In October of 2012, Facebook reached a cool one billion users. Twitter has continued to grow as well, showing an increase in active users by 40% from September 2011 to March 2012. Unless you’re still driving cars with your feet (Flintstones anyone?), it’s likely your business is using at least one of these social media platforms. In fact, your company has probably invested untold amounts of time, internal resources and—most importantly—raw capital into these platforms, all in the blind hope to see some returns on the back end. If your company wants to have some resemblance of a measurable ROI it first needs to ask itself: What campaign metrics should we be tracking?
Again, this should be the first questions you answer before starting a social media initiative. If you aren’t measuring anything, you aren’t going to be able to accurately define what is working and what isn’t working. Most companies will choose to measure listening/engagement metrics like mentions, retweets, likes, etc... Measuring these metrics are important as they allow you to understand at a high level the conversations taking place on your social platforms.
However, these metrics alone are not really telling you the full tale of your companies social media initiatives. Companies should be taking a deeper dive into the analytics and look at metrics that focus on revenue generation and conversion. These metrics aren’t as easily seen as likes and retweets, but they offer deeper insights into your social media initiative's effectiveness. Examples of these deeper metrics include:
Average Revenue Per Visit/User: Just what it sounds like. This number will tell you the average revenue you can expect from an individual visiting your website. It’s calculated by dividing the number of site users or visits by the total revenue generated from the website. You can take this a step further and specifically focus on the traffic that is generated from a social source, thus giving you an idea how much a social sourced visit is worth in terms of pure revenue. For example if I know that my average visitor is worth $.10, but a visitor that comes through Facebook is worth $.15, I know my bottom line might be better served if I focus more on getting my Facebook audience to visit my website.
Lifetime Value of a Customer: This metric shows you how much revenue a customer is worth over their entire purchasing lifetime. This metric is paramount for determining how much your company is able to spend to “buy” that customer.
Social Conversion Rate: This metric tells you the percentage of people who take a desired action (making a purchase/subscribing to an email list) that came from a social platform. The higher your conversion rate the more efficient you can be with your traffic driving.
Conversion Path: Your companies conversion path identifies the various interactions your customer had with your brand between when they were introduced to your brand and when they purchased from your brand. This path is extremely important when assigning true ROI to each of your various marketing initiatives and can be analyzed part and parcel to determine maximize your entire marketing initiative.
If you’re not measuring your social media campaign, what’s it there for? Good looks? Ensure your companies social media initiatives are generating a true ROI by identifying, tracking and measuring the metrics that are important to your company.
What metrics does your company care about? Share your thoughts in our comments below.