Practical Social Media Measurement: Cost Savings

Sometimes, the value in a business endeavor isn’t about what goes up – like revenue – but what goes DOWN, like costs. Social media can have some very clear efficiencies, most heavily on the customer service side, but also in areas like training or communications. Let’s have a look.

Cost Per Issue Resolution

In customer service arenas, most companies have a pretty distinct idea of what it costs them to attend to and resolve issues through typical channels, like a call center. To determine what it costs in both hard and soft measures to resolve a single customer service issue (in a simple fashion), you need to:

• Determine the hard cost of hardware, telco service, and software you use
• Include the overall cost of human resources, including salary and benefits, that are dedicated to issue resolution
• Allocate a proper proportion of total business overhead to that department
• Total the investment, and divide that by the average number of issues that are handled on a daily basis.

If you’re tracking this through channels like phone or email and web support, you can also track it through social media. You’ll need to have a mechanism in hand to track the issues that you address and resolve either exclusively through social channels (a stronger direct parallel to a customer service call or email), or ones that originate there and move to other channels.

If you have the resources and an established social media presence, you can start by doing A/B testing by allocating some resources to *only* handle issues through social media channels, while others continue to man traditional channels. Keep in mind that if you do that, your volume for social media issues may be lower simply because of the newness of the medium, so you’ll want to look at the costs proportional to the time spent doing issue resolution overall.

Another thought: peer-resolved issues. If you’re keeping track of the issues that are resolved via channels like peer support forums, you can easily attach an approximate dollar value to those, assuming that at least a proportion of them would have come through mainstream support channels otherwise (recognizing that some people would never try and navigate traditional channels if the forum or online support weren’t available to them).

Issue Resolution Time

Another key area to monitor is the *speed* of issue resolution, or how much time it takes from the moment an issue is captured in your workflow to the time it’s closed and archived in your CRM or other system. Time is money, after all. Most CRM or robust contact management and customer service systems can generate reports on this for you if you’re disciplined enough to route your issues through the system.

You’ll need to have *some* kind of tracking mechanism in place, at least at a high level, in order to evaluate this properly. Track your offline issue resolution time as you normally would. To add social media efforts to the mix:

• Tag or otherwise capture issues that *originate* in social media channels, like a complaint or question arising on Twitter first, or via a blog comment.
• Also tag or classify issues that *resolve* in social media channels, and how long they take from the initial post to delivery of an answer or resolution.
• Track the hybrid ones too, like those that start on the forum, but require carryover resolution through phone or email.
• Compare these three categories: traditional channel resolution time (email or phone support), resolution time for issues that start in SM but resolve via phone/email, and those that are handled via SM exclusively.

If you’re evaluating your cost per issue, or if you have an idea of your overall department spend, you can do some breakdowns about your cost per minute or hour of issue resolution. Look at your total issue handling time in a given day as a proportion of overall business. Say that, on average, 75% of your business hours are spent with active issue handling. Take 75% of the total cost of your department spend, and then break that into a cost per hour/minute mark.

Once you have that estimate (and it IS an estimate) in hand, you can apply it to the three categories you’ve broken out and look at the efficiency of issue resolution in each of those scenarios. It’s a rough figure and you can certainly calculate it with more detail, but keeping this general approach in mind can help you at least get started.

CPM/Cost Per Dollar Raised

I don’t love the CPM (cost per thousand) metric, but it’s a mainstay of advertising. The idea is breaking out the total cost of an advertising campaign against the total potential reach, and calculating how much it cost you to reach every thousand people. If you’re like me you can see a bunch of glaring holes in that (like we talked about on Monday re: potential vs. actual reach, and the fact that this gives you NO indicator of actions taken based on that reach). But it’s a language that many executives still speak, so it can be one weapon in your arsenal if you’re trying to prove the value or efficiency of outreach in a social media aspect.

In my non-profit days, we also used to look at the cost per dollar raised, or the total of our investment in something like a direct mail campaign against the total funds we raised through that effort. You can do a similar thing through social media, or track something like a cost per acquisition/lead, if you have some tracking mechanisms in place. You’ll need to:

• Track the approximate/potential reach of a particular effort you deploy in social media, or the incremental reach of an offline campaign carried over into social media channels. (More on that here in Monday’s post).
• Track the time and effort put into maintaining and managing that online presence from the organization’s perspective, including staff hours. Do the same for the offline components if you can, things like managing a print/design process, or executing a mailing or media campaign. These soft costs matter.
• Account for any hard dollars spent, either for supporting work for the online effort (like development of a specific landing page), or for the offline efforts like print media that also support the online endeavor. You want an idea of how much hard cash you’re in for.

Here you can do two things. One is to look at the total potential reach for ALL elements of the campaign – offline and on – and break down the CPM or the cost per dollar raised in aggregate. Compare that to past efforts you’ve deployed without social media, and look at the difference.

