As an active user and proponent of social media marketing, I’m constantly being challenged by my mHealth clients to justify the time and effort being expended on social media programs. The question I typically hear is “What’s my ROI?” It’s a question that entrepreneurial companies are asking their marketing departments. In lieu of a good answer, many marketers get weak in the knees, cave into the pressure of having to demonstrate value and end up putting social media into the marketing backlog. mHealth companies are especially susceptible to this pressure due to their start-up nature and lean attitude.
This doesn’t have to be you. I’ve put together some great tips on how to measure social media ROI condensed from a report compiled by smartbrief.com. View the full report by clicking on the link here.
mHealth Marketers: How to Measure Your Social Marketing ROI
Step 1: Define your terms
Return on investment (ROI) is the measure of an activity’s results relative to its cost. The equation for determining ROI, in its most simplistic form, looks like this:
(Results – costs) ÷ costs = ROI
Companies often trumpet social media success by announcing results, but outcomes are only half the story. Seeing results from your social media efforts is great, but if you’re spending $200,000 a year to generate $100,000 in sales via Twitter, you’re not seeing positive ROI.
Step 2: Establish goals and benchmarks
Businesses engage to make a sale, provide customer service, alter the way a brand is perceived, hire new workers or achieve some other business goal. Your social media presence will never demonstrate positive ROI until you identify your goals. Those goals will determine the shape of your social media efforts as well as the metrics by which they can be judged.
Once you’ve decided what you’d like a given social media presence to accomplish, the next step is establishing benchmarks. It’s reasonable to say businesses should influence purchasers or that they should work to create brand advocates who will influence others to buy. But there’s no firm metric for influence — no way to convert it into a dollar figure. Brands are better off measuring the effects of influence through more traditional means such as customer loyalty programs and referrals.
Step 3: Implement and experiment
Once you’ve determined your goals, identified key metrics and established performance baselines for those metrics, you’re almost ready to start tracking your social media ROI.
There are three options:
1. Measure key performance indicators against a baseline at regular intervals.
2. Use coupons, order codes, loyalty programs or some other mechanism to identify and track brand interactions.
3. Track and analyze user sentiment. Some of the most successful brands in social media, such as Dell, use premium social media monitoring software and social media specialists to record and analyze what is being said about them.
Step 4: Evolve
The last element of social ROI has nothing to do with your customers and everything to do with your workers. Rather than be content to improve a business process, these companies want to use social media to improve their entire business. Companies can benchmark and track these changes by rolling out social tools to a single department and then watching how that department evolves, relative to the rest of the business.
You’re most likely measuring your other marketing channels. Measure your social media programs and you’ll be rewarded with customer insight and intelligence to help you grow your mHealth brand.
photo credit: Alan O’Rourke via photopin cc
Shaun says:
A lot of times social ROI will be at the forefront of the conversation before actually determining what the goal of social is for the campaign. In the example above it’s said to be “sales,” but sales is not a very strong goal for social media. I’d invest in SEO/SEM if that were the case.
Social media is all about community building and empowerment. Sometimes this translates into dollars spent, sometimes it doesn’t. Other times it leads towards networking opportunities and potential earnings – sometimes it’s just spam. It’s rough waters and 9/10 times you’ll need a Captain to navigate it. If goals aren’t clearly determined and you’re not optimizing for the goal you’re fighting a battle you’re going to lose.
Sam Stern says:
Shaun – Thanks for adding to the conversation. I think we both agree that clearly defined goals tied to KPI’s will keep Social Media efforts measurable and on track..