doctor in 1972 who observed that his pupils had different skills: dealing with machinery required ‘hard’ skills, while dealing with people and paper were ‘soft’ skills. This concept has served us well since, but I find it too binary, not to mention the semantic implications of the words themselves.
Soft implies gentle, delicate, mild, quiet, tender, weak. However, there is nothing soft in navigating competing perspectives and cultures, handling and delivering critical feedback or dealing with office politics. Instead, I prefer to call these skills ‘smart’. Hard implies rigid, difficult, heavy, static. But how can we think of engineering or software development as static or rigid? I believe ‘sharp’ is more apt as such skills need constant updating or sharpening.
I think it’s time to reflect on these classifications, because we can drastically change someone’s perspective by how we choose to talk about and frame something.
How important are smart skills in leadership today?
Smart skills are more important than ever because we live in a world of extreme diversity: generational, ethical, value-based, gender, etc. Gone are the days when giving an order was an effective act of leadership. I personally work with people from five different continents and across five different generations, therefore as leaders, we need to know how to adapt, motivate, inspire and connect. We need to increase our investment in learning about them in action, especially as smart skills are more difficult to develop.
I believe that a successful leader today has to be both smart and sharp. Take cognitive readiness, one of my top 10 smart skills. In order to be cognitive ready, one has to master system dynamics, one of my top 10 sharp skills. Also, did you know that one of the primary reasons why digital transformation fails is not the absence of digital literacy, a sharp skill, but the need for more validation and adaptability, both smart skills. So, instead of thinking of these skills as binary, I prefer to think of them as the yin and yang; co-existing and complementing each other.
So, you can teach leaders smart skills then?
Yes, you can, via a combination of the classroom experience, plus an action component supported by deeply embedded reflection. At ASB we call this Action Learning, and we teach it both in the MBA and in the executive programs. For example, in teaching a leader emotional maturity as a smart skill, first they need to learn what it is, and then act on it, before reflecting on what we did and how we did it. And then to repeat it, but this time with more expertise and awareness. It’s not easy, but that’s why my favourite mantra is ‘the job is easy, the people are not’.
Discover Professor Padurean's successful skills for a digital transformation here