Social Media Marketing Metrics Explained

Social Media Metrics by Jim SterneIn his book ‘Social Media Metrics’, Jim Sterne provides an excellent overview of a topic that is still debated every single day: how to measure the impact of social media marketing on your business. An introduction to social media marketing metrics.

Social media marketing is an umbrella term that covers many underlying forms of marketing. Measuring can be easy if you limit it to one or a few channels. However, vanity metrics are not enough and, although everyone talks Big Data, measuring should really be about data that matter. And by definition that means a single customer view. Measuring is a cross-channel, integrated, touchpoint-oriented, behavior-driven and customer-centric process that looks at the customer (buying journey) and overall value of marketing programs, starting from the individual campaigns and programs but striving towards an overall picture of marketing as a whole. And of course it’s not only about measuring or dashboards (the picture): it’s about people, processes and taking action, based upon insights that are derived from metrics.

However, in his book, Jim looks specifically at social media from the analytics perspective. This doesn’t mean he isolates social media, far from. But he sure does provide a very useful framework, tips, guidelines and processes to answer the social media metrics question.

Social media are being called that way because they’re the first of their kind to allow every individual Internet user to participate in all the communications, interactions, and conversations taking place online, and to connect with people online.

“Social media metrics” is not a philosophical book. It’s a book which takes off from a definition of social media, with that definition being “that which allows everybody to communicate with everybody, and allows everybody to spread his own “consumer-generated” content wherever and however he wants”.

Social media exist and social media marketing works. Period.

Jim doesn’t so much look at the phenomena on its own. He determines it, sums up the advantages, and doesn’t doubt the usefulness of social media for business goals. In his own typical style, he wonders if that out-of-control option people have to upload photos of their lunch is useful for business?

The answer is: “oh yes”. Of course, he then doesn’t proceed to look at the value of an uploaded photo of a burger with French fries. It is simply Jim’s way of focusing on things. As the question that interests him is “how useful” social media are, and of course how to measure that “usefulness”.

This is not a trivial question because the discussion on how to “measure” social media has been going on for years now. With “Social Media Metrics”, Jim gives a plain and clear answer. And it was about time someone did. Who could do the job better than Jim?

Everyone has his own way to classify social media into different categories. Jim has six of them (“and around the time that my book hits the stores, there would probably be two more”, he jokingly adds, but it’s true: social media is evolving at a lightning fast pace).

The six categories are:

•    Forums and message boards
•    Review and opinion sites
•    Social Networks
(the Facebook’s, LinkedIn’s and Ning’s of this world)
•    Blogging
•    Micro-blogging
(should I say “tweet”?)
•    Bookmarking
(Digg, StumbleUpon, Delicious, you know the 278 or so others)
•    Media sharing
(Flickr or YouTube, anyone?)

A categorization I can relate with!

For Jim, social media are an essential part of today’s marketing mix. Period. The reason being something which I often write about: “whatever people say about you online is more important than your advertizing campaigns”.

Jim SterneWhoever expects Jim to further explain why this is the case is best off not to read the book. Or as Jim puts it himself:  put the book down, read hundreds of books, thousands of blog posts (or talk to someone who knows what he’s talking about), and then read this book once you are convinced.

So what does the book exactly cover then, and who is it intended for? The title says it all: it’s about metrics, KPI’s (Key Performance Indicators), and techniques to measure the impact of social media, about translating your goals into data, and about practicing social media marketing efficiently.

In other words: the book is intended to optimize the value of your social media marketing for your company, your brand, your bottom-line, and of course for the people with whom you converse, interact, and to whom you “sell”.

Social media marketing metrics and defining your business objectives

Social media marketing is marketing. You need a strategy and one of the first steps is defining your business objectives. We do not use marketing without reason or manage a company only for the sheer pleasure of it And we do not measure just for the sake of measuring.

Exactly the same applies to social media marketing. It serves business goals. Social media listing, for instance, has a purpose: identifying what people say in online conversations about our company, brands, competitors, their needs, trends, etc. The final goal is to use the data we thus acquire in order to improve our marketing efforts and pro-actively respond and engage.

Marketers are increasingly accountable for what they do, they have to create value and need to have a dashboard to improve, guide and amend the efficiency of their social media marketing activities. Of course the same applies for other managers in a company.