You can also look at the online components exclusively, and compare the CPM/CPDR for the offline versus the online components, and look at which delivers  more proverbial bang for the buck.

Training, Idea Generation, and Employee Education

There’s absolutely no doubt that there are costs associated with training employees, from getting them on board and up to speed to continuing education on professional skills. Ask any HR professional and they’ll tell you that these costs can be significant, most especially on the soft side, or in the time and energy costs for both the trainers and the trainees.

Social media capabilities and tools can really impact this line item in several ways. Consider:

• Building a knowledge base, like a wiki or other collaborative resource center, to avoid having to reinvent and redeploy training materials, and to spread the effort and costs of development across all of the contributors.
• Creating a video library of employee-generated tutorials, tips, and ideas based on common training needs for new employees.
• Building an internal social network or communication platform so that employees can share their best practices and learning on and ongoing basis.
• Looking into attending seminars and events virtually, or curating materials, links and information from backchannel discussions, like on Twitter.
• Hosting organized peer-sharing sessions on Skype to do remote meetings or training sessions
• Deploying an internal UserVoice or other idea capture/voting mechanism to curate ideas for improving business processes, like a virtual suggestion box.

In order to measure and demonstrate the value of these endeavors, of course, you need to be benchmarking the costs of your training and ongoing education, including things like conferences, as they are now. And once you deploy ideas like this, you’ve got to put in place some feedback mechanisms to see how well the alternatives fare.

For example, if you deploy a UserVoice system, track the ideas that you actually elect to implement, and measure their impact on your processes and budgets over the first six months. Compare the cost savings or increased revenue or awareness you generate from those ideas against the costs for deploying and maintaining the UserVoice platform, and approximate the return.

Ask for feedback from your employees, too. If they’re using a wiki to find information they need for their job, ask them to approximate how much time they would have to spend tracking down that information through other means. Conduct informational, quick surveys of your team members to see if they’re taking advantage of these tools, and how they’re impacting their job performance. You might be able to correlate savings or efficiencies in ways you didn’t think of, like the reduced overhead costs for meeting space and travel by conducting training virtually. Or time saved by viewing a 10 minute video tutorial for a process instead of having employees burn an hour in a less efficient live session.

Wrapping Up

You’ve likely notice how much of the above – or any of the things we’ve talked about in the last few days – have to do with tracking. That’s really the essence of measurement: you have to be capturing the data before you can do anything with it.

That’s also why there is never a single, concrete process for how you measure something. There are equations – like ROI or ROE – that are fixed more or less, but how you derive the elements of that measurement (in these cases the I or the E) is dependent on your processes. L

Also, if you want to know ROI of something, you have to be tracking the “I”, or the investment. That means yes, you have to at least approximate both the hard and soft costs relative to the efforts you undertake. Time consuming? Yes. Work? Yes. But you can’t claim to me that you’re serious about measurement AND want a shortcut to it all in the same breath. It doesn’t work that way. Measurement is a discipline, and it’s going to take effort to do right.

That’s all the more reason you need to be tying your measurements back to your goals. Why would you want to throw money and time at measuring something that doesn’t tell you a thing about whether or not you’re making progress toward the objectives you’ve set?

Last in the series on Monday, we’ll talk about evaluating community engagement and what I call active interest, or demonstrated engagement behaviors online.  Would love to hear what you’re measuring, how you’re attributing it to your goals, and what I might have missed in here.

See you soon?

Practical Social Media Measurement: Leads, Conversions, Sales

One of the chief things that managers seem to want is the ability to draw lines and connect dots between their social media participation and sales (or other conversion metrics). There are two ways to do that, and one is much more difficult than the other.

Cause and Correlation

First is attribution or direct cause, which would indicate that the social media initative is the sales channel itself. Much like Dell claiming that it has reaped millions in sales via their Twitter channel, here you’re saying that your endeavors in one channel or another are the primary driver for a particular revenue stream. The tricky bit here is that a) there will *always* be external factors that influence sales transactions and b) you have to track and control how you output information in these specific channels in order to accurately attribute the revenue.

Moreover, Dell was successful here because they’d built up a platform of trust and familiarity over a long time, across several other channels: their blogs, IdeaStorm, their more support-focused Twitter presence(s), and their longstanding e-commerce. They had an entire ecosystem of social media presence working in their favor here, and many businesses don’t yet have the track record, the deployment, or the commitment to replicate that. That’s what makes direct sales through social media such a sticky wicket.

The second and more realistic way to track the impact of social media on revenue is by correlation. In other words, you track your sales in aggregate, or perhaps in the more global online environment (inclusive of your website and how leads funnel into your pipeline through the web overall).

