Wouldn’t it be nice to have a framework for measuring the impact of your social media efforts?

That’s where Susan Etlinger’s new research for the Altimeter Group comes into play. Susan did qualitative research with 60 social media marketers and vendors to understand how businesses currently measure their social media performance.

Her goal: to develop a framework for tying social media performance to business goals.

NOTE: Because Susan’s original research targeted enterprise-level companies, I interviewed her to add some small business insights. The following comments combine results of the research and that interview.

Start with your strategic goals

Business owners who see great social media success tie their technology choices to their strategic goals. The following graphic shows the importance of a thoughtful process when designing your social media plan.

Make sure to start with your business goals when choosing your tools and measures.

Etlinger advises all businesses follow this process, but particularly small businesses that have limited resources and less tolerance for missteps.

Spend ample time thinking through your vision of success so you can select the right metrics. This means getting specific about your business objectives and strategies before thinking through social objectives. Then you can organize your staff (or your personal time if you’re a solopreneur) around those metrics. Only then are you ready to select the best technologies (including which social platforms and measurement tools to use).

Once you’ve established your goals, then you’re ready to consider Altimeter’s Social Media Measurement Compass. The points of this compass identify six major business goals that social media can help influence.

Your challenge: determine your goal and then think deeply about how you will measure whether you’re achieving that goal.

These six categories will help you think through the business objectives of your measurements.

The Six Points of the Compass

#1: Brand Health

Do you know how people are talking about your service, your products or customer experience? Big brands spend lots of money managing their brand image, but small businesses also need to be aware of customers’ perceptions.

How are people talking about your service, products and selections?

Etlinger noted that people have no problem complaining directly to big brands, but might feel more reserved about criticizing a small business owner to his or her face.

Social media monitoring can help you hear what people are telling their friends, but might not be willing to tell you directly.

Beware that you can never hear the whole social media conversation about your brand. There are at least two reasons: 1) Twitter is capturing such large volumes that you can only hear about 5% of the conversation; 2) Privacy settings on Facebook prohibit non-friends from hearing many conversations.

These two factors make it critical to find ways to validate what people are saying. Small business owners may find it challenging to hear critiques, but put on your tough skin and ask some customers (in person and online).

To unveil how social media listening can help you understand your brand health, Etlinger’s research discovered the following themes (in the graphic below) as critical for your social media listening.

Notice the insights to be gained and how to measure your listening results to find these indicators of health. (I will not reproduce each matrix for the following measures, but you can see them in her article here.)

Allow these questions and thoughts to force you deeper into your measurement practices.

#2: Marketing Optimization

Social media listening can help you fine-tune your marketing efforts to better find your target audience. For many businesses, Google Analytics might be the best tool.

Your goal is to determine what terms people are searching and from what sites they are coming to your site. Some of the things to optimize are campaigns, content, channels, timing and influencers.

It’s important to realize that people share differently on different social channels. While not strictly a social media platform, Yelp provides a good example. People wanting to position themselves as food critics are likely to be far more critical on Yelp than they might be on Twitter or Facebook.

#3: Revenue Generation

This measure may be less relevant if you don’t have an online store; however, all businesses want to know if social media is driving sales.

Generally, social media shouldn’t be expected to directly lead to increased sales. Instead, it can generate leads and conversions. If you think about revenue as a relationship and not just a transaction, as suggested by Richard Binhammer of Dell, then you’ll see that social media can have a tremendous influence on the long-term relationship.

Some important things to understand are the impact of social media on: 1) purchase behavior, 2) search results and 3) customer loyalty.

If you have a physical store, make sure you have tracking systems in place for each channel.

You might try campaigns on Facebook, Twitter and Groupon and see what drives repeat business the best. Groupon is likely to attract deal-seekers who might become new customers, whereas your fans on Facebook and Twitter might find themselves more deeply connected after experiencing one of your “Facebook only” deals.

Test the hypothesis and run your own numbers. Results will vary widely based on your business type and fan base.

#4: Operational Savings

Social media can provide opportunities for hard and soft savings to your business. As customers become brand advocates, your brand reach will extend without significant expenses.

Additionally, social platforms can become far less expensive places for handling customer service. That depends on whether you have someone who can be dedicated to listening to online conversations in real time.

