Social media success sometimes appears arbitrary.

Perhaps you’ve wondered, “Why does company X generate leads and business from their social activity while my company wastes resources on blogs that don’t get read and tweets that go unanswered?”

Social media is so new, sometimes the path to success is unclear and it’s easy to lose your way.

If you want to demystify the experience and improve your ROI (return on investment), you need to make sure that your marketing and campaigns include these four essential components:

• Attraction: How do you attract qualified leads to your website or business?
• Retention: How do you stay in contact with people after they’ve left your website or store?
• Conversion: How do you get people to “buy now” or move further down the sales funnel?
• Measurement: How do you determine if any of this is working?

By following this model, you’ll be able to ensure that you’ll successfully navigate your way through this untamed wilderness.

What follows is a detailed map you can follow.

Why is accounting software more popular on Facebook than you?

#1: Attraction: How to draw people to you

For most of us, we want to attract qualified traffic to our website. While there are many ways to do this—including search engine optimization, traditional advertising and referrals—I’ll focus here on social media.

To succeed with social media, you’ll need to have a content strategy. This means talking to your ideal customers about what they’re interested in, and having those conversations where they hang out. (For more details, check out How to Develop a Social Media Content Strategy.)

Depending on your audience, you may need to become more active on Facebook or join groups where your customers talk on LinkedIn.

Chances are that LinkedIn has a few groups where your ideal customer hangs out.

If they’re not active on social networking sites—or can’t access them during the working day—you’ll need to create blog posts and videos that help them solve their biggest problems.

Knight Vision helps businesses solve their media coverage problems. Hopefully those businesses read this post before any bad coverage!

While developing your social media profiles, a few things to keep in mind:

• Brand your profiles: It’s free or nearly free to set up a blog, create a YouTube channel or build a profile on popular social networking sites.

Because of this, everyone does it. To rise above the pack and establish your credibility, you’ll need to create a branded experience that will immediately help build trust with your audience. This may mean a custom Twitter background, a Facebook landing page or a detailed work history on your LinkedIn profile.

Nike scores with their branded experience on YouTube.

• Go deep, not wide: Don’t try to be active on every social network out there. Instead, focus on becoming great at one or two platforms where you’re most likely to engage your prospects. Once you’ve mastered those, you can add more to your plate.
• Be consistent: One blog post, one video or one tweet won’t save your business, no matter how clever it is. Success comes from consistency. Your customers don’t want to work with a one-hit wonder; they want to work with someone who has consistently established credibility and expertise over time, which shows that the person should be around for a long time to come.

Emarketingvids build its following through consistently creating content of interest to their audience.

• Create paths back to your site: Although being too salesy can turn prospects off, you should always have links to your website so they can learn more if they wish. Ben Pickering has a great article entitled 5 Tips for Driving Facebook Fans to Your Website that gives some suggestions on how to do just that.

#2: Retention: How to keep people coming back

If you’re selling a big-ticket item, chances are your prospect isn’t buying from your site without looking at your competitors’ sites as well. Likewise, if you’re selling a product that needs to be regularly repurchased—like contact lenses or morning coffee—your prospect will continually see competing offers.

How do you stay top of mind and keep the lines of communication open after someone has left your website? This is where retention comes in.

While “traditionally,” email marketing has been the favored tool of the Internet marketer, these days social media plays a critical part.

From the home page, we’re asking people to like us on Facebook, follow us on Twitter and subscribe to our blog posts or YouTube channel… all of which send them offsite.

This goes against everything we used to know: You never send people away after you’ve captured their attention! (It’s like the Vegas casinos: Never show a gambler the exit sign.)

However, getting people to like, follow and subscribe to us gives us the opportunity to continue to engage with them. We can build a relationship by better understanding them through listening and helping them.

Social Media Examiner engages their audience on their website and on Facebook.

To maximize your retention activities, make sure that it’s easy for someone to engage you in your social media activities right from your home page and every other page on your site.

Remember: Always provide value to your ideal customer with your social media activities. You’re only one click away from being unfollowed, unsubscribed from and unliked if you’re not providing value.

#3: Conversion: Moving from liker to buyer

Improved conversion rates (whether it’s a “buy now” button or filling out a contact form) are a natural outcome of being active in social media.

The latest HubSpot “State of Inbound Marketing” report showed that companies that blog more have more consistent sales. Companies also report that social media has made the biggest gain in lead generation activities.

Social media continues to grow as a lead generation tool for businesses.