Then, you overlay trends in your online activity – say, the establishment of your community or the building of your blog – and look at them alongside your sales activity. If they go up together, you can indicate a positive correlation, or the likelihood that the social media stuff is helping to drive the sales. If social media activity goes up but the sales stay flat or go down, something isn’t working, or the social media bit isn’t effective from a sales standpoint.

Likewise, correlation can also be in *ratios*, so for example, a $50,000 investment in social media (including time, money, or both) correlates with a $25,000 increase in sales over the same time period. Note that this is NOT precise ROI, because you’re talking an investment in a single channel against TOTAL sales. But you can look at the proportion in sales or lead traffic increase over the time period in which you track your social media activities, and extract a relationship between the two.

So. With all of that nuance out of the way, let’s look at a few of the things you might measure, in detail.

Value Per Fan/Follower

Quick distinction here: if you want to track the value of a fan/follower in monetary terms, you have to be attributing that value to revenue in the same channel. So if you want to establish the dollar value of a Facebook fan, you need to be tracking the revenue generated via leads and traffic originating from your Facebook efforts. (If you’re trying to establish the more intrinsic value of a fan in brand value or other qualitative terms, that’s different and more complex). That means, in a simplistic fashion:

• Build in landing pages for your website that are only accessible via a specific URL not accessible from anywhere else on your site.
• Use that URL to generate unique parameters through your analytics software (Google URL Builder or parameter tools in your paid platform), and use shortened links based on those URLs that are unique to the landing pages you’ve designed for Facebook, Twitter, etc. Keep them separate when sharing them, and track which ones you use when and where. You can use a spreadsheet for that.
• Use your analytics software to track referral traffic that originates on the specific social network you want to track, either by generic url (like Twitter.com) or through the unique links/landing pages you’ve set up, or the aggregate of both.
• Look at the percentage of either conversions to leads from that referral traffic (i.e, they filled out your contact form or emailed you for more information), and then through your sales/CRM database, track which ones become customers.
• OR, if you have ecommerce on your site, track the completed transactions that originate from those referral sites.
• Take the total revenue generated in a 30 day period from these traffic paths, and divide it by the number of fans you have at the end of that same 30 day period to arrive at an *approximate* dollar value per fan or follower. Remember that this number will change as the ratio of revenue to potential reach changes.

Note that this is attempting to say that the value of a fan or follower is *directly* tied to the revenue produced by that social network. It doesn’t take into account factors like business those fans may do with you offline (and therefore influencing the larger sales picture), those that have combined online experiences with you through several channels (because in this case their revenue would be attributed to single behaviors), or things like brand lift, reputation, awareness, or reach (which we covered yesterday).

You may wish to take a more holistic approach to this if you have the means and the (significant) time: cross referencing your fan and follower lists with your sales database, and looking at their sales volume/value over a quarter or a year.

Then, if you compare the annual value of a customer who overlaps with your social media efforts against customers who are NOT part of those followings, you can compare and see if there’s a difference. In this case, you’d be saying that a customer who is ALSO connected with you on social networks is worth X amount more in a given time period to your business.

It’s a bigger picture metric, but in my mind, perhaps more valuable since you’re looking at the social media picture more strategically.

Lead Generation

Here, you need to do a lot of pathing and tracking from the contacts that originate on social networks and make it somehow into your pipeline. Whether you’re using a spreadsheet to keep track of your database or a sophisticated CRM system, you’ll want a way to designate a lead source, and tag it in a way that you can reference later. If you have the time and energy, you can even split that source into specific social channels: blog subscribers, Twitter, LinkedIn contacts, etc. For example:

• For email leads that come in, if the source is obvious (i.e. I found you on Twitter), tag it as such. If not, consider asking in your reply.
• Include a field on your contact/website form that asks people how they found you and include your social presences.
• Tag leads that come in from offline events that tie to your social networking efforts, like Tweetups or conferences
• Path referral traffic to your site from social network URLs and map a contact form submission or clicking on a “Contact Us” email link as a conversion to a lead, and track accordingly
• Track direct leads from unique URLs and lead capture landing pages with the social networks they were shared on.
• Track requests for content downloads behind email signups that are shared on social networks. Do the unique URL trick for the links on separate networks, too, to get a better idea of where the downloads are coming from.
• Overlay names on your fan list with your lead pipeline (hint: If you do this from the start and do it on a regular basis, it’s much easier to handle just the new stuff as it comes in and cross reference accordingly).
• Cross reference names in your community membership database with those in your lead pipeline.

The first thing to do is look at these in total. How many leads do you generate each month that are somehow tagged with a social media-related source? What percentage are they of your overall lead pipeline?

For the last two or similar efforts with other social networks (or, say, your blog email subscriber list), you can look at how many leads per month you generate that are unique to those channels and give a percentage (for every 25 LinkedIn Group members we have, we get an average of 3 leads per month). A twist: look at leads that have languished or aged in your database and are inactive, and which might be reactivated via a social media touchpoint.