One smart practice is to forge relationships with fans who have strong social media influence. These people can become your advocates and even help with customer service. If they’ve already shown a willingness to speak on your behalf, find ways to feed them information.

#5: Customer Experience

Etlinger’s research discovered a direct correlation between social media and customer experience that translated into improved brand health, increased revenue and cost savings.

An example not cited in the report comes from Kraft Foods. The social media listening team discovered a trend on words like “cut,” “blood” and “salad dressing.” Those aren’t words you want associated with food, so the team dug deeper to discover that customers were cutting themselves when opening a newly designed salad dressing bottle.

The problem was easily solved, but wouldn’t have been discovered without social media. The injuries weren’t serious enough to require emergency room treatment. It was merely an inconvenience, so customers didn’t call the 1-800 number. Instead they told their friends on social media and forgot about it. Because you don’t usually buy salad dressing very often, this problem could’ve gone undetected for months.

#6: Innovation

As highlighted by Etlinger, Starbucks and Proctor & Gamble have found ways to crowdsource ideas through their innovative sites MyStarbucksIdeas.com and pgconnect.com. Not everyone can resource their own social media innovation site, but all businesses can find ways to listen to their customers for insights into product and service improvements.

For example, Twitter can give you insights into what people want. Follow statements such as, “I like,” “I wish” or “I hate.” If you heard, “I wish Charlie’s hadn’t discontinued the chicken cordon bleu,” you would have some great intelligence.

Alternatively, you could even start a conversation on Facebook asking your customers for ideas on new products, services or promotions. Maybe you could even host an “Idea Wednesday” where you spend an hour on your Facebook page looking for creative ideas.

Finding the Right Tools

There are many measurement tools available, and quite a few are free or very inexpensive. In addition to Google Analytics, here are some worth checking out:

Simply Measured has created two tools that work well together.

• Export.ly helps you analyze your Facebook fan page, Twitter audience and more through downloading customizable Excel spreadsheets.

With Export.ly, you can export data from Twitter, Facebook and email into an Excel spreadsheet or CSV file.

• RowFeeder is an inexpensive way to monitor what people are saying about your brand.

With RowFeeder, you can track your brand name; Twitter handle; the hashtag for a specific campaign, event or promotion; or general topics of interest.

If you want to figure out how often your tweets are being shared and by whom, check out TweetReach.

TweetReach analyzes the tweets that match your search.

Edelman has developed two tools called TweetLevel and BlogLevel that measure the level of influence, popularity, engagement and trust on your Twitter account and blog. These can be good indicators of the health of your social media efforts. Edelman also provides helpful tips on how to improve in each of these areas.

You can use TweetLevel to find "important" people within a specific context and start conversations with them.

BlogLevel is a purpose-built tool for PR and marketing to help ensure brands use blogs effectively.

To Learn More

Susan Etlinger has shared more detailed information about the report in the following webinar created for CoreMetrics.

Key takeaways:

1. Tie your measurement program to key business objectives.
2. Understand the key terms to follow for your business.
3. Find tools that will give you the results you seek without breaking your budget.
4. Understand that revenue is not a transaction, but a relationship. Treat your customers like people and understand how your online actions are affecting those relationships.
5. Find ways to get your customers involved through customer service, brand advocacy and idea generation.

What are your thoughts? How do you measure your social media efforts? How do these ideas help you align your business goals with your social measures? Leave your comments and questions in the box below.

Here are 7 steps to help you overcome the time dilemma.

1. Set One Specific Social Media Objective

One of the reasons why people waste time on social media is because their objectives are:

• Not clearly linked to their business strategy
• Inappropriate for the environment of social media

Don’t be surprised if you find you need to participate in social media for a little while before you find the right way to use it for your business objectives.  Take the time to observe your audience and learn how to connect with them on social media.

Read the Social Media Marketing Report to understand how other marketers are using social media.

Return on time investment: Before you see any return on your time investment in social media, you need know what your business can get out of it.

Don’t jump into social media with both feet and no business objective. Develop your social media presence with one clearly defined business objective in mind.

2. Find the Right Social Media Strategy for Your Business

This is what Mari Smith, the Pied Piper of Facebook, says: “The main reason people fail in social media is lack of a strategy. There’s so much confusing and conflicting advice out there, it’s easy to get lost in the social media jungle. By having a clear objective, developing a strategy to accomplish that objective, and measuring milestones along the way, you’re bound to have better results.”

