In my prior Social Media Examiner article about Social Media return on investment (ROI), I discussed the financial definition of social media ROI.

This article goes a step deeper by working through a few examples of estimating the social media ROI.

Why Estimate a Return?

Before we go any further, let’s review why we need the social media return and ROI again.

You use the return and the ROI to compare the efficiency of marketing campaigns; for an in-house team, you can use these numbers to negotiate budgets with your management; for agencies, you can use estimated numbers to land prospective clients and to retain current clients. The numbers are used in conjunction with social and web metrics to analyze and optimize current and future campaigns.

Last but not the least, a primary reason for using the return and the ROI is social media financial accountability. As social media initiatives become mainstream, executives are holding them to the same accountability as other business initiatives, demanding financial returns and ROI on social media investments.

In the article mentioned above, I also said that the ROI calculation is easy; you simply use the financial ROI formula. The tough part of social media ROI is to tie a hard-dollar value to the social media return.

How Should I Estimate My Return?

So, how do you estimate the social media return?

In this post, I will show how the social media return can be estimated. As I work through these examples, it’s important to remember that I can only estimate the social media return and ROI—as in most areas of marketing, exact numbers are not possible.

ROI month-over-month trending.

To estimate the social media return and ROI, you need to start with a 3-step process:

1. Define your social media goal.
2. Based on the goal, define your social media return.
3. Finally, define how you will tie hard dollars to the social media return.

So let’s get started with estimating your social media return and ROI!

To show how we can estimate your social media return and ROI, I will use three examples: return on sales, return on consumer insights and return on customer support.

Social Media ROI on Sales

In this case, we are tasked with estimating the ROI on sales. The tricky part is to attribute sales to social media.

Using the 3-step process, we first define our social media goal as “we want to increase sales.” Second, based on the goal, we’ll define the return as the value of sales that can safely be attributed to the social media campaign. Third, the hard-dollar value is the amount of sales dollars.

The second step in the 3-step process—attribute sales to a social media campaign—is hard to do. How can you safely attribute sales to a social media campaign? Getting accurate numbers is tough, but we can estimate sales by employing a few different methods.

The first method is to look at is last-touch sales, which means that by using our web analytics program, we can follow a user upstream from the online check-out counter to where the user entered the stream. If the user entered the stream from one of our social media touch points, we can attribute that user’s sales to our social media campaign.

A second method is to provide our users with social media campaign–only coupon codes, which means that if a user checks out with this coupon code, we can attribute that sale to our social media campaign.

A third method, which is a bit more involved, is to forecast the value of our sales without a social media campaign. During the campaign, we compare actual sales with forecasted sales and assuming that the actual sales are higher than the forecasted sales, we can use the difference as the value of our social media return.

Sales gap analysis.

Each method is good; however, a combination of methods could give us a more accurate picture.

Now, the last step in the process is to declare that the amount of sales that you attribute to your social media campaign is in fact your social media return. Based on the cost of the campaign, you can quickly calculate your social media ROI using the standard financial ROI formula.

Social media ROI = (return – investment) / investment %.

For example, during last month, we estimated that we could attribute $2,500 in sales to our social media campaign. This is our social media return. Let’s assume that our investment in our social media campaign was $1,000. Using our ROI formula:

Social media ROI = ($2,500 – $1,000) / $1,000 % = 150%

This means that for the last month, we estimate that our social media ROI is 150%.

Social Media ROI on Consumer Insights

In the second example, we will try to estimate the social media return on consumer insights.

Using the 3-step process, we first define our social media goal, which in this case is to generate a high number of high-quality consumer insights from our social media campaign. Second, we define the social media return as the value of these consumer insights. Third, we’ll tie hard dollars to the return by comparing what it would cost to generate the same quantity and quality of consumer insights using a focus group.

Here again, we run into the same problems as with sales: How do we attach a hard-dollar value to consumer insights?

The answer is that we use consumer insights equivalency. We know the cost of a focus group. We also know the number of acceptable consumer insights per focus group. Based on these two numbers, I can estimate the cost per consumer insight.

Over the course of a month, based on what our users are saying to each other and to us on social media, we count all consumer insights that we determine to be of equal or higher quality as the consumer insights from a focus group. Based on this count and the per-insight cost, we can determine the value (the return) of our social media presence.

Using the standard financial ROI formula, we can quickly calculate the ROI.

For example, in a particular month, say the return on consumer insights is estimated to be $900 and the investment during that month was $600. Using the ROI formula:

Social media ROI = ($900 – $600) / $600 % = 50%

So the social media ROI on consumer insights for this particular month was estimated to be 50%.

Social Media ROI on Customer Support Calls

In the last example, we will calculate the social media return and ROI on customer support calls.

Using our 3-step process, we first determine the goal of our social media campaign. In this case, our goal is to save customer support dollars by minimizing the number of calls that our customer support group needs to handle. Second, we define our social media return as the amount of dollars saved. Third, we tie a hard-dollar value to the savings by multiplying the average cost per call with an estimated number of calls that we avoided by using our social media presence.

Any customer support group should know exactly the cost of an average call. In the U.S., the average support call cost is approximately $10 to $25 per call, depending on the product, services and the vertical.

It is tough to estimate the number of avoided support calls; nevertheless, we will present two methods.

First, Charlene Li and Josh Bernoff, in their national bestseller Groundswell, walk through a customer support cost analysis based on cost savings from a community forum. The authors base their estimates on parameters such as the percentage of customers joining the forum and the percentage of customers finding answers on the forum. The outcome of the analysis is the annual cost savings from avoided calls.

Another way of estimating prevented calls is similar to our sales estimates. We forecast the number of calls without social media. Over time, we measure the actual number of support calls. The number of prevented support calls is the difference between forecasted and actual support calls.

Support call gap analysis.

Based on the social media return and the social media investment, it is again easy to calculate the social media ROI using the financial ROI formula.

For additional reading, Kathy Herrmann and Dr. Natalie Petouhoff wrote a white paper that does a great job analyzing the ROI of Social Customer Service.

Conclusion

We laid out three ways of estimating the social media return and ROI: sales, consumer insights and customer support. It is important to note that a social media campaign does not need to include all three social media returns. In fact, most campaigns don’t. The primary take-away is that your social media return and ROI depend on the goals of your social media campaign.

So what do you think? Do these three ways of estimating the social media return and ROI make sense to you? Can you use them in your business? How do you estimate the return and ROI today? Leave your comments and questions in the box below.

This article will help with three case studies.

But first, about that ROI… It took some time after the advent of online advertising before marketers started asking, “What are these ‘eyeballs’ worth that I’m paying for?”

With social media, the tough questions around metrics started being asked much sooner. As marketing budgets stay tight, it’s no surprise that the need to show results is high.

So when it comes to contests on the social web, how do we go about evaluating ROI?

Investing in Your Social Media Contest

Before you can demonstrate a return, you must first make an investment!

As mentioned in my previous post on social media contests, it’s important to have a well thought out marketing plan for any promotional campaign. The first step is always to define objectives: are you trying to engage existing customers, acquire new users or gather data? Only then can you set realistic goals and build a campaign to deliver on them.

Once the objectives are set, you can determine the type of promotion and how you’ll communicate. You’ll likely need to invest in marketing beyond the cost of merely setting up your contest.

This investment will generally focus on driving traffic to the promotion site or application. If you’re running a contest that includes user-contributed content, be sure you take advantage of sharing this content in both your social and traditional marketing efforts.

If you’re running your contest in Facebook, Sponsored Stories are a great way to promote. While the platform you use to run your contest should include integrated sharing tools, those shared items may get buried in the news feed.

With Sponsored Stories, your promotion will remain visible as users see that their friends just interacted with your page or application.

Other forms of investment outside of Facebook advertising could include Sponsored Tweets on Twitter, targeted online advertising and email campaigns to your existing customer list or through partner email channels. Note that co-marketing can be a huge bonus if you find partners that can be brought into your campaign (potentially as sponsors).

Of course there are some campaigns that can succeed, again depending on your objectives, without major cash investment. However, even in these instances, it’s rare that a campaign simply “goes viral.” Generally there’s a good deal of forethought and effort that goes into building the momentum for something to truly take on a life of its own. So even if you aren’t investing hard costs in advertising, you must be prepared to allocate resources in the form of human and social capital.

What’s the Return on Social Contests?

Return on investment doesn’t have to mean solely financial return. Bottom-line results clearly matter, but they can’t be the sole objective for any social media campaign.

Objectives drive outcomes. By setting your objectives clearly up front you can establish what goals matter to you and track against them.