Something else to consider is lead stages; many CRM platforms allow you to track the lead stages themselves, whether it’s brand new, or whether they’re in deeper consideration and talks with your sales team (B2B folks, this is for you). You can also now look at the leads that originate in social networks and see how they’re distributed across those stages over time.

Conversion Rates

Leads are great, but what we want, ultimately, is action of some kind.

The real value here is in looking not at each channel (blog, Twitter, Facebook), but at the aggregate of all social media efforts. And conversion doesn’t have to mean sales; it can mean anything you would qualify as a successful interaction according to your goals: email newsletter signup, blog subscription, contact form submission, content download, contest entry, or of course a purchase.

The hypothesis for that is that your social media approach should be strategic overall, so that you aren’t looking at one specific tactic (i.e. your community platform) but the aggregate of all of them.

• Track the website traffic from social networks using some of the methods above: unique URLs shared on social networks, web analytics.This is the key step, because you want to isolate as much as possible the traffic that comes from your social networks.
• In your analytics platform, learn how to set up conversion criteria. For example, in Google Analytics, you can set up Goals, which are essentially specific landing pages on your site that indicate to you that someone has fulfilled what you want them to do. That could be a purchase receipt, submission confirmation, or  “thanks for signing up” page for your newsletter  page.
• Look at the percentage of conversions that originate from social network URL referrals vs. other sources (like search or direct traffic).

Cool thing (and blatant plug for my company): Radian6 has an integration that combines WebTrends analytics with our social media tracking and measurement. It allows you to look at specific pieces of content on the web – including ones that you didn’t create – and see how many of them actually drove traffic and conversions on your website. You’ve got to have WebTrends and do some setup of conversion criteria and tracking codes on your website, but MAN is it cool when it comes together. The fusion of social media and web analytics is going to be really key in the future of social media measurement.
Another way to look at this is conversion of leads to sales that have a social network affiliation or touchpoint with you, but that didn’t necessarily originate there.

• When a lead comes in through any channel, cross reference it with your email subscribers for your blog, twitter list, or facebook fans. (Don’t have a database specific to people in your social media audiences? This might be a good reason to start building it).
• Indicate the association(s) in your database
• Look at the conversion percentage of those that have social network associations vs. those that do not.
• The overall percentage/value difference can be positively correlated to social network activity.
• Bonus: do leads associated with your social networks convert to sales more quickly or more slowly than those that aren’t? That would be time from the date the lead is opened in your database to the date of sale.

Like we discussed above, this is more looking at the potential influence of social media participation on a prospect’s buying likelihood and overall transaction value.

Direct Response Sales

The key to this is very simple: you have to provide a unique mechanism for people to buy from you that is exclusive to either all of your social media channels, or specific ones if you’re targeting individual communities. This is what Dell did, with specific deals that were only available to Twitter.

That can be a promotional code you distribute only inside your online community, a specific and unique landing page you create only for your Twitter followers, or a coupon only available to your Facebook fans (and that they can share with their friends, perhaps). Then, you have to deliberately and carefully track the sales that are generated through those initiatives.

This is one place you can calculate true ROI, or the monetary return on your investment in something. You’d have to:

• Account for the time and expenses you put into a specific social media effort, such as your Facebook fan page. That means people hours, costs for infrastructure, and a percentage of overhead that’s relative to the time and human capital investment.
• Account for the direct sales that come from that effort, by tracking them as specifically as possible.
• Take the sales, subtract the cost, divide the resulting number (the net profit) by the cost figure again, and get a decimal figure. Multiply it by 100 to get a percentage. A positive percentage means that you made more than you spent, or a positive ROI.

Keep something in mind though: information on the internet is rarely without bleed into other avenues. I can get a code on Facebook, email it to 10 of my friends, and they can use it too. I can share a specific Twitter link off Twitter, and instead to my friends on Yammer at work.  Or I can retweet it, and therefore it’s not just sales via your Twitter followers, but the Twitter community overall.

The point here is to evaluate the sales not as only initiating (or caused) from the specific social network, but as a result of your presence on that network (because people will see it there first, and if they share, you have extended reach). See the difference?

Wrapping Up

You’ve no doubt noted the heavy burden we’re putting on web analytics as a part of the measurement equation and there are several valid reasons for that.

First, web analytics have had a longer time to mature, and are a very solid indicator of active behaviors on a critical element of your online strategy (or at least it should be): your website. Second, it’s home base for you, and since social media is an online thing, a hefty chunk of your results and actions are also likely to occur online.

Are their offline indicators of social media success? Sure. You can track them, too, if you’re diligent enough to connect the dots (i.e. finding out how many of your event attendees also follow you on Twitter, even if they bought their ticket elsewhere). But remember this.