Anecdotally, at my company’s own site, our highest converting traffic comes from blogs and our YouTube channel. In fact, visitors who first watched one of our videos at YouTube are over 700% more likely to fill out a contact form than the average site visitor. Are you ready for your closeup?

www.youtube.com/watch?v=toqC5Ut3GJA

For a more detailed look at conversion rates and the difference between social media leads and other leads, check out Nichole Kelly’s post, 4 Tips for Converting Social Media Leads.

#4: Measurement: Making wise decisions

The concern many companies have about social media is that it lacks accountability and tracking, yet this just isn’t true.

Start by installing some robust traffic reporting software on your website, such as Google Analytics. These tools will give you insight into where your traffic is coming from, so you can determine if your Facebook activity is paying off or has been a waste of time.

I was surprised to see this much traffic coming from StumbleUpon. Time to invest more effort there!

You can also see which of your blog posts bring in the most traffic, which gives you insight into what type of content you should create moving forward, and perhaps even what type of services you should be offering.

Further, you can set up Goals in Google Analytics to determine where your best traffic is coming from. For a step-by-step walkthrough of setting up Goals in Google Analytics, you can check out this post, Tracking Conversions: Does Your Website Turn Suspects Into Prospects?

You don’t need to stop with website analytics, however. Facebook Insights gives you great, um, insight into your Facebook activity, and EdgeRank Checker is a freemium tool that provides suggestions for maximizing your Facebook activity.

Accumulating fans is the easy part… Can you engage them?

YouTube also offers analytics, breaking down your audience by gender, age and location, as well as showing you which videos are the most popular and what caused them to attract more visitors.

We appeal to middle-aged men. Maybe it's time to hit the gym.

Conclusion

Social media is still in its infancy, and a lot of the tools and techniques we currently read about will be outdated by next year, if not by next month. (See MySpace, Flock, Google Buzz, and pinging news aggregators with our RSS feeds.)

So rather than focusing myopically on flavor-of-the-month tactics, make sure that all of your social media campaigns include the formula of attraction, retention, conversion and measurement, and you will have a sustainable plan for success.

Your turn!

What do you think? Do your social media campaigns include all of these components? Is there something we didn’t include that you feel is a requirement for success? Leave your questions and comments in the box below.

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.

Steve reviews the biggest changes in social media over the past 12 months.  He also shares the latest social media trends and gives tips on what businesses should focus on in the future.

Be sure to check out the takeaways below after you watch the video.

Here are some of the things you’ll learn in this video:

• Why globalization of social media is now skyrocketing
• Which companies are doing social media right
• How to monitor the “irritations” shared on social media to improve your business
• How the increase in real-time communication impacts businesses
• Why it’s important to focus on when you engage on social media
• Why Twitter is in the future of media
• How to connect the ROI of social media on a business level
• Why the leadership of social media will come from outside the U.S. in the future
• How privacy issues impact geolocation on social media

Find Steve at Edelman Digital (@EdelmanDigital). You can also connect with him on Twitter at @steverubel and at SteveRubel.me.

What social media trends do you monitor? How will they impact your business? Please leave them below.

What Is Klout?

Klout calls itself the “measurement for your overall online influence,” but what are they really trying to do? To understand Klout’s goal, you have to understand influence itself and the difficulty in measuring social media ROI. In the beginning, social media was measured in followers and fans, and for a time, life was good.

But with companies joining social media sites by the tens of thousands, everyone got followed and eventually tricks, software and spam accounts ran wild. Newcomers were able to create large ‘followings’ and social media service clients couldn’t tell who was legitimate, and who had purchased a great ‘friend adder’ software program.

If we can’t count on raw numbers to tell us who’s popular online, then what can we do? Enter Klout.

Klout.com has a new user interface… niiiiice!

How Does Klout Work?

Klout primarily uses Twitter and Facebook (with plans to integrate LinkedIn) along with over 35 different variables to determine your real social media reach. Klout groups your score into three different metrics: True Reach, Amplification Probability and Network Influence.

True Reach

True Reach aims to answer the question of whose audience is really engaged, and who just followed a bunch of spam accounts. Klout actually eliminates inactive and spam accounts from their algorithm and looks at how the rest of your audience reacts to content that you share in your Twitter and Facebook feeds. Additional metrics include how many people you’ve followed, and also how many lists you’ve been added to.

True Reach shows the size of your engaged audience, excluding inactive and spam accounts.

Amplification Probability

This metric is affected by what happens to your content after you send it out. Is it ignored? Is it retweeted? Do your messages start conversations, or are you just talking to yourself? In addition to the previous metrics, Klout also measures your outbound vs. inbound message frequency, giving preference to brands that are both in demand, and actively searching out conversations.