Return on investment doesn’t have to mean solely financial return. Bottom-line results clearly matter, but they can’t be the sole objective for any social media campaign.  In this post, Dag Holmboe provides a good perspective on social media ROI.

Depending on how you set up your promotion, these are some of the key metrics to consider:

• How many people visited your promotion? How much time did they spend engaging?
• Of those who visited, how many actively participated? How many entered? How many voted (if applicable)?
• How much sharing took place?
• What type of content generated the most interaction (i.e., comments, Likes, retweets)?
• How many new Likes on Facebook or followers on Twitter?
• What was the level of Twitter activity (especially if you have a contest-specific hashtag)?
• What was the redemption rate of any coupons or offers?
• How many users opted in to your email list?
• If you included any outbound links to drive traffic, what was the click-through rate?
• And ultimately what new business (revenue/profit) can be attributed to the promotion?

Here are several case examples to compare and contrast different forms of investment and return on that investment.

Crate and Barrel’s Ultimate Wedding

Giving one lucky couple $100,000 to create their ultimate event.

Objectives

With its Ultimate Wedding contest, multi-channel home furnishings retailer Crate and Barrel sought to drive gift registry creation and engage consumers online.

How it Was Done

Users were required to create a gift registry through Crate and Barrel before being eligible to enter the promotion. (Note: Requiring this type of “consideration” to enter a contest introduces greater legal complexities than a contest with no consideration to enter.) After a user’s registry was verified, he or she could submit an entry to the contest, which consisted of a photo and short answers. Public voting narrowed the field and a panel of judges ultimately picked the winner of a $100,000 dream wedding. The contest was promoted on the Crate and Barrel website and through other online advertising, as well as in-store.

Results

This contest has now run two consecutive years and generated more than 17,000 entries, each associated with a registry valued at more than $2,000. That’s $34 million in registry value, the majority of which represents new customers for the retailer.

While the amount of product purchased from these registries is confidential, even a conservative estimate yields a large number. In addition to the financial results, Crate and Barrel also experienced a lift on numerous key social metrics as well.

Comments

So after all I said about focusing on results beyond the bottom line I’m starting with one that shows some impressive financial metrics. Obviously not everyone has the ability to offer a $100,000 prize and to put such significant resources into marketing a contest. Read on to see how smaller investments can also yield powerful results.

But remember that there are lessons here that apply to any contest: First, prize matters—even if it’s not $100,000, it must be something appealing to the target audience and must be commensurate with the level of effort users are expected to put in. Second, it’s important to tap into all possible channels to promote your contest, whether that’s social media, online ads, email lists or offline promotion.

Cosmopolitan Orthodontics Photo Contest

Contests have proven to be an effective marketing tool in a field not traditionally perceived as fun or cool.

Objectives

Ingenuity, a marketing firm catering to orthodontists, wanted to develop a creative means to drive new patients into orthodontists’ offices.

How it Was Done

Utilizing the simple premise of a photo contest, existing patients (generally children and young adults) were asked to “show their smile” for a chance to win an iPad or similar prize. The entrants were then encouraged to share through Facebook. Their friends, and more importantly the parents of their friends (who were potentially in the market for orthodontics services), would then see the mention on Facebook.

Results

Based on a number of contests that Ingenuity has run with multiple orthodontists, the approach has proven quite effective. While there’s no guarantee of new patients with each contest, in a field such as orthodontics a single new referral is worth quite a lot. And social media contests can greatly amplify exposure to new potential clients. In the case of Cosmopolitan Orthodontics, you can see the amplification effect as follows: 50 entries generated 100 shares, which yielded more than 1,500 clicks and 800 voters!

Comments

This is a great example of how a small independent business can tap into the power of social media to drive meaningful results. I’m certain that there are other service industries (that have historically relied on word of mouth or traditional channels such as Yellow Pages) that can utilize contests as a great entry into social media.

While any business with a high lifetime customer value can benefit from this type of promotion, you need to be prepared to potentially invest in running more than one before seeing that new business convert.

“Help Me Launch” Contest

This contest was geared to small business owners.

Objectives

Social Media Examiner’s own Mike Stelzner wanted to create awareness for the release of his book Launch.

How it Was Done

A contest was held on the book’s Facebook Page where people were asked to submit a photo with the words “Help Me Launch.” Entries were voted on by the public and then judged to select the winner. The grand prize was 3 hours of private consultation with the author.

The Facebook Page started with virtually no existing fan base (50 Likes), so building awareness for the contest required tapping into other channels. Social media was the primary means of promoting the contest, with regular Twitter messages to a base of approximately 70,000 followers across two accounts (80,000+ subscribers). The contest was also featured on the Social Media Examiner Facebook Page (40,000+ fans), in email newsletters and to an audience at a webinar event.

Results

Approximately 80 entries were received and these entries generated 4,475 voters. At the conclusion of the contest, the page had 1,300 Likes, an increase of 2600%! This provided a much larger fan base with which to share information and to begin an engaging dialogue about the principles outlined in the book.

Comments

I realize 80 entries may not sound like a large number to some of you, but bear in mind that this contest was targeted at a niche audience of small business owners and entrepreneurs rather than the mainstream consumer. Had Stelzner chosen to give away an iPad, he might have generated more entries, but might not have connected with the audience he wanted.

When setting up the contest, Stelzner was clear about his objectives (it wasn’t just about sheer numbers, but about reaching the right people). However, it’s worth noting that attention was paid to both driving entries and driving votes as it became clear that voters also represented a valuable group who were engaging with the page.

Hopefully these examples help frame a variety of ways that social media contests can generate ROI beyond what you may currently be considering.

What do you think? How do you measure ROI on your social media endeavors? What do you feel are the important metrics to track when it comes to contests and promotions? Leave your comments in the box below.

However, in a stricter sense, social media ROI is defined as a measure of the efficiency of a social media marketing campaign. This definition might sound complicated, but in reality, it’s quite simple.

What Does ROI Really Mean?

Let’s backtrack a bit.

We’ve all heard what “ROI” stands for, but what’s less understood is the actual meaning and the importance of ROI.

In the financial world, ROI is used to measure the financial efficiency of an investment. ROI is based on the financial formula:

ROI = (return – investment) / investment %.

Increase social media ROI.

This means that if you increase your return while keeping your investment the same, then you increase your ROI. This is good. If you decrease your return while keeping your investment the same, then the ROI goes down. That’s bad. A high ROI is better than a low ROI.

Because the ROI formula uses only two inputs – the return and the investment – the ROI formula is an easy way to measure and compare marketing campaigns. A marketing campaign with a high ROI is considered better and more efficient than a marketing campaign with a lower ROI.

It’s important to understand that ROI measures the efficiency of an investment because then you also understand that ROI cannot be defined using alternative definitions. “Return on inactivity” does not help you measure the efficiency of your campaign.

Social Media ROI Uses The Return And The Investment

Now, all we need is to take our social media return (the amount of value that we got from our social media campaign) and our social media investment (the amount of money that we invested in our social media campaign) and run it through the financial ROI formula.

Social media ROI = (SM return – SM investment) / SM investment %.

Simple, right? Not so fast. The social media investment is clearly defined, but how do you define the social media return and how do you attach a dollar value to the return? We need to answer both questions before we can calculate the social media ROI.

Social Media Return Is The Return On Your Social Media Goals

The peculiar feature of the social media return is that you can define it to be essentially anything you want it to be!

Brian Solis from the Altimeter Group puts it even more succinctly in his article ROI Doesn’t Stand for Return on Ignorance: “Everything starts with an end in mind.”

In reality, social media return is the value that you derive from your social media campaign. For instance, if the goal of your social media campaign is to drive sales, then your social media return is the number of sales that you can attribute to your social media campaign.

Instead of sales, say your goal is to drive consumer insights. In this case, your social media return is the quantity and quality of the consumer insights you get from your fans and followers.

A third example of social media return is brand awareness. If your goal is to drive awareness of your brand, then your social media return is brand awareness.

I could give many more examples, but the point is that social media return is the value that you derive from social media based on the goals of your campaign. (Note that the number of followers, fans, Likes and comments are not social media campaign goals.)

Quantifying Social Media Return

After we have defined our social media return, we need to quantify the social media return into dollars and cents. This is difficult because you need to look at each type of social media return and develop a method for dollar quantification.

For instance, looking strictly at sales, we can quantify the social media return by looking at “last touch” sales, or we can use sales forecasting techniques or use unique identifiers such as coupon codes.