Measuring itself is not the goal. Don’t get stuck in the rabbit hole of trying to track everything that’s interesting. Track the stuff that helps you realize if you’re edging toward your goals, in this case goals that align with lead gen, online activities, or sales through online channels. You want a reasonable level of confidence that what you’re doing is having a positive impact, or some data to hint that you might need to adjust your approach.

Few measurements are bulletproof. They’re most often gauges, indicators, signs, and probabilities. Use the measurements to make business decisions, and not the other way around.

Tomorrow, we’ll talk more about potential cost savings you can track that might be impacted by social media. See you here?

Practical Social Media Measurement: Awareness, Attention, Reach

When folks initially start to measure social media, they tend toward more traditional ideas of media metrics, or “eyeballs”. The hitch is that today, just gathering lots of eyeballs isn’t really what matters, but rather gathering the right eyeballs and then driving them to some sort of action.

But there’s value in awareness and broadening the reach of your brand if you’re doing it with the right intent, so let’s assume you’ve got that part in mind, and let’s look at some of the kinds of awareness, attention, and reach metrics you might track.

Fans, Followers, Subscribers and Potential Reach

When you talk in these terms,  be aware that you’re looking at potential reach, not actual reach unless you can ensure that all of  your friends or followers are logged in and view your content in a given day. There are loose ideas about peak usage times and percentages for varying social networks, so getting actual reach numbers is going to be a toughie.

For example, 50% of active users log on to Facebook in any given day, meaning only half your fans are even likely to see your status updates, and that among the rests of the posts they view. So you might only be able to bank on a 20%-30% view rate of your total following. Make sense?

For some practical measurement:

• Use the networks/providers to get raw numbers of attention for your account. Look at your potential reach by channel/site, and also across all channels in aggregate.
• If you have daily or monthly peak time and volume statistics for various sites (like your website), estimate what percentage of your friends/fans/followers you can reach with a single post, a week’s worth, a month’s worth, etc.
• Look at the resonance of a single post by keeping track of retweets and shares. You may have to do several searches to find an accurate number, taking into account those that tag/cite you as a source, and those that simply put in the title of the post, your blog name, or a few keywords without giving direct attribution. This is how you look at secondary reach, or the friends of your friends that might see your stuff.
• Add up the follower/friend counts of those that share your content for a ballpark total potential reach for a piece of content.

The hypothesis here is that greater reach means greater likelihood that for every X number of people, one of them will eventually take action, whether that means buy your stuff, sign up for your service, or whatever else you’ve determined as “success”. The goal isn’t to gain the follower, but to propel them to action of some kind. In order to prove that out you have to:

• Look at your average monthly reach across all of your online networks.
• Count the number of transactions/conversions that you can determine as originating in one of those channels during that same month.
• Establish the ratio: For every 10 people of potential reach, we can count 2 conversions or 5 new blog subscribers or whatever your goal is.
• If you’re looking for a dollar value per fan or follower, you need to look at the total value of transactions referred from those online channels, and divide that into the total number of people you reach in a given period to average the revenue out across your following.

If you’re looking for more measurement relative to engagement and activity, stay tuned, as that’s a whole separate post in the series.

Share of Conversation

Share of Conversation is a combination of a few metrics that I happen to really think gives you strong insight. It helps you understand not just the volume of buzz about you, but how present and recognized you are among the conversations you want to be associated with. In other words, the right eyeballs.

The hypothesis here is that if you’re mentioned in relevant conversations, you’ll gain mindshare and therefore increase the likelihood of someone choosing you over a competitor in the same market.

There’s a host of detail over on the Radian6 blog where our CEO Marcel Lebrun explains the methodology for this measurement in more detail. But the high level process looks like this:

• Set up a monitoring post for a topic, subject, or market within which you want to be talked about. For example, if you’re a non-profit working in diabetes research, you might look at conversations around “diabetes research”, “diabetes support”, or whatever else you’d like to be known/found for.
• Within that topic, track and count the posts that mention the topic(s) you’re interested in during a specific time period. 30 days is a good window. (Metric 1: Total Conversation Posts per 30 days)
• Then track the posts that mention that topic AND mention you together during the same timeframe. (Metric 2: Total Brand/Conversation Posts per 30 days)
• Divide Metric 1 by Metric 2. The resulting percentage is your Share of Conversation.

Read Marcel’s post for more information about why this measurement really matters, and has deeper value than just “how many people are talking about us”.

Strength of Referrals/Recommendations

Another way of measuring some of the value of the attention your company receives in social networks is the number of recommendations or referrals you receive.  You’ll not be able to accurately capture the ones that originate offline (i.e. Betty told her friend about you at the party so her friend visited your website today), but you can get a pretty good bead on the paths of recommendations and referrals that are actively articulated online.

