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How to Develop Meaningful Metrics and ROI

Nothing a company does is free. Somehow people seem to forget this when it comes to social media. Sure, setting up a Twitter account is free. Launching a snazzy Facebook page? Zero dollars. Even with certain community platforms, simple monitoring applications and analytics packages you’ll see a $0 price tag. But social media takes people to make the social side of social media work, and more often than not, it takes “for pay” technologies to optimize the media side of social. And it always takes time, and everyone knows the old cliche....

So, contrary to what some people will say, most social media initiatives are not actually free. When it comes to putting a plan together for the first time, or doubling up on your recent momentum, it’s important to realize that funding for new or improved service or marketing initiatives doesn’t usually appear automagically. Getting resources allocated to your project means demonstrating business value with meaningful metrics, and more and more, we are asked to capture and prove the most elusive social media metric of all—ROI.

Like most things social, there is no single key performance indicator that will describe the success of all social media implementations—KPIs (Key Performance Indicators) will depend on your objectives, the behaviors you are trying to inspire, and the outcomes that are most meaningful to your business. Susan Etlinger, Altimeter Group’s social data expert, said, “Everybody has data, what we need is meaning.” What does having 10,000 Twitter followers tell you about your business? Nothing? Maybe something? Context is king here—data is only meaningful if it is intrinsically tied to what you are trying to accomplish.

One way companies can begin to think about success metrics is to consider a series of KPIs in three broad categories—awareness, interest, and action—which can be thought of in terms of three sections of a funnel that progressively increase in value, where

  • Awareness is the broadest section of the funnel, which might be measured by your community’s number of members, likes or followers, which could support a goal of expanding potential reach. On their own, awareness metrics are rarely viewed as a measure of business success.
  • Interest is the middle section of the funnel, which represents significantly more business value than simple awareness metrics. Interest metrics are measures of engagement: forum posts and replies, likes, comments, retweets, media views, and downloads. These metrics tell us that people are engaged, that content is being shared, and that value is being created.
  • Action is the narrowest section of the funnel, which represents the most business value and can be measured in different ways. From a marketing perspective, this usually means measuring conversions, that is, tracking a user’s path from a social media interaction to a “microsite” or lead generation web page, to the submission of contact information or similar action.
  • From a customer support perspective, this can involve tracking a user’s path from the company website, search query, or social media interaction, to the company’s support forum. It is what can be inferred from the user’s next action that can be interesting:
  • The visits to the forum can be viewed as successful if users indicate their questions were “resolved.” This information can be captured in a number of ways, including tracking the volume of new forum posts compared to those marked in the community as “resolved” or “answered my question” (or similar).
  • Of course, not every user that has her question successfully answered in the forum is going to remember to mark the question as resolved. And although you can certainly develop reasonable estimates of what percentage of successfully resolved forum posts are actually marked as such with follow-up surveys (which is one of the most popular methods), it is also helpful to triangulate your metrics to help support your assumptions.
  • As a quick aside, let’s say you have a data point on new forum posts versus those marked as resolved. For example, you have 100 new forum posts, but only 50 are marked as resolved within 72 hours—a 50 percent resolution rate. Let’s also assume that you’ve gone a step further and know from your survey results that 20 percent of users who had their questions resolved said they neglected to close the loop and mark the question as such. By interpreting these two data points, we can reasonably assume that we have a 70 percent resolution rate in our support forums. But you can build even more confidence in this finding by triangulating your interpretation of resolution rate with tracking where traffic flows on your online properties. For example, what percentage of your online forum users visit your Contact Us page after their forum session? If the answer hovers near 30 percent, it could support your assertion of a 70 percent resolution rate.

Think of the social metrics value funnel as a launch pad—it’s more of a concept for framing an approach to metrics than a template. Clearly, there are countless ways to measure social—from content amplification to sentiment—that are as creative and unique as the businesses and business objectives they aim to support.

Many companies have developed their own unique measures of performance, like VMware, who has used the following three KPIs that are unique to their business goals: awareness, accessibility, and engagement.

  • VMware KPI: Awareness

    Business goal: Ensuring customers are aware of self-help content

    What they measure:

    • “Social Network Effect”: Percentage of Knowledge base (KB) visitors coming from social networks
    • “VMware Search Index”: Percentage of KB visitors using VMware.com search engines
  • VMware KPI: Accessibility

    Business goal: Ensuring content is easy to consume

    What they measure:

    • “Single Page View Index”: Percentage of viewers that access no other VMware.com assets before or after viewing the article in a session
    • “Exit Index”: Percentage of viewers who do not access any other VMware.com assets after viewing a KB article
  • VMware KPI: Engagement

    Business goal: Ensuring customers are interacting with or sharing content

    What they measure:

    • “Twitter Engagement”: Percentage of Twitter traffic about KB articles outside of VMware
    • “Ratings Rate”: Percentage of KB visitors that interact with/rate content

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