Quantifying consumer insights is harder and requires different techniques to estimate value.

Hard estimation is critical.

One commonly used technique is to compare the quantity and quality of consumer insights from offline focus groups to consumer insights from your social media campaign.

The idea is that you know the value of consumer insights from offline focus groups based on their cost. By comparing the quantity and quality of consumer insights from both channels, you arrive at a reasonable estimate of the value of consumer insights from your social media campaign.

Brand awareness requires yet another method. In April 2010, social media analytics company Vitrue made quite a stir when they stated that according to their research, the average Facebook fan is estimated to be worth $3.60. Vitrue looked at the average number of messages each fan received and then compared this number to what it would cost to purchase impressions to send the same number of messages to each fan.

Use Social Media ROI To Compare Apples To Apples

After estimating your return and your investment, you use the ROI formula to calculate your social media ROI.

Remember, ROI is a measurement of efficiency, so having calculated the ROI of your social media campaign, you use the ROI number to compare to other social media campaigns and also your TV, print, radio and other campaigns.

ROI is possibly the most powerful tool in your marketing toolbox. This sentiment is demonstrated in Amy Porterfield’s post, Study Reveals Top 6 Social Media Goals for 2011, where she correctly points out that according to the Altimeter Group, 48.3% of all corporate social strategists will have social media ROI as their highest focus in 2011.

ROI is a very powerful weapon in your marketing arsenal.

What do you think? What methods do you use to measure social media ROI? Leave your comments in the box below.

All photos from iStockPhoto.

If you’re looking for a social media monitoring tool, you’ve probably noticed that it’s quickly becoming a confusing landscape. For those who are new to social media and looking for tools to manage their presence, it’s difficult to know how to compare one vendor to the next. Here’s the skinny on where Radian6 fits into the picture.

Where does Radian6 fit into the social media measurement landscape?

Radian6 helps brands ensure that no post is missed.

We offer unequalled coverage of the social web and provide metrics to measure what is being said, and by whom. —David Alston, CMO Radian6.

Primarily, Radian6 is a monitoring tool. It can help you monitor brand mentions across the social landscape and the new Engagement Console offers you an end-to-end presence management tool.

Radian6 Dashboards

For consideration: Think about how much “noise” you have in your space. In order for monitoring to be actionable you want to keep in mind that for industries and brands that are targets for spammers it can take a considerable amount of work to filter and find the “meaningful” conversations. I experienced this problem myself, as CareOne and the entire debt relief industry are hounded by spammers and it required intervention from Radian6 to get it in line.

Tip: Many people start by putting in keywords that are used in SEO and paid search. To narrow your results, sort them by comment count. Because comments indicate more engagement, it’s more likely that the conversations are meaningful. Look for other words that are used frequently with your keywords and add them as modifiers to narrow your results to conversations, rather than spam bots.

The Engagement Console is a real-time social web client—more complete than Twitter.

What are Radian6′s greatest strengths?

“Radian6 offers users comprehensive coverage of discussions on the social web, covering hundreds of millions of blogs, comments, the public Facebook API and the full Twitter firehose. In addition to this coverage, Radian6 is scalable within an enterprise, allowing online comments to be assigned within the business, to customer service, sales, marketing and so forth. Radian6 also integrates with other enterprise applications like Salesforce.com and analytics like Webtrends, Omniture and Google Analytics.” —David Alston

You can scour more than 150 million public sites and sources including blogs and comments, forums, mainstream online news publications, public photos and videos.

In the landscape of monitoring tools, while competitors are on the rise, Radian6 has had a very comfortable and secure position in the market. I think this is because of two things. First, they entered the market early and got popular social media bloggers to test them out and recommend them. Second, they quickly gained popularity among enterprise organizations with big brand names as being the go-to choice.

For consideration: Radian6 is a very comprehensive tool that gives you a one-stop shop for engaging on your social channels. The workflow aspect is a key consideration for enterprise-level organizations. However, for smaller businesses or teams with one or two people it may be overkill. Additionally, their pricing model can get expensive quickly for larger teams. It starts at $1k+ per month.

Tip: Take advantage of the free tools out there for a while. See what you like best about them and see what they’re lacking. Create a list of absolute must-haves and nice-to-haves. When you’re looking at different providers you can use this checklist to make sure they have what you need. Anything they’re offering that isn’t on your absolute must-have or nice-to-have lists will likely end up being an unused feature.

If Radian6 is integrated with Salesforce, Webtrends, Omniture and Google Analytics, can they provide ROI data?

The short answer is no. Based on the integration David described to me, there’s no way to follow the conversation back to the revenue. The integration was mostly done from a customer service perspective.

“For Salesforce, it’s designed in such a way that, for example, if you find a customer service issue in Radian6, you can link the record of what you find in Radian6 back to the customer record. In terms of Google Analytics, Webtrends or Omniture, you can create an XML report of the 10 terms that get captured in Webtrends that you want to import into Radian6. You can then overlay the Webtrend data on those keywords with the information inside Radian6 and do kind of a pivot to sort by items like time on site.” —David Alston

For consideration: The level of conversion tracking was described by Alston as items like lead forms that are set up as goals within your web tracking software. In my experience, this type of conversion data is nice but unless it was an online sale it doesn’t attach to revenue.

Tip: While Radian6 doesn’t provide ROI data within its interface, it doesn’t mean that you can’t get to it through other channels. You may need to work with a consultant who can help you quickly identify where to connect the pieces to get to revenue.

What are Radian6′s biggest weaknesses?

There are a several things that I think Radian6 could do better.

Up-front Effort for Workflow Features

From a workflow perspective, it’s great to be able to assign tasks and tags to posts; however, to be effective, you need to create a system of tagging up front or you’ll end up with a large clean-up effort later. It was a great improvement when they released the Engagement Console which allows you to write macros. This cuts down significantly on the number of clicks it takes to assign a post and tag it. But it does take a lot of forethought and setup to get that working well.

David acknowledges that this can be a challenge.

“Because the Engagement Console was designed to optimize usage in a team environment, it requires users to think through the tagging, classification and macro systems they would like to use in advance. This takes an investment to create (we call it a “playbook”), but it’s definitely worth it once it has been set up. The latest addition of administrative functionality in the Engagement Console means a single super-user can help pull this all together for the team, thus saving more time.”

Two Interfaces

As a user you’ll find that there are two interfaces for you to use. The Engagement Console is where you manage your social media channels, tag posts, assign them and so on. I liken it to your HootSuite or TweetDeck interface on steroids. This is what you’ll likely use every day. Then you have the Radian6 dashboard which aggregates all of your stats into pretty little charts and you can get data based on specific timeframes.

I found it awkward that the Radian6 dashboard is web-based and the Engagement Console is a desktop app. I would have preferred to have them both as web apps.

No Smart Phone App

For those who manage their presence on the go, there’s one big missing piece of the puzzle. You can’t use Radian6 on a smart phone because there is no app. I asked David about this and he said to “stay tuned” but I’ve been hearing that for over a year now so I’m becoming a little skeptical on their ability to make it happen in the short-term. If I were at Radian6, this would be my top priority. For users, it creates a disconnect from presence management and forces us to use other tools on our phones.

I’d rather look for all of my stats on my smart phone, and using the Engagement Console means I have to get reporting in two locations, which is not my preference.

Pricing

There are three fees. One is a per-seat license. The second is a per–topic profile fee. A topic profile is where you tell it what data you want to pull in. If you want to separate data, there is only so much you can do within one topic profile. An agency managing multiple clients would need at least one topic profile per client and it’s the most expensive item on the list. The third fee is based upon the volume of posts that come into your topic profile.

While the initial volume range that comes with your topic profile is reasonably high, you’d be surprised at how quickly you can exceed it. You can use keyword refinement to bring this down. These are all monthly fees that make up your core price. While I think Radian6 is certainly the Cadillac in the space and their price indicates that, it’s up to you to decide if it’s worth the money.

Summary

Radian6 is a great platform that’s equipped with a lot of bells and whistles. From my perspective, it was clear the company is dedicated to continual innovation of the tools. To decide if it’s right for you, you’ll need to look at your list of absolute must-have and nice-to-have features and see if buying the “whole farm” makes sense for your organization. My feeling is that for most one- or two-person operations it may be a little overkill and pricey, but for corporate marketing teams I think it’s a reasonable choice.

Read these posts for more on measuring social media and its impact on brand awareness, looking to track social media metrics and 5 ways to use social data to grow your business.