To start:

• Set up a monitoring post for mentions of your brand name, and any related variations.
• Among your results each month, classify or tag the ones that appear to be in response to a request for information or referrals from the larger community as a direct recommendation.
• Also classify or tag posts that have a positive sentiment, like “Bob’s Towing is super awesome and I’d use them anytime!”. You could classify that as an implied recommendation.
• Take a percentage snapshot over a week or a month period to see the percentage of posts that hit on your brand profile and that are classified under either referral category.
• For a deeper step, map as many names/profiles as you can that are recipients of the direct recommendations. Overlay them with your prospect/contact database and see how many of them have actually entered your pipeline.
• Watch all of these numbers over chunks of time (monthly, quarterly, annually). Do they increase? Decrease? Can you correlate increased online outreach (how much time you spend interacting and how much content you share/generate) with increased referral percentages over corresponding periods of time?

Inbound Links

Link love is still alive and well on the web, and it still matters. It’s online currency, contributing to things like your visibility on The Almighty Google.  Measuring them is pretty straightforward these days, but again, it’s all about how you use that information to map other behaviors and insights.

• Track the inbound links to your site and resident content using something like Google Webmaster Tools, or a comprehensive monitoring tool like Radian6 (disclosure again: my employer)
• Look at Google Analytics or your other web analytics tools to see the top referring sites to your website.
• Take the Top 10, 20, and view the Compete.com data for each, looking at unique monthly visitors to get a sense of their potential reach (remembering the points in the first bit here about potential reach and probability of eyeballs at any given time for a single piece of content).
• Download the inbound external links table in webmaster tools, and group the links by time period to graph their increase/trending over time.
• See how the ebb and flow of link volume ties to actions on your website or in your database during a corresponding period: search volume, conversions, signups, etc.
• Bonus: Look at the anchor text people are using in the Webmaster tool to get some insights about keywords or effectiveness of identifying terms.

Social Bookmarks

One way of looking at the extended attention you and/or your content are getting in the social realm is to look at how many times people are bookmarking your content on somewhere like Delicious.com (the example I’ll use here). It’s another way of establishing the resonance of the content you produce, or in which you’re mentioned. A few things you can do to manually track at least the potential reach of this kind of attention:

• Use your web analytics program to build unique parameters/URLs for the landing pages that link from Delicious icons on your site and pages. Count how many people click on/through to them. WordPress plug-ins like ShareThis have analytics that will tell you who shares content via Delicious.
• Do a search on Delicious.com for your company or blog name to see hits for bookmarks that contain that name in the post/article title, in the content, or in the tags that users apply to the post.
• For each bookmark, note the number in the blue box to the right that indicates how many people have bookmarked that particular link.
• If you click on that number, you’ll see all the occurrences of that bookmark, as well as a quick dropdown chart that shows bookmark volume over time for that article, so you can see how much residual traction that content has.
• Under individual user profiles in Delicious, click on “Network” to see how many fans someone has on their Delicious account, which can again look at their potential reach. If you’re determined enough, you can count up the total secondary network for each bookmarker. Yep, that’s going to take a long time.  Does secondary reach tell you something meaningful? That’s for you to decide, based on your goals.
• Look at your referral analytics to see where Delicious.com sits on the list. You can likely correlate traffic volume per month with the number of bookmarks in the same time period.
• Also interesting to note: the percentage of new visits to your site as a result of Delicious.com traffic. Is it a good source of fresh attention for you?
• Bonus Tip: Look at the notes people are adding to the bookmarks to get an idea of the terminology and words people are associating with you.

This is a pretty meaty step that may or may not make sense for a lot of people. It takes a good deal of manual work to run these numbers. But if reach is something that’s really important to you because it supports your goals and objectives, it might be worth looking at.

Traffic from Shared Shortened Links

Sites like Twitter have really ramped up the need and use of shortened links like TinyURL or Bit.ly in order to accommodate character limits. But you can still track this information in your overall website analytics to see how it drives people to your website and through conversion paths.

Here,  you’re analyzing which social networks generate active attention, and you can compare them to one another.

• Build a unique URL or parameter for your website destination using Google’s URL generator or parameter tools in your analytics program.
• You can even build a unique one for each piece of content/URL  specific to the social network you plan to post that destination to. In other words, you’d have several unique parameters for the same destination URL and be able to track which came from what site.
• Use a URL shortener with stats like Bit.ly to then shorten the unique URL and use that shortened link to share on your social networks, keeping track of which you share where.
• Track the click-throughs and referrals from each unique URL AND the conversion rate for each (i.e. what percentage of people signed up or bought or visited the pages you wanted them to).

Note, if you’re using something like Google Analytics to do your tracking, you’ll have to set up appropriate tracking code and events on the pages you’re directing people to land on. It’s a bit of learning and not for this post, but it’s really worthwhile if measurement of traffic matters to you. If you can, enlist the help of some analytics pros to set up your paths and tracking to align with your site goals.