The Amplification Probability graph shows you how likely your content will be spread.

Network Influence

The Network Influence score is the online version of “How cool are your friends?” This metric lets you know how influential your engaged audience is, and determines if you’re influencing the ‘cool kids’ on the platform, or if you’re just inside an echo chamber of your own friends, who may not be very important (according to Klout).

This is where Klout gets a bit incestuous. Klout uses its own Klout score to decide if your network is influential. Think about this: How did Klout’s algorithm decide the first Klout score if part of the score is decided by others’ Klout scores? Is this a fatal flaw in the system? I’ll let you be the judge.

Network Influence measures the influence of those individuals who follow the original user.

Why Is Klout Important?

Klout is relevant simply because as marketers, we’re asked to measure things. Clients want to know ROI, managers want to know campaign reach, and so on. Klout is the closest (read: most popular) thing we have to a social media credit score^TM (yep, I made that up).

Think about it. If you can’t tell your clients that looking at the number of followers or friends that they have on their profile is the way to know whether their social media strategy is working, then what can you do?

There are several metrics that are important, but there is no proverbial “one number to rule them all.” Klout is working feverishly to get us close to that one metric that gives a quick snapshot of how we’re doing online. Marketers will be happy, managers and C-Level executives will rejoice, and Klout will become the Experian of the web. The end…

Should You Ignore Klout?

Some of you don’t buy a word that I just typed in the previous paragraph, and I know why. Some of you already know the flaws in the Klout system. Don’t look now, but Klout can totally be gamed to get a high score. For as hard as they worked to make the system, it’s pretty easy to break.

On another note, some of you have a problem with using one number to judge the effectiveness of an integrated digital marketing effort. There have been several occasions where people were labeled influential on subjects that they’ve never even tweeted about. Even my own Klout profile says that I am an influencer on the subject of “aviary.” Guess how many times I’ve ever talked about birds? Once. I tweeted that birds were stupid for swooping in front of cars on the road. Expert analysis indeed.

My Final Thoughts

It’s tough to judge Klout today, because it’s definitely a work in progress, but I totally get what they’re trying to do. The real question is, is it effective?

Unfortunately, you have to define the word effective for your brand. On one hand, Klout does give you a set of “golden rules” to live by online. Join the conversation, mingle with important people, make sure that you’re sending out valuable information and be there consistently. Who can argue against that? If you’re a brand that’s simply engaging with an audience and wants to know if you’re in the right ballpark, I don’t see Klout’s deficiencies as reasons to avoid the metric all together.

If you’re a brand that intends to use Klout to reach out to the influencers in a certain niche, then I would have to caution you against Klout. Their algorithm is good, but not great. Just as fast-food restaurants budget in a certain percentage of their inventory as a loss, you should expect that some people will have “slipped through the cracks” and landed on your influencer list by mistake. If that’s something that you can live with while Klout perfects their system, then go right ahead. If not, then you may want to wait a while.

Have you ever used Klout as a metric for your brand or for a client? 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.

The truth is there are dozens of viable metrics you can use to gauge the success of your social media efforts. The challenge isn’t measurability; it’s knowing which measures are meaningful.

Here are the 6 undervalued social media success metrics you should be tracking:

#1: Daily Story Feedback

Instead of just counting the number of Facebook “likes” you accrue, which signifies nothing more than digital bumper-stickering, track how often your fans click “like” and comment on the status updates you post.

The more fans who click “like” and comment, the more likely your future updates will be seen in their news feed, dramatically increasing your actual Facebook audience.

If you’re an administrator of a Facebook fan page, you can find the Daily Story Feedback chart at http://facebook.com/insights (look in the Interactions category).

#2: Look at Klout

Rather than paying rapt attention to the number of Twitter followers you’ve corralled, instead look closely at your Klout score.

Klout is an online influence gauge that combines several data points (followers, retweets, clicks on links, etc.) and then applies some fancy algorithmic voodoo to arrive at a unified metric.

The data used to calculate Klout continues to change (they recently added Facebook information), but I’ve found it to be the most reliable influence-tracking metric, because it’s nearly impossible to “game” using automated follow-back programs and other Twitter nefariousness.

Klout’s scoreboard for Social Media Examiner founder Mike Stelzner is 73 (on a 1-100 scale).

#3: PostRank

One of the challenges of writing a blog is knowing how to value the wide variety of reader engagements and behaviors. Should you care more about Digg submission than about comments? Are tweets more important than Facebook shares?

PostRank Analytics solves this problem.