What do you think? Are you a Radian6 user? If so, what would you add to the list of strengths? How about weaknesses? Did you switch from Radian6 to another tool? If so, which one did you pick and why? Please join the conversation and leave a comment in the box below.

Since we started Social Media Examiner in October 2009, we’ve published more than 280 articles. These original posts were written by dozens of social media professionals.

We decided to tap their knowledge and expertise to see what’s likely coming next year. Here are their predictions for where social media is headed in the next 12 months.

#1: Marketers will have more tools to stimulate conversation.

Tom Martin

“Social Media will become Conversational Marketing and its practitioners will shift their focus more to ideas and technologies that can create or stimulate conversation versus simply focusing on the engagement in conversation. These technologies will be very data measurement–driven, like QR codes for instance. By making this shift, social media consultants will retain and improve their standing within the internal ROI-driven cultures of today’s companies.”

Tom Martin is founder of Converse Digital. He works with companies and ad agencies to help them monitor, create and engage in digital conversations to grow market share or increase customer loyalty.

#2: More companies will invest in social media.

Nicole Kelly

“As paid search traffic and conversion rates continue to decline and become more expensive, companies will start looking to social media to replace volume. Therefore, measuring the ROI of social media will become a top priority as companies consider expanding budgets and staff members for social media–related activities.”

Nicole Kelly is the director of social media for CareOne Debt Relief Services and is passionately working to understand and help define social media measurement.

#3: Social media will become mainstream.

Debbie Hemley

“In 2011, the social media dust will finally settle and folks will stop referring to it as ‘new’ media. Social media will take its rightful place on the editorial calendars and budgets of corporate marketing departments. The calls to action will reverberate virtually and within the brick-and-mortar planning rooms of corporate marketing departments. Those who hadn’t before will report reading online news, magazines and books; and watching more full-length and short videos on a myriad of screens and devices than they did in 2010. We will catch up with friends and colleagues as we leap from one geolocation to the next.”

Debbie Hemley is a blogger and nonfiction writer. She writes about social media, marketing and writing.

#4: Quora will leave beta and become a serious player in social networking.

Peter Wylie

“Quora is superior to any other question-and-answer platform in terms of quality, and it has fantastic technologists working on the product to help it scale.  Its experiment with setting up Twitter handles for every topic on the site using Mechanical Turk was genius, and it shows a clear strategic desire to integrate more closely with other social behavior.  Expect Quora to be brought up in conversation with Twitter, Facebook, LinkedIn and YouTube in 2011.”

Peter Wylie is lead researcher for Three Ships Media, an emerging media marketing company that specializes in using blogs and social networks to connect clients with target customers.

#5: People will demand more from social media.

Jason Falls

“Business will demand more business-driving proof, readers will demand more substance to blogs and those who are practitioners will have to demand excellence out of themselves. This will go a long way in cleaning up the industry, in my opinion. The ‘gurus’ will fade away while the practitioners excel. If you aren’t moving the needle, you’re done.”

Jason Falls is principal of Social Media Explorer, a social media marketing consulting firm based in Louisville, KY. He is the author of the popular industry blog SocialMediaExplorer.com.

#6: Social media will no longer be something the “cool kids” are doing.

Lewis Howes

“Social media is something all entrepreneurs and businesses have to do if they want to succeed going forward. In the last year, we’ve seen many start to jump in and experiment with various campaigns on Twitter, Facebook and geolocation networks. Going forward, we’ll continue to see more of that and I see mobile and social media meshing even more.  There will start to be actual numbers and statistics to back up what works and what doesn’t.  2011 will be an interesting year during which creativity will continue to thrive, yet social media will start to gain solid support with evidence that it does in fact work.”

Lewis Howes is the author of two books on the topic of LinkedIn and runs the largest resource of sports social media marketing content online.  Learn more at LewisHowes.com.

#7: Facebook will become a real ecommerce platform.

Tim Ware

“I predict Facebook will launch a Facebook-based ecommerce payment system so that users can truly complete the entire checkout process without leaving Facebook. No iFrames, no logging in to your Paypal account, etc. Look out, Paypal!”

Tim Ware is the owner of HyperArts Web Design, helping businesses build and promote their web presence. His focus these days is Facebook app development and Static FBML.

#8 Social communication skills will get better.

Linda Coles

“We will all get cleverer with how we communicate online and add a little etiquette as we realize we are not simply communicating with another computer, but a warm-blooded human. Networking and developing relationships online is no different than offline, so let’s stop treating it differently. The Internet has simply increased its scale.”

Linda Coles of Blue Banana is a sought-after speaker who also runs various workshops and seminars on how to use social media tools effectively and productively.

#9: Social media will expand through creativity, diversification and content.

Terry Lozoff

“Tumblr saw a decent amount of buzz in the business world during the latter part of 2010, but still has a relatively light presence in the corporate world. Following in the footsteps of brands like Huggies and news organizations like Newsweek and The New Yorker, more brands and content-based organizations will take a longer look at Tumblr in 2011, and how to engage with a new base of consumers through this channel, as well as others in the social periphery.”

Terry Lozoff is the president and CEO of Antler, an experiential and digital marketing agency based in Boston, MA.

#10: Internet noise will reach rock-concert levels.

Dino Dogan

“Three to four billion people are currently NOT online. However, given the growth and adoption patterns over the last 10 years, I wouldn’t be surprised if by the end of 2011, more than 4 billion people are using the Internet, effectively doubling the current Internet population. Where is this growth coming from? This new emerging market is coming from Africa, the Middle East and South America. In 2011, a new playing field will open up filled with people hungry for specificity, quality and education.”

Dino Dogan is a blogger, writer, motorcyclist, dog trainer, singer/songwriter and martial artist. He’s currently working on Human-Dog Problem Tree, a thesis in human-dog relationships. His home is at DIY Blogger.

#11: Social media will become targetable.

Jay Baer

“2011 will be the year of convergence and integration. We’ve been talking about ‘one-to-one marketing’ for 20 years, but in 2011 we’ll finally start to see it become a reality. We’ll start to be able to send an email only to customers who clicked a particular bit.ly link on Twitter. We’ll be able to send a Facebook status message only to customers who visited a particular page on our website. We’ll be able to meaningfully segment our social communication, and that will make social far more useful for companies and organizations of all sizes and levels of sophistication.”

Jay Baer is a hype-free, tequila-loving social media strategist, speaker and coach. He’s the author of Convince & Convert, one of the planet’s most popular social media blogs. And his latest book is The Now Revolution.

#12: Social media will become more cross-functional.

Jacob Morgan

“Social media will branch out from typically being owned by PR and/or marketing departments.  Social media itself will be seen as just a channel instead of a panacea for solving all organizational business problems.  Social media will also be looked at as more than just an external-facing communication channel; it will be perceived as an internal communication channel.  I think we will also see a broader movement toward ‘social customer’ strategy, which seeks to solve organizational business problems as they pertain to customers. This means integrating people, process and technology.”

Jacob Morgan is the principal of Chess Media Group, a social business consultancy focused on customer and employee engagement strategies, and authors a popular blog on Social CRM and Enterprise 2.0.

#13: Small businesses will stand a better chance of competing with the bigger names.

Ching Ya

“2011 will be the year where social media can be a game-changer for many sectors. Data on user experience and personalized sharing will be more emphasized than ever, but so will be the dispute about privacy and where the line should be drawn. Profile security will probably be another huge issue that requires a clear standard and resolution from the authority.”

Ching Ya is the author of Social @ Blogging Tracker. She provides Facebook customization service for small business.

#14: There will be a shakeout in second-tier social media platforms.

Rich Brooks

“This shakeout will leave Facebook, Twitter and LinkedIn as the only viable social media platforms for business. They will continue to steal ideas from each other to where their services overlap and they’ll all become a bit homogeneous, leaving an opportunity for a disruptive technology in 2012. In addition, prominent B-schools will start promoting their social media course loads, legitimizing social media for giant corporations. Finally, Justin Beiber will cause a massive overload of the social media networks, forcing us all to re-evaluate our priorities.”

Rich Brooks is president of Flyte New Media, a web design and Internet marketing company helping small businesses succeed with SEO, blogging, email marketing, social media and websites that sell.

#15: 2011 will be the breakout year for social search.

Jeff Korhan

“There will be less noise as marketers seek more personalized interaction with consumers.  Fresh and creative methods of social marketing that encourage engagement will become the norm—along with a noticeable decrease in traditional brand marketing.  This progressive use of social media for what it does best will generally result in business becoming profoundly social.”

Jeff Korhan is a professional speaker, consultant and columnist on new media and small business marketing. Read more on his website.