A pilot needs to use a dashboard if he wants to reach his destination safely. The same applies for a company. But before you use the tools, of course you need to know where you want to fly to. So you need to have objectives.

Those who are familiar with web analytics know all this but there is a more important reason for this reminder. Companies today simply cannot survive without metrics, objectives, analytics data and actionable information. If you cannot provide value using your social media presence, you’re off for a bad flight. If you do not have clear goals, you can not define a strategy and a planning.

In these times where people are more online, hundreds of digital tools are being used to communicate, the customer moves online, there is a shift from “selling” to “buying” and people decide how, where and when they will contact you, you have no option than to listen, measure and act upon information.

Someone that does not measure social media and online interactions is a pilot who flies in a heavy storm and thick fog without a radio, compass and parachute.

But there is more. Web analytics is not just a matter of data, metrics and measuring. Analytics primarily is a matter of people, processes and, as the term says, analyzing and taking action according to that analysis.

It is not about the data but about the information you can DO something with. It is not simple metrics but about key performance indicators to reach your destination.

100 social media marketing metrics and 3 business goals

Even if actual “sells” are rarely being made on social media, as a company and a brand, you sell and buy things on them that yield a lot more financial value in the long haul: “human” value, trust, reputation, influence, service, the people behind your brand, loyal customers, etc. For what it’s worth: those are not Jim’s words, but my own.

So how does one exactly measure social media? Jim already provides a hundred social media marketing metrics in the preface of his book alone. And those aren’t even his own. He mentions the 100 metrics which David Berkowitz posted with some others on the Marketers Studio blog at the time.

Is it a book that gives away everything in a preface? No, because as Jim and Berkowitz say: which social media marketing metrics you need first of all depend on the goals you want to realize with the use of social media.

Remember that social media marketing is marketing as well. So, determining goals and a strategy is just as essential here as it is with other forms of marketing.

Where is the emphasis when determining the Key Performance Indicators? Jim distinguishes three main business goals:

•    Raise revenue
•    Lower costs
•    Increase customer satisfaction

Let me have a look at these three business goals and tackle them from my social media marketing point of view, spiced up with elements from Jim’s book. In the illustration below, which is a reproduction of the one in Jim’s book with some extra thoughts, you will see that all three business goals partially overlap and in a way even are the same in this day and age…

The three business goals in defining social media marketing metrics and key performance indicators

1.    Raise revenue

Revenue is a matter of cash. Period. Just like ROI: what’s the financial return for every dollar you invest? Revenue is of course a broad concept. There are hundreds, perhaps even thousands, of factors contributing to the revenue. The challenge is to identify those factors, and then improve them. Revenue is what you need in order to keep your internal customers/suppliers, also known as employees, and your external customers/suppliers, like shareholders, satisfied, to innovate, to invest, to be able to serve your customers better, to be able to create more value, etc.

Revenue is a general goal, which you have to keep in mind when marking out key performance indicators. However, this doesn’t mean that you should only determine KPI’s that will lead to an immediate return. If an influential blogger tweets about a positive experience with your company or brand, it might have an indirect influence on your revenue.

When you invest in expanding a trustworthy, participative, human, and “open” brand in social media, it’ll lead to a rise in the revenue in more than one way. On one hand, there’s the brand’s power itself. Also, there are people who buy brands and are therefore willing to pay more in comparison to a “cheaper” brand. Bigger margins contribute to the amount of profit.

A trustworthy, participative brand which provides value by offering relevant content, by conversing, by serving its customers through social media, and by proactively practicing customer service, deserves trust. A brand perceived as trustworthy and valuable becomes a welcomed partner in social media, which in turn leads to more turnover.

Of course, it’s much easier to calculate what the ROI and the impact of a PPC campaign is in a social network or on a social bookmarking site, but don’t solely focus, especially not in social media and inbound marketing, on immediate results. That’s also not what Jim means, by the way, but I just wanted to emphasize it.

2.    Lower costs

ROI in its simplest form is partially determined by the costs. In order to maximize profits, you don’t merely look at the turnover but you also try to lower the costs.

Social media can play a crucial role in this as well. In his book, Jim shares the two obvious examples of customer service and market research. Yet Jim means that when determining the KPI’s, you should keep the lowering of costs in mind here as well.