It’s free if you connect with their “influencers” outreach program or $15/month if you don’t. PostRank provides a useful, detailed blogging scoreboard, especially if you connect it with your Google Analytics account.

The best part of PostRank Analytics is the engagement score, which is sort of your Klout score for each blog post. The system looks at total comments, tweets, shares, etc. for each post and applies behavior points and an algorithm to determine the total score. This is a fantastic way to look at your last 25 blog posts to see which type of content you’re publishing generates the most engagement. The image below is a recent post on Convince & Convert .

PostRank Analytics shows “engagement points” broken down by audience action.

#4: Share of Voice

Tracking how often your company and/or its products are mentioned on the social web is a best practice, of course. But without also paying attention to how often your competitors are referenced, it’s difficult to determine whether the chatter about your brand is significant.

To add a reference point to your social mention tracking, create a “share of voice” report.

To do so, determine the number of times your company and its products are mentioned on the social web in a neutral or positive context over a 30-day period. You’ll want to use Radian6, ViralHeat, Social Mention or any of the other social listening tools for this project. Then determine how often your competitors are mentioned (neutral or positive) during the same 30 days.

Add up all mentions for the category (you plus your competitors), and then divide your mentions by the total to calculate your “share of voice”—which is always a percentage. Usually, share of voice reports are formatted as a pie chart, so you can easily see how you fare versus your competition.

#5: Search Volume

Perhaps more than any other marketing metric, the number of people who are searching for your brand on Google serves as a catch-all metric for market awareness.

In many ways, social media and your other marketing efforts create demand, which is then harvested via searches.

The tie between search and social media cannot be overestimated. Perhaps the best study on the subject, from GroupM in 2009, found that consumers exposed to a brand in social media are subsequently 2.8 times more likely to search for that brand than are consumers unexposed within social media.

Use Google Insights to examine whether searches for your company and products are increasing over time, and if your volume is going up, and your competitors’ isn’t – double bonus!

#6: Inbound Links

Without other sites linking to your website, it’s highly unlikely you’ll ever crack the Top 10 in Google. Links are the coin of the realm in SEO, and without them all you have is a pile of carefully crafted words.

Social media is one of the best places to accrue links, because we social types are prone to link from our tweets, Facebook updates, blog posts, within blog comments, etc.

Track the number of links pointing to your website and/or blog, and examine the source of new links. How many links do you have, in comparison to your competitors? What sites are linking to them that perhaps you could get to link to you as well?

There are several inbound link-tracking services online. My favorite is Open Site Explorer from SEOmoz. The free version allows you to track and report on up to 1,000 links.

Open Site Explorer shows a total number of links (38,935!!) to Social Media Examiner that are coming from 826 separate websites.

If you’re looking for a magic number that automatically determines your social media prowess, you’re not going to find it. Instead, the secret to tracking social media is tying together disparate data sources and selecting the metrics that make the most sense for your company. And those are never the obvious ones like Facebook fans and Twitter followers. Tracking social media may not always be easy and fast, but it’s absolutely, 100% doable.

If you’re interested in more on this subject, my new book, The NOW Revolution (written with Amber Naslund) has an entire chapter devoted to metrics and how to pick the right ones.

What are your thoughts? Have you employed any of these metrics? Leave your comments in the box below.

If you’ve been using social media for a while and you’re still waiting for it to deliver positive revenue, here are some tips you can employ when your social media strategies are struggling to produce.

When you start any kind of social media activity, the ROI will probably be negative. Building revenue from social media activities takes time because you have to develop trust with your audience first.

However, there are many companies that have been using social media for more than 6 months and they’re still not able to show a positive ROI. Why? And where can you look to find potential sources of fallout?

Here are some activities that can kill any good social media strategy.

#1: You Have a Pushy Sales Strategy

Pushy salespeople kill trust.

Once social media brings in a lead, it falls into whatever the normal sales process is for the company. Most companies are not treating these leads any differently than their other leads. Here’s the challenge.

If your company has an approach that traditionally deals with what we call “fast” leads (that convert quickly and respond to multiple phone calls that ask when the person is going to be ready to buy), you may be turning your social media leads off with what’s perceived as “spammy” calls and messages.

We work hard to build relationships and develop trust in social media. Nothing kills that trust faster than screaming for the sale. Just remember that people LOVE to buy, but HATE to be sold.

TIP: Consider putting social media leads into a separate sales process with a different type of scripting.

Rather than asking when people are ready to buy, ask how you can be of service and what you can do to help them meet their needs. Use their answers to determine their time frame for purchase and gear your follow-ups around that.