#16: Content marketing will drive social media forward.

Kristi Hines

“More businesses will continue to jump into social media, but instead of pushing sales pitches, they will be pushing content in the form of blogs, infographics, ebooks, whitepapers, free reports and much more.  Content development is growing in popularity, and social promotion—when done correctly—is the best way to make content marketing successful.  The only real issue with this will be if businesses go overboard pushing poor content in an attempt to try to get it to go viral.”

Kristi Hines is an Internet marketing specialist with Vertical Measures and author of Kikolani, a blog that focuses on social media and networking strategies for successful bloggers and businesses.

#17: Social media will have an ever-larger impact in the search engine rankings.

Jim Lodico

“In the same way that the search engines currently value incoming links as a way of giving credibility to a website, I think we will also see Facebook Likes, tweets and other forms of social media sharing working their way into the formula. From a publishing perspective, this isn’t a big change. High-quality, outstanding content is still key to an organic SEO campaign. Publishers (and who isn’t a publisher these days) need to create content that others will want to share and make it easy for them to do so with Facebook Like buttons, Tweet This buttons and other easy-to-use social media tools built right into the post. Visitors should be encouraged to share across social media channels, especially as this sharing starts to play a more important role in the search engine rankings.”

Jim Lodico is a copywriter and marketing consultant specializing in creating powerful content and teaching businesses how to use blogs.

#18: Curation tools will become the primary way people use social media.

Jamie Beckland

“I could tell you that all key metrics (like time spent, amount of content generated and influence) around social media will hit new records in 2011, but you already knew that, didn’t you? With hundreds or thousands of online connections, it’s impossible for people to keep track of all of the great content from their social network. In 2011, we will reach a tipping point, where there is no way to manage social media without a curation tool. From Facebook’s Top News to Cadmus to Google Reader, filtering and prioritization is already a thorny challenge. In 2011, it will become a crisis as the number of voices, and number of channels, continue to explode. Look for a new set of consumer-oriented tools to lead the way, as business tools for marketers lag.”

Jamie Beckland creates social and emerging media programs for White Horse, a digital marketing agency, and has built online communities since 2004.

#19: 2011 will be a year of listening, courage and enabling.

Ekaterina Walter

“More and more brands will realize the power of listening before engaging (and not the other way around). I anticipate more brands will have the courage to open up and truly and humanly participate, not just broadcast. Brands are also realizing how critical it is to fully enable their employees to become brand ambassadors, hence you see more brands creating internal university-like training around social media and putting Social Media Center of Excellence functions in place. This list is not exhaustive at all, but it demonstrates that more brands are going back to marketing basics and focusing on their objectives, their stories and on empowering internally rather than on technologies and platforms.”

Ekaterina Walter is a social media strategist at Intel. She is a part of Intel’s Social Media Center of Excellence and is responsible for social networking strategy and social media enablement. Read more on her website.

#20: Influence will be measured by follower and fan engagement.

Dr. Rachna Jain

“Social media will continue to evolve toward followership/fans as a measure of influence. Not numbers for numbers’ sake, but instead, how many people can you activate to your cause or belief? It will be less about growing a huge fan base, and moving more toward growing an interactive and engaged fan base. Whoever drives the most engagement wins.”

Dr. Rachna Jain is a psychologist by training and a social marketer by preference. She writes about the interconnections of neuroscience, psychology and social media.

#21: Personal authenticity will become increasingly important.

Stephanie Sammons

“Business owners and professionals will cultivate personal authenticity to rise above the increased noise, earn the respect of their target markets and ultimately generate new business.  Outsourcing social media activity or utilizing shortcuts to automate blogging and social media participation will not be effective for building community and developing new business relationships within the social world.  My best advice?  Be yourself, develop a strategy and establish a system for managing all your efforts.  Remember, marketing is a commitment!”

Stephanie Sammons is the voice behind Smart Social Pro, a resource for professional practitioners to help them understand how to leverage the power of social media and blogging in their practices.

#22: Brands will use more one-on-one communication on social media.

Lori Randall

“Social Media is still a novelty to many. Brands that beam content via social media like a TV commercial enjoy some success just because it’s new.  I see a huge shift in coming in 2011. I predict that mass media approaches will continue to run riot, but that mainstream people will develop a clear-eyed view on this murky subject and seek out unaffected, one-on-one communication that meets their desire to be heard, understood and helped concerning what matters to them most.  Scripted answers from an outsourced ‘Social Media Department’ won’t do. This dynamic will cause brands that communicate like normal people (instead of infomercials) to rise above the babble and get noticed because they will be so rare.”

Lori Randall is an online marketing strategist specializing in social media and WordPress sites. She often asks, “What truth about your brand makes your heart pound? Then work it!”

#23: The social media industry will “reboot.”

Elijah Young

“Brands that have hired outside consultants to handle social campaigns will start to look for more than friends/followers/fans as a metric of success, and start looking at the bottom line of their business.  Expect many fly-by-night specialists and consultants to see much of their client base dwindle due to a lack of tangible business results from their campaigns.  Expect the entire industry to start to mature, possibly with some industry-wide metrics and standards being adopted by the most forward-thinking of the bunch.”

Elijah Young is the lead strategist and owner of Social Talk Live. He’s also a business strategist who helps existing and new companies promote and grow their business.

#24: Expect to see more traction, innovation and spending in group buying in 2011.

Christine Gallagher

“I believe we’ve only just begun to scratch the surface in the group buying space. Services like Groupon, Living Social and BuyWithMe will continue to grow, spawn competitors and change the way businesses offer—and customers reap—the benefits of discount deals.”

Christine Gallagher is a relationship marketing speaker, trainer and coach. Christine helps small business owners maximize their profits using social media and online marketing techniques.

#25: In 2011, we’ll see a further divide between Twitter and Facebook.

Bill Seaver

“Facebook will continue to grow and broaden both how many people use it and what people do with it (i.e., Facebook email), whereas we’ll see Twitter narrow in use and appeal. People who continue using Twitter in 2011 will have a reason for being there beyond connecting with long-lost classmates and sharing photos of their weekend activities. They will overwhelmingly have business reasons for staying connected on Twitter. As such, Twitter will become a platform where you can connect with some people in their professional lives, and Facebook will continue to be the platform where you can connect with most people in their personal lives.”

Bill Seaver is the founder of MicroExplosion Media, a social media marketing consulting firm based in Nashville. He’s an active blogger and podcaster.

#26: Social media marketers will get the value—and necessity—of relying on direct-response tactics.

Tia Dobi

“In 2009, I made $40,000 from one tweet, thanks to my skill in evoking ROI learned from teachers like Claude Hopkins, John Caples and David Ogilvy. Direct-response know-how will separate the men from the boys in 2011… exploding opportunities that apps such as Facebook Places, Facebook Ads and Amazon Facebook Connect Campaign afford us by making point-of-purchase available everywhere, all the time. For the savvy marketer with the right thinking—and writing—2011 is the year of profits beyond belief.”

Tia Dobi is a former TV producer, direct-response marketing consultant and author of the upcoming book Copywriting for Twitter Impact.

#27: Social media measurements will become visual.

Nick Shin

“According to many who participate in my weekly #smmeasure Twitter chat on Thursdays (with co-host Sheldon Levine of Sysomos), metrics such as the number of followers/fans are highly irrelevant. However in 2011, social media measurement will focus on why basic metrics such as the one described are very much relevant. As social media strategists explain the measurement aspect, the shift from data tables to visual statements will begin. Rather than Excel sheets, expect PowerPoint presentations to visually tell the success of one’s social media strategy.”

Nick Shin is an online marketing strategist specializing in SEM, social media and PPC. When he isn’t collaborating or consulting on marketing strategies, you can find him on the tennis court.

#28: Deals, specials and discounts will flourish inside of Facebook pages.

Amy Porterfield

“Facebook pages are quickly becoming the exclusive promo hubs; the place where businesses can offer exclusive discounts and specials to warm audiences on a consistent basis. And the best thing about Facebook promos is that they can spread virally inside Facebook and beyond quickly, cheaply and with few barriers. With the continuing sophistication and flexibility of Facebook pages, I predict we will see a huge rise of promo hubs inside Facebook and businesses will continue to create even more opportunities to gain greater visibility for themselves while offering enticing opportunities via great deals to their customers.”

Amy Porterfield is a social media strategy consultant. Her passion is helping companies, authors and speakers create raving fans using social media and online marketing.

#29: More collaboration between social media players.

