Investing in social media today is not an “if” but a “how” for most businesses.
Customers and prospects increasingly turn to social media channels throughout every stage of their buying journey, whether that’s for a consumable product or a well-thought out business software purchase. In fact, social media use has grown by more than 20 per cent year over year, and in 2016 alone almost half a billion people signed up for new social media accounts.
Companies of all sizes are feeling the pressure, too; in 2017, nearly 90 per cent of US companies are using social networks for marketing purposes.
Despite the strong adoption, however, many businesses still struggle to put a strong business case together demonstrating why social networking is important to their organisation, and in what ways it’s having a positive impact on the bottom line. Less than five percent of CMOs say that social media is contributing significantly to company performance.
But why? These digital channels are rife with data and information, which should make demonstrating their impact easier than with other efforts. The problem, however, is one of information isolation.
Breaking the marketing barrier
Social media in business quickly became the birth right of the marketing and communications organisations within companies. The very nature of the tools and the obvious benefits of using them for marketing and advertising meant that marketers seized the opportunity quickly, but with that came a bit of tunnel vision when it comes to understanding the strategic impact that these emerging digital channels can have.
While social media is indeed a powerful marketing channel, tracking its impact requires integrating marketing metrics with other important business KPIs like revenue, customer satisfaction, and cost reduction.
Many companies are looking for some sort of standard formula for social media ROI, often before the “I” part of the investment is ever made in the strategies and programs. But defining the outcomes for social media requires understanding the costs and efforts involved, and all of the ways that positive results can impact the business for the better.
Perhaps faster customer service response times on Twitter and Facebook can increase your support efficiencies or defray significant call centre costs with the ability to respond to multiple streams simultaneously.
And while we know that keeping a customer is less costly than acquiring a new one, did you know that the all-important Millennial demographic cites engagement as a key driver for their loyalty to a brand?
Looking at social media through the lens of marketing simply isn’t enough; we must broaden our definitions of success for social media to include indicators across the entire customer lifecycle, from awareness and research to customer retention, customer lifetime value, and referrals and recommendations to others.
Doing so requires thinking of social media and its data not just as a marketing lever, but as a critical source of business intelligence.
The infrastructure challenge
In order to bring social data closer to the centre of an organisation, most organisations need to make investments in technology.
Data integration is still a thorny challenge for social media platforms; 2017 is yet early days for bringing together mission-critical data sources like CRM, customer satisfaction, market research and broader digital analytics like website and e-commerce data. But as the demand increases thanks to more sophisticated social strategies in the market, technology platforms are rising to the challenge and seeking to bring social media closer to the centre of organisational intelligence.
As recently as five years ago, most companies could get away with handling their social media accounts natively on each platform and relying on cursory metrics assembled in spreadsheets to track activity.
But as the demand for true accountability for these programs grows, so does the need for enterprise-class technology platforms that can handle not just the day-to-day management of social media content and engagement, but the data gathering, analysis and insights required to contextualise all that information specific to each business’ objectives, resources, and programs.
While social media used to be a “nice to have” for most companies, truly proving value and justifying the significant resource investment of doing social media well requires an equally significant investment in technology enablers that allow for the most critical component to enterprise social media success: scale.
Building a measurement framework
The hard reality: there is no “one size fits all” formula for calculating social media ROI. What’s more, “ROI” is only one metric; there are many ways to define success for social media initiatives, and not all of them are directly tied to a financial return on a monetary investment.
But there are some consistent questions that, when asked and answered thoughtfully in a business context, can help any company develop an accountability framework that’s repeatable, scalable, and can adapt to changing needs and strategies over time.
Here are a few of the most helpful:
- What business-level goals are we hoping to advance using social media? Are those goals currently and consistently measurable in and of themselves?
- Have we articulated our programmatic social media goals - whether sales, marketing, or customer service and loyalty related - in a way that allows us to clearly derive the metrics we need to track?
- Do we have the ability to benchmark where we stand today in relation to those business objectives using the data we have today? If not, what gaps do we need to close in order to be able to do that?
- Can we accurately measure the investment we’re making in social media, including human, technology, and other resources?
- Which 3 KPIs will give us the strongest indicators in 6 months that our social media programs are successful (or not)?
- On what cadence will we measure our social media program performance, and who needs to see the results?
- What will we do with the intelligence we glean from our measurement practices, and how will we evaluate our decisions and programs moving forward based on that information?
The most important factors in creating a successful social media accountability framework for any business are the availability of data, the people and processes needed in order to make measurement a disciplined practice (rather than a stand-alone event), and the willingness to test, analyse, and adjust programs based on learnings.
While the goals and results from any one organisation’s programs may vary widely from another’s - and still be perfectly valid - companies who successfully account for their social media investments are all diligent in their goal setting, tracking, reporting and review processes.
The discipline of accountability
When companies fail at social media measurement, it’s not usually because the social media programs themselves are ineffective. Most often, companies simply haven’t treated the practice of measurement and accountability in social media with the same rigor that they do customer service programs or sales operations.
As organisations make more strategic commitments to digital and social media programs, best practices will continue to emerge for integrating data sources, understanding what success looks like, and how technology underpins those practices to make tracking and reporting more streamlined and effective.
But the first and most important investment any company can make in social media accountability is in the practice of accountability itself.
By treating social media as a critical and strategic business investment - not just a clever set of marketing tactics - we can build smarter programs, more effective measurement frameworks, and pave the way for a future where our investments in digital and social media are not just seen, but understood.
Amber Naslund, Senior Director, Industry Leadership, Hootsuite
Image Credit: iStock