#2: You’re Using the “Buy Now” Approach

You’ve seen it before—the follow-up email with the big “BUY NOW” button and nothing else in the message. This falls right into the same category as the sales strategy mentioned in #1 and can lead to a quick unsubscribe.

The typical email and communications strategy that you use for “other” leads may not be appropriate for those coming through social media. We expect a personalized response. Show you know who leads are and that you understand their needs. Some prospects are ready to buy now, but others are looking for information and resources and may not be in the “buying” phase.

TIP: It’s okay to have a Buy Now button in an email, but consider offering a personalized message based on what you know about the person and what he or she is trying to accomplish.

Acknowledge how you got his or her name and ask questions; don’t repeat marketing messaging. If prospects don’t click the Buy Now button the first time, try replacing it with something that offers a free resource download or something of value to the lead that isn’t followed up by a sales call. Reintroduce the Buy Now button later.

#3: You’re Not Asking for the Sale

This may sound contrary to the first two, but I’ve also seen the exact opposite where companies are so scared of offending someone that they never ask for the sale at all.

It’s important to give your leads an easy and convenient way to convert into customers. They probably aren’t going to go searching for it on their own and you could lose the sale to a competitor that does.

TIP: Use a combination of lead scoring and lead profiling to determine where someone is in your sales funnel and what he or she is looking for so you can tailor messages that answer prospects’ needs.

Use the lead score and “profile” of who leads are to develop your sales approach and marketing communications strategies for each group. The easiest way to break it up is to create “fast, medium and slow” groups and align the communications strategy with a top “pain point.” Always include a direct call to action in communications, but understand when and where it’s appropriate in your communication vehicles.

Here’s a great example of how Avaya turned a Twitter interaction into a $250k sale by listening to and engaging with potential customers.

#4: You’re Not Properly Using Lead Forms

This can come in a few different scenarios; for example: Companies may confuse when someone fills out a lead form for a free piece of content with sales interest, they may only have lead forms for interest in their products or they aren’t using lead forms to collect information for those who are downloading their biggest pieces of content that generate sales interest.

There are two core examples of improper lead form usage.

• Companies aggressively follow up with “leads” from landing pages offering free content with pushy sales messages as described in #2. The person who filled out the lead form wanted the free content. Unless he expressed that he is also interested in your products, you could be confusing content interest with sales interest.
• Companies only have lead forms for interest in their products. They aren’t using lead forms to collect information for those who are downloading their biggest pieces of content that generate sales interest. This would include items such as white papers or ebooks related to your industry that show your company’s position in the landscape. Don’t miss the opportunity to develop relationships with those who may not be interested in buying today, but will be tomorrow.

TIP: Understand the different types of lead forms you’re using and create a communications strategy that utilizes the buying mindset of the different individuals who fill out those forms.

Consider asking a question in each lead form that tells you whether the leads are “fast, medium or slow” and identify their pain point so you can align your communications strategy with where they are in the buying process and what problem you can help them solve.

HubSpot wrote a great post on how to use better questions to determine lead scores.

Applying lead scores to your sales funnel.

#5: You’re Not Providing “Decision-Making” Content

With social media outreach, you have a tremendous opportunity to help people make decisions about the products they choose. “One of the key benefits of social media (that’s rarely discussed) is its ability to resolve doubt and confusion among fence-sitters,” Jay Baer eloquently stated. Your content strategy needs to focus on helping these “fence-sitters” choose you.

True decision-making content aligns the customer’s pain point with the solutions that solve it. It’s what we call “evergreen” content designed to help find the tipping point to move your leads to the next stage in the sales funnel, from “slow” to “medium” and from “medium” to “fast.” It’s content that you pour your heart and best resources into that, as a result, is always relevant to sales conversion.

Here are some examples of great decision-making content:

• Eloqua uses white papers, webinars, demos and toolkits to drive the sales process. Notice that every piece of content is directly related to problems that Eloqua can help solve.
• HubSpot has a vast array of resources for various content types around their core business, “Inbound Marketing“. By offering the information in these formats, it allows readers to select the “depth” of information they want on the subject and also help signal where they are in the buying process to HubSpot.
• CareOne offers tips on how to vet other debt-relief providers against them.

TIP: Create content that helps your prospects evaluate you against your competition and make the right decision for them.

Understand that it’s just as important to know when customers aren’t a good fit as it is to know when they are. Provide content about topics that you know lead to interest in your products and/or services. Wrap all of this content with a lead form and put the leads in the appropriate place in the funnel.

If you aren’t sure how to create decision-making content, here’s a great article to get you started.