Again, this shouldn’t lead to immediate cost savings in the short run. As Jim correctly points out – “You must spend money to make money”. He adds that it’s more than sufficient when you can demonstrate that social media are a less expensive way to get to know the public (or your client’s) opinion, to make “friends” (does your company have them yet?), and to influence people.

I would like to add that it takes time (and therefore money), persistence, people, and investments to make use of social media in order to lower the costs. Social media marketing does not come for free, just as it is not a solution to every challenge. But that it can work cost-effectively is a fact.

Just how do you generate leads nowadays? Google Adwords? Events? What is the cost-per-lead? Imagine investing that same budget – or less – in creating a valuable blog full of tips and tricks, a solid, informative newsletter with sharing tools, some ‘social media presences’, and white papers to which you send traffic through social media and guest blogs: what will be the cost-per-lead then?

In my experience, it’ll be lower.

Here is another example. Imagine investing a certain amount of money in television ads today. You learn that online video works well and decide to spend part of your television budget on online videos. Lots of companies immediately recognize the cost savings and start making cheap videos. But what if you spend the same budgets that you spend on making a television ad on a quality, engaging, and in social media widely discussed video on a content sharing website like YouTube (and naturally also on your blog, etc.)?

Lowering the costs asks for investments, introducing new metrics, and determining the right KPI’s in the short run, but also in the long run.

3.    Increase customer satisfaction

A satisfied customer will lead to new customers. Companies have known this for centuries. Focusing on existing customers is also cheaper than getting new customers.

Satisfied customers buy more and become a part of your marketing and sales team. Because of the scale of social media and the power of word-of-mouth in this era of social media, customer service and raising the customer satisfaction is now one of the most important business goals.

Someone, who wants to practice social media marketing professionally, must focus his KPI’s and metrics largely on elements like engagement, interaction, influence, customer satisfaction, etc.

With social media, you now have more possibilities than ever to step into a direct dialogue and offer value, so that your customers become more loyal, and also that you can expand the influence of your company.

The viral, narrative component of social media stories and the pace with which customer experiences are being spread may be the most important reason to practice social media marketing. Listening, anticipating, and reacting on social media is not solely a matter of your brand reputation, crisis management, and raising the customer satisfaction: it’s making sure that the satisfied customers, “followers”, “fans”, etc. will proclaim their satisfaction as well, bringing new customers along with them. If you succeed in this, you just might realize what the best way to lowering costs is.

Therefore, Jim’s three business goals should constantly be kept in mind while defining social media marketing metrics and KPI’s.

How do I increase my turnover, lower my costs, or make my customers more satisfied with a certain activity?

Social media is about people and relationships, social media marketing metrics as well

If you know what you want to achieve, how you want to achieve it, which data you’ll need for it, and how you can transform that data into real-time information, you’re ready to start, always keeping the three goals in mind.

But, in conclusion, let me get back for a minute to what Jim writes on what we need in order to choose the metrics for every step of our social media marketing metrics story.

With this, he looks at the “flow” of the relation between a company and a customer/prospect.

And since social media marketing is purely about relations between people (businesses are people) and people (customers are people, we often forget it), this is an ideal framework to address the right social media marketing metrics in every step, step by step.

1.    Draw the attention: you can’t sell to someone who doesn’t know you exist.
2.    Make sure they like you: Jim devotes an entire chapter to recognizing “sentiments”.
3.    Make sure that people interact, and undertake action.
4.    Convince them to buy (we less and less sell ourselves).

You can read more in Jim’s book.

Join us on June 10th in Antwerp, Belgium, for the Content Marketing Conference Europe. With confirmed speakers such as Jay Baer, Lee Odden, Mike Corak, Doug Kessler, Kelly Hungerford, Dado Van Peteghem, Tristan Lavender, Guido Everaert, Tom De Baere and Xaviera Ringeling (more to be announced), we'll take you across a learning experience leading to tangible insights and actionable inspiration, moderated by media expert Jo Caudron!


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  • http://brandoptions.in/category.php?id_category=4 Buy Facebook Fans

    Good overview. Though along with quality, the quantity matters too in SMM. You need the baseline fans, followers, supporter, you need those SEO techniques to boost up the bottom line, even though it maybe low juice, low PR.