The Elusiveness of Measuring Social Media ROI

I recently purchased Purex Complete Crystals fabric softener. (All of you that sell this type of product, cover your ears and hum quietly to yourself. 🙂 There is a point here.) This type of fabric softener is added to the washer, rather than the dryer sheets I’ve always used. What caused me to buy it? I met them at a blogger mom conference and they gave me a sample. I went home and tried it (not right away…it was when my regular brand ran out.) And I liked it. A lot. So a few months after receiving the sample, I made a purchase. And now I’m a regular customer, and this is what I buy.

But how on earth can the company equate their attendance at a social media conference to me becoming a regular customer?

They can’t. Because I purchased at my local supermarket.

When we talk about traditional ROI, a transaction has to happen. Money has to be spent. We just don’t always know what caused that transaction.

But what Purex did that was smart was that they participated anyway. Sure, I may not be the person they were totally hoping to reach. I’m sure the ideal was that an influential mom blogger would try the product and blog about it. And maybe they did. I wasn’t really paying attention. That might cause more people to buy the product.

I’ve recently had a few companies express their doubts about social media to me. “I feel like it’s valuable, but my board wants to see numbers!” It’s hard to justify the expense of a social media program if you’re not tying it into dollars.

But that’s the wrong way to approach it. Think about traditional PR. Think about your customer service department. Do these generate a lot of ROI? They’re important, though, aren’t they? Because social media is one of your public faces to the world. You are shaping opinion that may ultimately lead to a transaction at a later date. It’s about increasing positive sentiment about your brand. And it’s about being there to make things right when things go wrong. It’s the ultimate communication tool, connecting you to the end consumer in a way that direct selling companies have traditionally found to be extremely challenging.

Sure, there are things you can measure, if you set your website up right (something we have a challenge with in this industry), including:

  • Entrance paths tracked through to conversion. Using Google Analytics, answer these questions: Where do people come from online? What do they click when they get to your website? Does that visitor make a transaction or complete a conversion on your website? This is the simplest way to measure ROI.
  • Campaign conversion. The way direct selling companies set up their online ordering systems sometimes makes it hard for us to track entrance paths through to conversion, because our replicated websites are housed on a separate system. In this case, setting up individual (hidden) pages on your website for specific online marketing campaigns can help you get some of the data you need. Especially if those pages have strong calls to action that lead to some type of conversion (such as signing up for your newsletter or signing up immediately for the opportunity through the corporate website.) You can track the analytics on those individual landing pages to help measure your ROI.
  • Asking them. At each customer touchpoint, ask customers where they heard about you. Present them with a list, or let them fill it in themselves. It’s not quite as precise, but it gives you data you wouldn’t get using Google Analytics. For example, if I meet you at a blog conference or see some of your tweets on Twitter, I might decide to attend a party in my local area. You won’t know that unless you ask.

We love to look at numbers like number of fans on Facebook, because numbers moving in a positive direction must mean you’re doing something right, right? But number of fans is NOT ROI. And so we need to define the conversions we want to see, and then set up tracking methods that allow us to analyze those conversions.

But we also need to realize that there will be some things you won’t be able to measure. Things like the fact that your consultants are happy that you’re online and talking to them, which gives them one more reason to stick around. Like the fact that your customers appreciate the support you give them online, which means they don’t have to sit on hold waiting for customer service on the phone, which means they’ll probably order again. (And that also saves some time for your customer service department to support other customers, adding to the efficiency of your customer support team.) Like the fact that you’re providing your sales force with content they can share with their own customer base, which helps them ensure that those folks are more likely to place an order, come to a party, or join the team.

Is your company finding a positive ROI on its social media efforts? How do you know? Would love to read your thoughts in the comments below.

2 Responses to The Elusiveness of Measuring Social Media ROI
  1. abegail
    November 25, 2011 | 3:37 am

    I talk about the book and the seminars I give. In exchange, my FB friends share my name with many unemployed or underemployed lawyers they know.Thanks a lot for sharing this important topic to us..
    abegail recently posted..stock trading

  2. Marina Modlin
    November 23, 2011 | 12:11 pm

    Hi Jennifer,

    Thanks for bringing up this interesting topic!

    I run two businesses, and use FB to market for both.

    The first is an estate planning law firm. I talk about wills and trusts, and related things. My FB friends reach out to me when they have legal questions, and recommend me to others. So, my ROI is the number of people who became clients or just asked me legal questions.

    The second is a book on how to build a freelance law practice, for young attorneys. I talk about the book and the seminars I give. In exchange, my FB friends share my name with many unemployed or underemployed lawyers they know. I can’t really measure that, unless those people register on my website, or buy my book, but my friends frequently tell me that my name has been passed on.

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