The reason your social media strategy isn’t delivering ROI may have nothing to do with your social media strategy itself and everything to do with what happens after you receive the lead. Evaluate what happens to your social media leads and look for opportunities to cater to their needs, which may be different than for a lead that came from a direct-response paid search ad. Know the difference and you may find that your social media leads convert faster, better and deliver a much better ROI.

Check out these two great resources on driving social media ROI. Use your Blog to Drive Social Sales and Driving Targeted Twitter Traffic.

What ROI social media strategies have you found work best for your company? What tips do you have to share? Please leave your comments in the box below.

Photos: Flickr & Nichole Kelly

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

Andy is also author of the book Word of Mouth Marketing and founder of GasPedal, a group that advises big brands such as TiVo, Dell, Sprint and Kimberly-Clark.

During this interview, you’ll gain insight into how large corporations are employing social media and you’ll also gain Andy’s insight into word-of-mouth marketing.

Word of Mouth Marketing & Social Media

Mike: Let’s go ahead and start with the first question.  What exactly is word of mouth marketing, and how, if at all, is it any different than social media marketing?

Andy: Word of mouth marketing is the art of getting people to fall in love with your brand. Getting them to be so thrilled and so turned on by what you do that they’ve got to tell people how awesome you are.

It’s a series of tactical things that I teach in my book. It’s a philosophy that says if we earn the respect and the recommendation of our customers, they’ll do all of our advertising for free.

Mike: Because they become advocates for you, right?

Andy: Because they love you. This is the Southwest and the Starbucks and the Zappos. When people love a brand, they love to talk about those brands.

Social media is a subset of that. It is one tool you can use to make it easier for your fans to talk about you.

These days, we’re really hot on social media. Everyone is saying, “Twitter, Twitter, Twitter.” We love the stuff, but we’re starting to let the tool take over the purpose.

Mike: Just so I understand what you’re saying, word-of-mouth marketing is about getting your customers, followers, or fans—whatever you want to call them—to love your brand so much that they’re going to ultimately advocate for it and spread the word on your behalf, so you don’t have to invest a lot of money.

And social media marketing is just a subset of that, which is leveraging these social media tools to do the exact same thing. Is that what I hear you saying?

Andy: Exactly. Social media is a great tool. I’m a huge user and fan, but it only applies to the online half of word of mouth. Even if you look at the online half, there are probably more recommendations happening by email than Twitter or all the other social media put together.

Word of Mouth Marketing Story

Mike: That transitions really well into my next question.  How has word of mouth marketing evolved, in your opinion, over the last decade? What do you think the catalysts have been?

Andy: We used to think word of mouth was luck. You did a good campaign, you did a good press release and it got buzzed—this magical word buzzed—and everyone was talking about you.

What’s happened is we figured out that it isn’t luck. It’s a planned series of things that you do to get people talking. It’s this idea that word-of-mouth marketing is similar to any other kind of marketing.

I guess what’s new is the “marketing” part. “Word of mouth” is old. “Word of mouth marketing” is new.

Then we layered social media on that. Now we’ve got this big tool to take word of mouth that might have been one-to-one or one-to-two, and suddenly it’s one-to-1,000 or one-to-50,000.

Mike: What did a typical word of mouth campaign look like a decade ago?

Andy: I don’t think the word campaign would have been there. It wasn’t word of mouth marketing yet. We didn’t understand it’s something that you can earn, that you can accelerate or that you can enhance. It just sort of happened.

Mike: The medium was probably email back then, right?

Andy: It was then, and probably is still today, more offline than anything.

If a friend tells you about a restaurant, you tell another friend about the restaurant. You go there for lunch with the office. Now everybody knows about it. Somebody emails a friend, somebody else posts a review, somebody else tweets it and somebody else puts it on Facebook. Then you read it on Facebook and you tell your spouse. Then you tell your coworkers.

The conversations weave in and out online and offline. None of these tools are the sole channel for one particular conversation. Your recommendations are flowing in and out of whatever format makes the most sense.

Word of Mouth Marketing Steps

Mike: What might be some of the word of mouth marketing steps at a very basic level?

Andy: I like to talk about the five Ts. If you go to my blog, there’s a download where you can get all of these written up, which is the framework for any kind of word-of-mouth campaign.

1. Finding the Talkers

Who is going to spread the word about you? They might be fans, customers, just people thrilled by who you or are maybe neighbors. There are all those people who could speak for you.

2. Giving Them a Topic

What are they going to say? That’s unique to the product and the talker who’s spreading the message.

Customers are saying something different than fans. Fans are saying something different than particular user groups. You have to find the topic that people love to repeat, that’s easy to repeat, and that travels.