Nathan Hangen

“In 2011, I fully expect location-based services such as Gowalla and Foursquare to be enveloped by Facebook Places, perhaps being relegated to ancillary roles as clients, rather than providers. I really believe that this is the only way the check-in model can reach mass adoption. As part of this evolution, Groupon and Facebook will strike a partnership in order to integrate Groupon’s service into Facebook deals in some way, shape or form. I wouldn’t be surprised if Zynga joined in on the action and added a game layer on top of these services, putting SCVNGR’s business model at risk.”

Nathan Hangen is an Internet marketing strategist and founder of Webrepreneur Media. He co-authored the book Beyond Blogging with Mike Cliffe-Jones and provides small business consulting services at Making it Social.

#30: Facebook will welcome its one billionth member to massive worldwide fanfare.

Mari Smith

“I predict that the Check-in button will become just as, if not more, popular as the Like button via sites and apps such as GetGlue.com and Clicker.com, where you let your friends know what entertainment you’re watching right now. I also predict some form of Check-in button will roll out for websites because it can be clicked each time a reader visits a website, versus the Like button’s one-time click.”

Mari Smith is a social media speaker, trainer, thought leader and co-author of Facebook Marketing: An Hour a Day.

More Social Media Success Stories in 2011

And I’m sure we’ll have many more social media success stories to share with you here on Social Media Examiner throughout 2011.

Would you like to stay in touch with Social Media Examiner’s writers? Follow our “Social Media Examiner Writer” list on Twitter.

What do you think? What are your social media predictions for 2011? Please leave your comments and join in the conversation below.

Are you struggling to find measurements that are meaningful to your organization? Do you feel like you’re searching for a needle in a haystack of metrics?

Here are 8 useful metrics that you may not be measuring, but should be.

#1: Conversion Rates

Everyone wants to measure the volume of leads generated to get to the bottom-line ROI of social media efforts. But don’t forget about the value of the conversion rate! While the volume may not be there yet, the propensity to convert may be staring you right in the face.

You’ll need to have a mechanism in place to know when a lead comes from social media. Most people use the combination of a URL shortener and some form of a “cookie” to attach a campaign to a lead. Hootsuite has integrated Google Analytics into their URL shortener for a seamless transition to success metrics in analytics, while some companies are using proprietary shorteners and others are still trying to figure out how to do it.

One of the most important steps in understanding where your lead came from is to know when someone clicks on a social media link and then converts. The most reliable way to do this is to place a “cookie” on the user’s machine with the campaign name for the social media channel that generated the click. Then use your campaign reporting to track the number of leads and conversions you’ve generated.

The number will likely be fairly low in the beginning but by looking at conversions divided by leads, you can get your conversion rate for social media leads. Compare this against other marketing channels to see if it’s higher or lower.

# 2: The Control Group

Some of the greatest metrics I’ve brought forward in my company really didn’t look that impressive when I first got them. The volume of leads generated was pretty low when compared to our other marketing channels.

However, when I compared them against a group of people that had not interacted with social media, I found some amazing stats that not only got my executive team excited about social media, it also showed that social media has a huge impact on our ability to convert leads. This certainly makes it easier to justify budget dollars to integrate social media into the sales process.

To add a control group, run the same metrics you normally run against a group that has never interacted with social media and compare them. Look for how social media compares in areas like lead conversion rates, retention rates and costs.

CareOne has seen that social media involvement in the sales process has greatly improved the rate of those who sign up for a debt relief plan and the propensity for those new customers to make their first payment.

#3: Growth Rate

While you’re building volume, measure the growth rate over time. Being able to show that volume is growing at a healthy rate helps prove that your efforts are generating an impact. The reality is that it takes time to build a sustainable social media channel; thus, setting proper expectations is very important.

#4: Marketing Campaign History

It’s really important to look at how your company reports on “cookies” related to a sale. After doing some digging, I found that my company was attributing the credit for the sale to the campaign that was the first cookie the prospect had received. We can now report on the originating campaign, the campaigns responded to in between, and the converting campaign.

This helps us know all of the drivers to the sale and appropriately adjust costs related to the sale to get closer to a true ROI as well as look for that magic mix. Even if your sales process isn’t online, you need to make sure your CRM system allows for tracking to marketing efforts through the entire sales cycle and your teams are appropriately trained to track it.

#5 Customer Acquisition Costs

Everyone is touting how “cheap” social media is, though many of us have realized that is somewhat of a fallacy. However, it is cheaper than many other traditional channels, so measure the full campaign history (as stated in #2) and then assign the cost per conversion and compare it against your control group.

Here are two examples of how this can happen:

• A person clicks on a link in one of your tweets and goes to your site and converts into a new customer.
• A person clicks on a paid advertisement on Google and doesn’t convert. Then later clicks on a link in one of your tweets and goes to your site and converts to a new customer.

Depending on your business model and typical advertising expense, in the first example, the cost to generate that customer could be less than a standard customer who comes through paid advertising.

In the second example, the cost will be higher than the standard customer who comes only through paid advertising, BUT even if it’s slightly higher for those who responded to more than one channel for lead generation, the incremental cost of social media will likely be less than trying to replace the unconverted lead with a new one.

#6: Retention Rates

Right behind the ability to convert a customer is the ability to keep a customer. Compare the inclination of new customers to stay customers with and without social media interaction. The theory is that those participating in social media are more engaged and likely retain better.

In order to do this you’ll need to keep all the leads converted in #1 and track them over time. If you have an ongoing fee, measure how long they stay a customer. If you’re more of a onetime sell, measure if they come back and buy something else and how often they do. Then compare this against the control group of those who didn’t interact with social media and see if there are any improvements worth noting.

#7: Customer Saves

Many teams are using social media to help customers online and this often includes managing complaints. Measure how many times your team saves a customer from cancelling, switching or returning your product/service.

#8: Cross-Sells

Are social media customers more or less likely to buy additional services? How much revenue per customer was generated from social media compared to non-social media customers? How much revenue was generated from additional purchases and/or add-on products for social media customers? Compare this to your control group and you’ll be able to tell if social media has an impact on up-selling or cross-selling.

This is certainly not a complete list of metrics, but it gives an overview of some of the most commonly missed measurements that contribute to showing social media’s value to your organization and/or clients.

What would you add to the list? Please let us know what you think in the comments box below.

Related Articles:

• How to Measure Social Media’s Impact on Customer Retention
• How to Measure Social Media Return on Investment for the Complex Sale
• 4 Ways to Measure Social Media and Its Impact on your Brand
• How to Measure Social Media Marketing Performance

Photo source: Flickr

One of the reasons measuring the return on investment (ROI) of social media has sparked so many discussions is because it’s not easy. The main barrier to end-to-end measurement is the lack of a true social customer relationship management (CRM) solution.

While Salesforce and others are working hard to bring a full solution to market, many marketers are simply cobbling together data they receive from web tracking solutions and social monitoring solutions.

Unfortunately, this will only give you pieces of the story. Those with proprietary CRM systems will have the toughest hurdle, which is a challenge I have personally faced.  In the short-term, the only hope is to integrate tracking cookies on your site and work with a development team to integrate with your CRM.

However, you can build an effective measurement strategy if you take a holistic view to social media lead generation. Here are four tips to make sure you are measuring the full impact of social media on your bottom line.

#1: Define Your Inputs for Lead Generation

In order for any type of measurement strategy to be effective, it’s critical to determine which key factors should be included. From a lead generation standpoint, there are two key lead generation inputs.

• Indirect and Direct Response Conversion Points—These may be different based on your business model, but generally speaking, you would want to measure those who filled out your lead forms. These would then be given a lead score that defines the prospects’ interest level. Then you would break these scores into meaningful ranges and measure your social prospects within each range. Specifically look for the number of leads and the growth rate in each range.

• New Business Campaign History—This is likely one of the most undercounted areas where social media plays a large role. Look at all of your new business for the month against the campaign history that has been reported in your cookies. How many times was social media an “assist” at any point in the campaign history leading up to the sale? How many times was social media the direct “conversion point” for the sale? How many times was social media the “originating lead source” for the prospect? Are these numbers growing at a healthy rate? If not, where do you need to adjust your strategy? Define a dollar value for different points in your lead cycle, define the costs for those efforts including the staff time required to execute and see where social media is showing the most impact for ROI.

Add the social media "assist" to your ROI reporting.

#2: Use Lead Scoring to Place Leads Into the Proper Place in the Sales Funnel

When marketers talk about measuring the ROI of social media, many consider it a very cut-and-dried discussion. Either social media is delivering profit to the company or it isn’t.