Context

Still with me after all of that? Whew.

You’ll note that in each of these examples, I point out the need to map these individual measurements to the goals or actions you want. That’s the only way you know if more eyeballs means something in the hard, quantitative results world.

I will always argue that there are soft, intrinsic benefits to getting more people to know about you and your work, from reputation building to ambient awareness and brand preference – all of which are harder to measure with certainty, and all of which are ultimately about how those things drive business.

But if you’re on a relentless quest to tie traffic and visibility to hard numbers for subscriptions, signups, sales, or leads, you’ve got some work ahead of you. There’s no doubt about that, and it’s very much where I’ve focused here because that seems to be most people’s burning issue. But it CAN be done. And if you do that, the qualitative stuff is the gravy.

And remember most importantly of all: only choose the metrics that help you illustrate progress toward your goals. I can’t emphasize that enough. It all starts with the goals. Otherwise, the metrics exist in a vacuum, and they’re completely meaningless because they tell you nothing.

Wrapping Up

Remember, as I mentioned in my intro to this series, I can’t possibly cover or list every metric here, nor am I an analyst, so you’ll undoubtedly need to refine these processes a bit. The idea is to give you a starting point for a thought process, to get your brain churning on connecting dots and correlating data.What and how you measure will be utterly unique to you.

If you’re looking for more lists of just the metrics themselves, more posts on those over at my delicious bookmarks on social media measurement. And I’d love to hear your additions or ideas in the comments.

Tomorrow, we’ll look at metrics specific to Revenue and Business Development. Later in the week, we’ll tackle Cost Savings, and then Engagement and Interest. Hope to see you here.

Practical Social Media Measurement: A New Series

The more comfortable we get about the idea of measuring social media, the more we want to dig into the practical application of it. So I wanted to pen a series that puts a little more hands-on thinking to the practice and process of measuring and analyzing social media.

I’m going to approach a few of the key categories where I think social media can have an impact: awareness and attention, revenue streams, cost savings, and community engagement & interest.

We’ll list out a few of the measurements you might look at under each category, along with some simple steps for how to capture and track each of them.

But before we start, it’s very important to make clear my approach, attitude, and a few caveats about this series. Some of them I’ve said before, but they bear repeating, so that we’re all on the same page about how I’m tackling this.

Context:

• In order for measurement to be effective, it has to align directly with the objectives you’ve set. If you need help setting measurable objectives, skip this series for now and start here.
• The power in measurement is rarely in a single metric, but rather in how a combination of metrics helps illustrate progress toward a goal. Followers or click throughs on their own don’t tell you anything of value. Making metrics meaningful means weaving them together to glean insights, not just data.
• Having a hypothesis is important. For instance, “we think that an increase in blog subscribers over 6 months will correlate with an increase in sales”, or “post activity on our help forum will decrease call center costs.” You build your goals based on these hypotheses, and you measure against them to see if you’re on the right track.
• Measurement is a discipline and has to be wired into your organization. If you don’t measure anything else, you’re going to struggle with measuring social media.
• We’ll be approaching a mix of quantitative and qualitative measurements, because both matter.

The Caveats:

• We need reliable statistical data about the usage of sites and their users to make solid assumptions about things like reach and awareness, and those numbers can be nebulous and subjective.  You have to apply consistent definitions of those things in order for your measurements to accurately reflect trends and probabilities. I am NOT a statistician, and my conclusions are imperfect. What I’m trying to illustrate is a thought process more than a perfect methodology, to get your brain connecting dots and thinking beyond fixed data points.
• Measurement at a granular level can limit your perspective. Big picture results – like annual sales – are influenced and impacted by SEVERAL factors, so crediting one small, segmented effort directly and solely with reaching a larger goal is inaccurate. You need to think of measurement at a macro level, and understand that the more detailed measurements all tie into a larger picture.
• There is no “kit of parts” for measurement, nor a global set of standards that applies universally (and hint: our more familiar and traditional metrics aren’t universally applicable either). Sorry. You have to THINK about this stuff to give it the right context for you. Everyone wants to know what they should be measuring, and the answer to that question is always “it depends.” What may emerge over time are collections of useful metrics in specific contexts like lead gen or cost savings, or verticals like pharma or consumer goods. But that requires many companies to test consistent data over time and share results, and we’re just starting in that realm.
• I cannot possibly cover every possible metric, every possible measurement, and every possible scenario or combination of metrics in a post series on a blog, so I’m tackling a few that I think are the most straightforward and broadly applicable. For more posts on metrics and measurement to give you more ideas about what to measure, check out my delicious bookmarks on social media measurement.
• I work for Radian6, a social media monitoring company. I use our platform and I believe in its value, and I’m quite certain I have biases in favor of our product and the measurements and analysis it can help with.

Does all that sound okay to you?