3. Tools

Tools are all these things we use to accelerate and extend the scale of the conversation.

Mike: Like Twitter, for example.

Andy: Everything social media falls in that tool bucket. But it’s also something like the stickers that come with every Apple product. It’s classic offline word of mouth. Everybody shares those stickers.

The tool can be a T-shirt. If your customers really want to put your logo all over their chest and run around and advertise you for free, they should have a T-shirt!

The tools are all the stuff of this. The tools are things that real estate agents love to do—the refrigerator magnets and the calendars and the rulers and all the other doodads. It’s the stuff that lets the conversation travel.

4. Taking Part

Once people start talking about you, you need to respond, participate and become part of that conversation.

If you don’t join the conversation, either the conversation ends or it goes negative because people think you’re a snob.

5. Tracking

How do you measure this conversation, how do you measure the results and how do you drive through to your business objectives?

Mike: That’s some brilliant simplicity to describe the components of what makes word-of-mouth marketing work.

Andy’s Story

At what point in your career or in the last few years did you decide to focus on social media? What was the turning point for you that made you decide to focus on that?

Andy: There are two. Of the two brands that are part of my company, one is the GasPedal side, but we teach word-of-mouth marketing. It’s the word-of-mouth marketing company.

Then on the SocialMedia.org side, we run the Social Media Business Council.

I think what happened is about 3 years ago, we realized that social media is something that anyone can get up and do. If you’re a small business or an individual, it has that simplicity.

But when you’re a big company, it gets so much harder. It requires significant philosophical, behavioral and operational changes. It’s just not the same inside a major enterprise.

We started this group to be the home base and the peer group for people at big companies who are using social media and want to learn how to adopt it and learn from each other and share. That’s where this started.

Mike: Was this just about when Twitter was exploding in popularity or was it actually even a little bit before then?

Andy: Twitter had just begun. We started in the summer of ’08.

Mike: I think it was really about 18 months ago when Twitter started exploding in a massive way. Then Facebook, of course, just a few months behind, started exploding as well. It seems like you were a bit ahead of the curve.

Did you get there because you started to hear some of your clients on the GasPedal side saying, “We’re starting to hear a lot from our customers about this social media stuff, and we need to get onboard” or had you seen this coming for a while?

Andy: It’s interesting. Our name used to be the “Blog Council” because blogs were the only thing. Social media hadn’t really become part of the mix yet.

We were at Dell headquarters and Dell was doing what they then called a “buzz marketing” conference. Dell had been inviting other companies over to learn how they ran their blogging, social media and conversations department.

I was at lunch with some folks from Dell, Proctor & Gamble, Microsoft and Intuit. We had been sharing our unique challenges with this stuff. We had been talking to each other informally, ending up with “Why don’t we start a group that lets us formalize the sharing, scale it up, and bring a whole lot of companies together?” That was the formation.

Social Media in Business

Mike: That’s incredible. I’m imagining social media has grown into a very popular tool for a lot of these huge corporations now.  Do you agree with that?

Andy: I think every company is using it. What’s most interesting is that the marketing side is such a small part of where social media adds value. It’s really becoming transformative across the entire enterprise. HR is using it, customer service is using it, research is using it and internal communications is using it.

Mike: Do you find it’s often starting from marketing and then spreading to other parts of the organization?

Andy: I would say with 50% of the companies, it starts in PR, which actually makes a lot of sense when you think about PR being much more structured for conversation. You build relationships with reporters, you tell stories and you build long-term dialogues. It’s about words, whereas marketing is about numbers and campaigns.

Mike: You’ve spoken to a lot of big brands when it comes to social media. What are some of the important challenges today that many of these big brands are facing and how are you suggesting they deal with those challenges?

Andy: Probably the biggest challenge is what we call “Guffman,” as in the movie Waiting for Guffman. Everyone is waiting for this special person to show up and be in charge.

In a big company, every department gets it. They know what to do and they want to start using it, but then, “Is the Twitter account for the PR department or should HR use it or are the marketing guys going to use it? Is our Facebook page going to be for campaigns for marketing or customer service?”

You get all of these people moving around in the company trying to figure out who runs it and owns it.

Mike: How do you recommend they deal with this issue?

Andy: It really depends on the nature of the business. A lot of really big companies have a center for excellence, which is a centralized council of folks from all different departments who become the governing or guiding voice of social media across the enterprise.

I think, less formally, it’s about locking into wins. When it’s working over here in this department, you do more of that. They tell the department next to them and they tell the department next to them. It’s a series of small growing successes.