While I agree with the premise, I also recommend that you take a step back before you make decisions based solely on numbers.

We discussed using lead scoring to define where customers are in the buying cycle. While there are likely very lengthy formulas for lead scoring that companies are using, I’ve found the best approach is the K.I.S.S. (keep it simple, stupid) philosophy. Break your leads into three distinct pools of prospects. Define timeframes for conversion based on your business and the standard buying cycle.

• Slow—These prospects are likely in the pre-research/awareness phase. They find what you say interesting and they want to follow it, but they aren’t looking for a solution right now. You want to stay top of mind with these prospects for when they are ready to buy, but you don’t want to invest a lot of time from your sales force. This is a great opportunity to send these leads your relevant FREE content at some regular interval that isn’t annoying, but enough that you don’t fall off the radar.

• Medium—These prospects are in the research/consideration phase. They are looking at products to be considered as a solution. You want to find the tipping point for these prospects to move them into the next stage in the funnel. It is likely that most of your marketing dollars get spent converting these prospects.

• Fast—These prospects are in the decision-making/buy phase. They want a solution and they have a clear time frame for when they need it. It is likely that most of your sales team spends their time actively working these prospects. Generally, marketing takes a back seat on special marketing offers in order to not “delay” the sale.

Integrating lead scoring into your sales funnel.

This gives you a framework for what you want to measure along the way. For it to be a true measure of ROI, you have to compare the cost of social media efforts against the revenue brought in for each point in the campaign history and the cost associated with converting each range of lead scores.

#3: Understand Where Social Media Efforts End and Sales Efforts Begin

Why are these different points in the buying cycle important to social media measurement? Because social media is just another lead generator. Once the lead comes in, your normal sales process takes over. That process may include marketing efforts and sales team efforts.

However, if you are reaching prospects at the pre-research/awareness phase with social media and you do not have marketing programs or sales processes to support it, you may cut bait on the only marketing effort that is touching this group. A hard-sell approach with slow prospects risks losing their business forever. Before you write off social media as not delivering the ROI you anticipated, make sure to review your sales and marketing efforts.

If you don’t have an awareness program as part of your strategy, it could be the reason you aren’t converting these leads. Evaluate social media for the value it really brings to the table and make sure you don’t overlook some of the areas where social media is already delivering ROI to your company.

#4: Ask Yourself Where You Need to Optimize Your Social Media Lead Generation Efforts

Here are some key questions to ask when evaluating your social media efforts:

• Is there a bottleneck in your lead funnel? Review where leads are getting caught and reevaluate your approach.
• Are you able to convert leads at the same or lower costs than other channels with social media?
• Do you need to stop any activities that are causing leads to fall out of the sales funnel?
• Are you reaching people at points in the buying cycle when other channels can’t?
• Are you placing more people into the sales funnel at a lower cost? At what rate is it growing?
• Have you aligned your sales process with leads that aren’t ready to buy today?

This post is just a starting point for discussions around ROI measurement. There are many variables specific to each company that make it difficult for generalizations to provide a solution.

Related Posts:

• 4 Ways to Measure Social Media and its Impact on Your Brand
• Is Social Media Marketing Measurable? The Big Debate
• How to Measure Social Media Marketing Performance

What are your thoughts? How are you measuring? Are you measuring the social “assist” in your organization? Do you have marketing messaging, marketing campaigns and sales processes that cater to the research/awareness phase?

Whether you use social media to market your business, increase sales, promote your blog, or raise awareness for a non-profit organization, here are six reasons social media might not be working for you—along with ways to overcome these problems.

Mistake #1: You Have the Wrong Connections

Imagine that you are asked to do a seminar about the future of Microsoft Office (with the opportunity to sell some Microsoft training courses).  You’re provided two options. You can have a large auditorium full of over 10,000 people or a smaller one with only about 500 people. Assuming you have no fear of public speaking, you probably want the large auditorium because it would hold a huge amount of sales opportunities, right?

But what if you learned that the large auditorium is full of users who are mostly students and artists, and the smaller one is full of business owners who depend on Microsoft Office. Now where do you see the greatest amount of sales opportunities?

This happens a lot in social media. We connect with tons of people on particular networks, get super-excited when we get a huge number of friends and followers, send out an announcement, and wonder why there is very little response. It’s not the number of people you are connected to that makes the difference, but the number of people interested in your niche that you are connected to.

Whenever you are seeking new connections on social networking sites, make sure to look for relevant connections in your niche or industry. There are many ways to find people who will be interested in what you have to say, including:

• Use Twitter directories, such as Twellow, that search for members based on their profile description so you can boost your Twitter following with targeted followers.
• Look at followers of another person in your industry to find some who would also be interested in you.
• Join groups on Facebook and LinkedIn.  Then participate and connect with other members.
• Find blogs on related topics. (Bloggers usually share their social profile links in their sidebar, header, footer, or about/contact pages.)
• Join forums on related topics—look for threads that allow members to share their social networking profiles with the rest of the forum. While participating, also look for members’ social links in their forum signatures.

There are also some don’t-miss guides here on Social Media Examiner, including how to increase your Facebook fan base.

Mistake #2: You Hide Your Social Media Presence

OK, so you might not think you’re hiding your social media presence, but you may be inadvertently doing so by not publicizing it. Simple ways to promote your social networking profiles include:

Social Links on Your Website

The first and most important place you should have your social media links displayed is on your website. Everyone who is active on social media, from corporations to freelancers to bloggers, should make it easy for visitors to their website to connect with them on their top social networking profiles.

American Express website header including Twitter and Facebook icons.

Toyota Sienna website header including Facebook and YouTube icons.

DawgHouse Design Studio footer including Facebook, LinkedIn, and other social icons.

Social Links in Your Emails

Chances are, you already have lots of people you email on a regular basis, either directly or through mailing lists. Why not add your social profile links to these emails and let recipients know where they can find you online? This can be done with simple text links below your signature, or with plugins such as WiseStamp, which will allow you to design a beautiful signature with social media icons, links, and even a link to your latest blog post powered by RSS.

Email signature created with WiseStamp.

Social Links on Your Business Cards

On your business card, you include (or at least you should include) your website address, email, and phone number as ways for your contacts to connect with you. Why not also add your LinkedIn, Twitter, or other professional profiles as well?

Creative integration of Twitter and Facebook profile links on a business card. Image by Ajda Gregorčič.

Forum Signatures

Do you actively participate in a forum for your area of expertise? As mentioned earlier, why not include your main social networking profile links along with your website in your forum signature? This way, if someone reads your response to a particular thread and finds it informative, they may connect with you on social media to learn more from you.

Mistake #3: You Send the Wrong Message

Let’s say I’ve just found your portfolio online while searching for a web designer, and I want to hop over to your Twitter profile to learn a bit more about you. So I visit your Twitter profile to follow you, and out of your latest 20 updates, I see the following:

• 5 updates from Foursquare that you are at Starbucks, work, McDonald’s, the courthouse, and L.A. Fitness.
• 7 replies to other Twitter members, obviously in the middle of a random conversation.
• 2 updates with some form of crude, foul language.
• 3 Twitpics of the last dessert you had, the weather outside, and a funny sign on a street corner.

Now if this was someone’s personal Twitter profile set up to connect with friends and family, these kinds of updates would be perfectly acceptable. But if you’re linking your Twitter profile with your business or blog on a specific subject, then your updates should stick to the same topic lines of your website, as people who are going from one to the other will likely be doing so to learn more about you in relation to the theme of those sites.

So taking the above example again, this freelancer could go with:

• 5 updates from FourSquare relating to a purchase for their work; for instance, you are at Best Buy buying a drawing tablet to use for a Photoshop design layout.
• 7 replies to other Twitter members answering questions about web design or giving helpful tips.
• 2 updates that relate to the industry in a humorous light, like a link to an Oatmeal comic on How a Web Design Goes Straight to Hell.
• 3 Twitpics of your workstation, your library collection of web design books, and your newest business card.

How do you find people to reply to about your industry?

HootSuite allows you to set up multiple columns for keyword searches and Twitter lists so you can always see what is being talked about and be able to give a timely reply.

Also, think of the search engine optimization value that can be gained from having keywords in your updates on your social media profiles. Having updates with web design–related keywords certainly won’t hurt your profile, especially now that social search is becoming more prevalent in Google search results.

Google search results for web design include social circle connections on Twitter.

Mistake #4: You use Social Media Profiles for Link-building

It’s one thing to create social media profiles on sites that are relevant to your industry and that you want to use. But it’s a whole other thing to create them just to get a backlink to your website with no intention of going any further. There are better and more effective methods of link-building and other strategies to increase your Google ranking.