Remember that measurement takes work, and I feel like so many of the “we can’t measure this” conversations are really “we don’t really know where to start and we don’t want to do the work to find out”. But assuming you’re ready, willing, and able to be serious about measurement and put forth the effort, let’s dig in a bit.

First up in the series, we’ll talk about awareness, attention, and reach. Stay tuned.

Wiring In Social Media Measurement

Businesses that struggle the most with measuring social media are the ones that struggle with measurement, period.

Social media isn’t harder to measure than any other area of business. It’s harder to prove causality, but then again, direct and independent causality is awfully hard to prove for any singular event that impacts a sale. Sure, you can track your direct response codes all you want, but you can’t tell me definitively that the advertising you did, or the relationship that person had with Bob the Sales Guy, or the article than ran in the New York Times didn’t also have an effect on that eventual decision.

But I digress. Back to the point.

What Are You Measuring Now?

My sense is that if you’re a company that’s in a measurement frame of mind in the first place, you’ve managed to measure and quantify (or qualify) something that you’re doing. For instance:

• What’s the conversion rate of your e-newsletter subscribers to actual prospects or sales?
• What’s your resolution time on customer service calls?
• What’s the cost of having a human resources department?
• What percentage of your customers renew after the second purchase?
• How do you calculate your customer satisfaction, and what is it currently?
• What return do you get on your advertising dollars, direct or implied (and which is it)?
• How do you justify your investment in your IT department and infrastructure?
• What is your return on training materials or continuing education for your employees?

Guessing that the last two might have thrown you a bit, but these are legitimate measurements, too, aren’t they? We often term measurement as only having value when it relates to dollars in, but I’d venture to say that measuring (and justifying) dollars out is important. After all, if you know your stuff about the actual calculation of ROI, you’ll agree completely.

If, however, you don’t have an answer for anything above or anything that looks like those things, you probably need to improve the practice of your measurement to start with.

Measurement Needs Infrastructure

I’m going to put this simply. If you’re not already rigorously applying measurement (i.e. justification) standards to other areas of your business – on both the cost and revenue side – you can stop blustering about needing measurements for social media specifically. Why? Because you’re not equipped, and you don’t have a discipline of measurement upon which to build.

Measuring things properly takes, at least:

• Time: In terms of man hours to actually do the gathering of data and the further analysis of it, over a period of time that can actually provide context and account for trends and anomalies.
• Tools: The ability to capture, aggregate, and correlate the data you wish to measure, whether that’s a spreadsheet or a more complex software application.
• Humans: One metric alone means little. You need people to draw relationships and correlations between the data points that indicate progress toward the goals you’ve set. Few machines alone are capable of such insights and conclusions. Those people also need to report back their findings and offer recommendations for acting on them.

It’s staggering to see how many companies are demanding measurements and some mysterious definition of ROI for social media that can’t even tell you their conversion rate on various website properties, or the retention rate for their customers. Please stop demanding something you’re not prepared to do as a matter of business, and as a cop-out for not implementing a strategy that is unfamiliar to you.

Start With What You Know

You might think you need to develop and invent a whole new set of metrics to illustrate how social media impacts your business. Sometimes, that might be true or valuable, because there are things we can measure now that we couldn’t measure easily before. For example, I’m particularly bullish on the potential for metrics like Share of Conversation.

However, if measurement of the new stuff confounds you, start with what you know. Figure out how social media activities and participation impacts and influences the metrics you already use.

For instance, when you launch your blog, do your email newsletter subscriptions go up? If you know the average conversion rate of those subscribers (and perhaps their average value as a customer), you’ll be able to correlate the increase in your blog awareness to those subscriptions. Are they the only driver? No. Can you map the two together over time and see if they rise proportionally to demonstrate impact? Absolutely.

If your call center costs you $5 per incoming issue and you deploy a DIY YouTube help series or a Twitter team to triage in the social media realm, watch your daily call volume. Does it drop over a 30 day period in conjunction with those efforts? How much time and manpower does that Twitter team or video series cost you overall? Line up that investment against the drop in call volume by $5 per call, and see if you end up in the red or in the black.

It Doesn’t Have To Hurt

Measurement doesn’t have to be arduous and painful. It should be something you can stream into your daily or weekly processes. Remember that the goal isn’t the measurement itself, but the insights you get out of doing it. Keep it straightforward, simple, and utterly tied back to the goals you’ve set for yourself. (Start over here if you need help setting measurable objectives).

Make measurement a part of each department or function’s leadership. Put it in terms they’re familiar with. And at least to start with, measure social media against and along with the things you’re already tracking. See whether it has an impact either way.

And above all, be sure that you’re building a discipline of measurement and accountability in your business before you blame the medium itself for being immeasurable.

There’s loads of opportunity to evaluate your efforts, if it’s a mindset you’re willing to take.

Over to you. Agree? Disagree? I’m here to listen.