• What can you say on social media that would interest your audience?
• How should you say it?
• Where should you say it?

Many businesses choose to use a blog as their central social media hub.  A pivotal role is played by what Authority Blogger Chris Garrett calls Flagship Content. The truth is that your social media strategy needs to be tailored to the particular message you want to convey to your audience.

Return on time investment: When you include a clear objective in the social media strategy most appropriate for your business, it boosts your overall marketing strategy.

Don’t waste time using other people’s social media tactics. Find a social media strategy that connects your business to your audience.

3. Make Your Presence Social

Once you have defined your social media strategy, the process does not end there.  It will only work if your presence is truly social and, as Rebecca Leaman says, you need to also “focus on being good online neighbors.”

A good resource to find out how to connect with your audience is Groundswell. And for ideas in creating the valuable content your business needs on social media, Jay Baer gives 7 steps to get your message right.

Return on time investment: The right message aligned with your business objective in a social media marketing strategy can save your business time spent elsewhere on sales and marketing. 

Don’t waste time sending inappropriate messages. Find the right message for your business and, above all, be social.

4. Stay Focused on Your Business Strategy

Social media can be a particularly dangerous time waster because:

• It is a social environment.
• Businesses need to create a social presence and it can be hard to find the balance between business and social.

Don’t fall into traps when adapting your marketing to social media. As Chris Brogan says, the question of friending and reputation “is difficult in the face-to-face world, but it’s even harder online.”

Return on time investment: Social media marketing creates stronger relationships with the people in your market.  You can use it to build trust and loyalty with more people and in less time than with most other marketing tactics.

Don’t waste time by getting sidetracked. Adapt social media to work for your business.

5. Adopt Social Media One Step at a Time

Amber Naslund says trying to be everywhere on social media is a big time waster. Social media is made up of numerous different places where people hang out, and these places all have different environments.  You cannot try to be everywhere all at once and know how to act and what to say.  You need to take things slowly:

• Research to find out where your business should be present.
• Observe and learn what to say.
• Listen and learn how to adapt to each different site.

Be sure to add your own social touch to all of your social media communication. Have a look at Chris Brogan’s social media task suggestions.  Look at them closely and you will see how these tasks add extra value to his marketing strategy as a whole.

Return on time investment: When you choose your actions wisely and add some social juice to them, they can give you back much more than you put in.

Don’t try to jump into all social media platforms at once. Find the social media sites that work best for your business.

6. Get Extra Mileage Out of Your Social Media Marketing

Many businesses look at what the social media “stars” are doing and think they would never have the time to do the same thing.  Here is the scoop: You need to get into social media before you can fully understand how your time spent can multiply in value.

Once you get your basic social media presence up and running, something very interesting happens.  You begin to see little things to do to get a much wider presence on social media.

Return on time investment: The good news is that you can get extra mileage out of your daily social media actions as soon as you begin.  One of the very first things you need to do when you begin marketing using social media is to set up professional listening activities.  The time you spend on this aspect alone usually adds much more value to your overall sales and marketing activities than you can imagine.

Don’t waste opportunities for more visibility and buzz. Adopt the social attitude.

7. Avoid Social Media’s Fatal Attraction: The Shiny Bells and Whistles

The truth is that there is a lot of movement in the social media arena.  New social media tools, applications and platforms hit the news every week.  And you just do not know who the key players will be this time next year.  It’s natural for businesses to hesitate in investing time in such a climate.

Return on time investment:  The key is to focus on developing social skills and to integrate these into your marketing strategy.  This is how you can spend your time wisely and be well-prepared as:

• Marketing becomes social
• Media habits change

Don’t focus on the social media tools. Focus on developing the social skills you need for your business to create a strong social presence.

Use Social Media to Add Extra Value to Your Current Marketing Strategy

Social media helps businesses to create stronger relationships with their clients; for instance, by creating trust agents.  This trust factor can be so powerful it removes the question of time investment.

Social media marketing can save your business time when it is included within your overall marketing plan.  When you add the ability to build trust, social media becomes a powerful marketing tactic not to be ignored.

These are just some examples of how to integrate social media into an overall marketing strategy to save businesses time.  What other tips do you have? Please share them in the comment section below.