Some services out there will reserve your name on social media sites, which can be good for branding and reputation management. You certainly don’t want someone to sign up pretending to be you on a network. But you can’t assume that once you have over 100 social media accounts, they will automatically start benefiting you. You have to go out and use them by getting social before you see any results from social media.

Mistake #5: You Only Do Things that Can be Measured for Return on Investment

Ah, the elusive ROI. Some say it is a myth. Some say social media marketing can be measured, some say that it shouldn’t be measured, and some say it cannot be measured.

No matter where you sit on the fence of ROI, one thing you have to remember is that the best things you can do for your business on social media will not necessarily create a measurable impact on your bottom line.

Sure, you can spend all day on your social media profiles and only send out coupons with specific tracking codes or leading to landing pages that will tell you which profile is bringing you the most conversions. But then you will miss out on valuable ways of communicating with your fans, such as providing good customer service, managing crises, and otherwise engaging with them to create more loyalty to your brand.

Mistake #6: You Follow Too Many “Rules” of Social Media

There are many experts who suggest that you follow specific guidelines in how you use social media. While there are some things that should not be done (such as running a constant stream of advertising), there are some social media rules that may not apply to followers in your niche or industry.

The best way to see what works is to follow those who are successful utilizing social media specializing in the same subject area as you and analyze what they do. Do they reply to their followers/fans often? Do they share blog posts? Do they share industry news? How do they personalize their profiles, backgrounds, etc.?

How do you know if someone is successful in social media? It’s not the number of followers they have, but the amount of interactivity they have with them. If you do a Twitter search for @theirusername and see lots of conversation directed at them or retweets of their updates, then that’s a sign they are successfully influencing their followers. If on Facebook you see that their wall posts get a lot of comments, that is another sign of their success in engaging with their followers.

Is Social Media Working for You?

Do you believe social media is working for you? What do you think can help improve the success rate of individuals or businesses using social media in terms of creating a better overall social media presence?  Please share your thoughts in the comment box below…

Early efforts in social media marketing have created a tremendous amount of buzz and interest, but surprisingly few case studies focus on monetization.

A recent study by Ketchum and Nielsen shows the number-one activity of social media users (online or offline) is reading blogs – even above TV!

So it’s clear that social media is here to stay, and accountable programs must be created to deliver performance and ROI. Here are 3 steps to help you get started:

#1: Define Key Performance Indicators (KPIs) and Measure Against Them

In order to hold any marketing channel accountable, there first must be a framework of metrics that can be tracked, compared to a benchmark (industry or prior program performance) and analyzed over time.  Social channels are no different.  When looking to assign accountability to social programs, the first step is to define KPIs and measure against them.  The three key components to track are:

Expanded Reach to New Audiences

Reach refers to the additional impressions that social channels provide to a program.  Reach addresses the first value of social media marketing: tapping into the power of the social web to engage previously unreachable prospects to your brand message.  In addition, reach through social channels increases a brand’s credibility as new consumers touched by social programs are being introduced by their peers or other respected “voices” on the social web. For example, the impact of a consumer seeing a friend recommend a brand as a result of a social program is much greater than seeing a static ad from the brand.

Influencer Sharing Behavior

Influencers (a.k.a. customers advocating for your brand) are essential to maximizing the viral impact of your social media programs. In order to leverage them properly, you need to determine the level of engagement between an influencer and the members of their social graph.

All influencers are not created equal. Some are exceptional at sharing a message but offer little in the way of engagement with their peers. Others generate little groundswell or buzz, but the peers they do touch take their advice.  Understanding who your influencers are within your customer base and tracking their sharing behavior are critical to optimizing program performance.

With the rise of social media, consumers are increasingly relying on user-generated content for purchase decisions.

Conversions and Monetization

Every social program must be associated with a call to action. Subscriptions to email lists, product purchases, signing up as a Facebook fan or downloading a free trial are all examples of calls to action.  In order to measure monetary contribution to business goals, the marketer must assign value to the social program’s call to action and then track the conversions.  Too often, social purists take a passive approach to program execution. The call to action need not be a sale. In fact, it could be motivating users to generate content to be added to a brand’s online community.  The point here is that a defensible value for the action must be defined and tracked.

The combination of these three KPIs (reach, sharing behavior and monetization) provides clear program success criteria and can be weighted based on a program’s objectives.  In the case of an awareness campaign, a marketer may place more weight on reach and sharing activity.  In the case of a direct response program, the opposite weighting could be applied.

#2: Create Predictable Results With Targeting

When looking at potential advocates to share a brand message on the social web, the number of friends one has on Facebook or the number of followers one has on Twitter is important, but it’s not the most important factor.  The real key to driving a predictable program is targeting.

Too often, social media programs start on the social web (where customer-specific data is scarce) and not within the CRM databases that companies have developed to provide deeper insight into their customers.   Accountable marketing programs need to be predictable, and predictability can only be driven on the social web once a brand identifies its most engaged customers and who among those are willing to advocate on its behalf.

Consider the current crisis faced by Toyota and how targeting could help drive advocacy, while a lack of targeting could be a disaster!  I am a lifelong, loyal Toyota owner.  I had my first Camry in 1996 and leased my second Camry in 1998.  In the meantime, my wife purchased a Toyota 4Runner in 1999 and another three years later.

We followed these vehicles with a Sienna Minivan, a brief stint with a certified pre-owned Lexus and finally my 2007 Camry.  I have owned no fewer than 6 Toyota vehicles in the last decade.  I love these cars; I stand ready to defend them.

As I mentioned before, marketers need to understand that all customers are not created equal on the social web, and the number of fans and followers the brand has is not the critical data point. It’s how customers feel about the brand and the relative propensity they have to share POSITIVE sentiment with their social graph.  Under the current system without proper social media targeting, Toyota is likely to ask my neighbor to advocate for the brand, who bought his first Camry last year and would love a reason to share his negative sentiment with his over 2,600 followers on Twitter and 700 friends on Facebook.

#3: Foster Viral Sharing With Incentives

Social media purists – take a deep breath before reading on.  Social media marketing is subject to the same rules and limitations as other marketing programs.  Specifically, there’s no way social media can become an accountable channel if it’s reliant on “lighting in a bottle” –type programs.  Viral activity from a set of advocates needs to be predictable. Equally important, marketers must be able to influence the social participation in their programs.  Incentivized sharing provides this level of predictability as well as an opportunity to throttle activity.

Rewarding customers for behavior, once again, is not a new concept.  Airlines, hotels, financial institutions and even coffee shops consistently reward customers for loyal patronage.  Why not apply that same logic to advocacy on the social web?  Marketers need to build bi-directional incentives into social programs. This means they reward the influencer for inviting friends to participate in a brand’s program and then reward the influencer’s friends for acting on the viral invitation.

In other words, both the brand advocate and the advocate’s friend are treated like VIPs for engaging with the brand via the social web.  Programs that include these bi-directional incentives perform two times better than those that rely solely on altruistic motivation for sharing activity. As long as marketers are transparent about the incentivized offers, the integrity of the channel is maintained while the marketer can access a dial to turn KPIs like reach, sharing behavior and monetization up or down.

There’s been real innovation in the last year around social media marketing and many leading brands have taken advantage of the wave.  In order for it to continue, marketers must introduce a program-level discipline to their social marketing efforts. The concepts above are a great place to start. Define KPIs and track at the individual and program level over time, target social programs at your most engaged customers and introduce incentives for social sharing activity.

What are your thoughts? Is your organization holding social media marketing accountable, and if so, how? Please comment in the box below.

Health issues forced Wendy to re-evaluate her pursuit of fame. And when she focused on paying the bills these activities were the first things she dropped.

Wendy also gives some great information for both businesses and bloggers concerning the U.S. Federal Trade Commission’s ruling on blogging financial disclosures.  Listen to hear the whole story.

Here’s what you’ll learn about the pursuit of fame:

• Fame does not pay the bills
• Being on the front page of Digg does not bring you success
• It takes lots of work to get internet fame and even more work to maintain the internet fame

You will also pick up some interesting things about how the FTC ruling impacts both businesses and bloggers alike and what this means to them.

And Wendy also talks about selling her first network Spark Plugging, how she got on the first page of Digg with a kids post and her new website Woo! jr.

Now, over to you. What do you think about the pursuit of internet fame? Do you think it’s worth the investment? What are your thoughts about the FTC ruling?

Please share your thoughts in the comments below.