Dark Side of Social Media

Mike: Let’s talk about the dark side of social media. There’s a lot of hype around the phrase social media. Are there certain misconceptions, do you think, among businesses? Do they think it’s the Holy Grail and can solve all their problems? Does it fall short in any particular areas? What are the downsides to social media, in your opinion?

Andy: People think it’s an advertising technique and that it’s about campaigns. If your ad guys take over your social media voice, you’re in trouble. It’s not a customer acquisition tool like, “What’s our ROI?” It’s a conversation tool.

If you start jamming what are really TV ads onto YouTube and calling it social media, it’s not going to work. Equally important, you’re going to miss the point.

Search has made us completely addicted to the numbers. We know to the 800th decimal point our search engine lead generation costs every second of every day. But we don’t know if someone posted an Amazon review about our product that is going to sit right next to the Buy button forever.

Thinking about social media as advertising is really where the danger is.

Social Media Outsourcing

Mike: Let’s talk about outsourcing. Do you think big businesses can outsource their social media activities? If so, what kind of transparency needs to be in place? What are your thoughts on outsourcing social media?

Andy: It’s hard to do a lot of it outsourced. There’s a reason why our group is a ‘brands only’ group. We can talk about these things without the agencies in the room.

The mechanics, you can outsource.

Mike: The Twitter background or something like that.

Andy: Yes, setting it up and doing the creative, some of the heavy lifting on the execution, the analytics and all of that kind of stuff.

But what we’re talking about is fundamentally your customer voice, your brand voice, and your personality. The whole point of this is to connect with people and talk to people. How do you outsource being friends with someone?

And if you think you went bad with all of the tech support that went overseas where everyone just tried to save a buck and it was a disaster for any brand who did it, imagine when your brand is being represented by somebody who’s only in it as long as their agency has the account.

There are exceptions. There are great agencies and PR firms that have long-standing customer relationships with their clients, where the agency is speaking with the customer voice and has been doing it for years and knows how to do it.

Mike: Do you think there needs to be any kind of transparency or do you think that’s not necessary when it comes to this kind of outsourcing if a big company does choose to outsource some aspects of this?

Andy: I am the single biggest advocate and maniac when it comes to absolute transparency all of the time. You’ll see me running all around the country pounding the podiums screaming about ethics because this is what it all comes down to. You can’t build a trust-based relationship that starts with lying to somebody about who you are.

Mike: How would you go about doing this then? If big brands are outsourcing certain aspects—let’s say they have a bunch of Twitter accounts and one of them is maintained by an outsourced agency—how would they disclose that kind of detail?

Andy: It’s surprisingly simple. You say, “Hey, I’m working at so-and-so helping out with branding.”

Everyone thinks this transparency thing is hard. It’s really easy. “Hi, I’m on Brand Company’s team over at the such-and-such agency. How can I help?”

It’s a phrase that goes from total lack of disclosure to complete transparency.

Social Media Success Story

Mike: Let’s talk about a company that’s doing social media marketing. Is there any one particular standout story or company you think is doing it really well? Who are they and what are they doing right?

Andy: I think Starbucks is doing a fantastic job right now.

Mike: What do you think they’re doing right? They’ve been getting an enormous amount of press regarding their Facebook content. I’m trying to figure out if it’s because they’re a big brand. Is it the “Ford” effect? Ford was one of the first big brands to get on Twitter, thus they got all the focus of the press. Is it the same deal with Starbucks and Facebook, or is there something more going on here?

Andy: Starbucks uses social media like it’s supposed to be used. They have a big team of smart people who are out there every day talking to folks. Their followers are earned because they love the brand, they love the products and they love the people they talk to.

When you become a friend of Starbucks on Facebook or you follow them on Twitter and start having conversations, it’s really awesome. That begets more which begets more and that’s how this stuff happens.

Mike: Do you think part of the reason they’re so successful is because they already had a loyal, crazed fan base to begin with, and Facebook and Twitter just allowed them to come together?

Andy: Yes, this goes back to the sort of framework for word of mouth.

People love Starbucks, but it’s hard to have six people in Seattle talk to 150,000 friends every day until you add the social media tools. Suddenly, you can have relationships with lots of people—meaningful relationships—and you can do it with science.

It’s interesting. They presented a case study at our last conference. They did a new Facebook page and Twitter accounts for Frappuccino®, which is a very new brand, separate from the Starbucks Facebook and Twitter pages. Millions of people went from being fans of Starbucks to fans of Frappuccino. That kind of transition doesn’t happen unless people were enjoying the first relationship and they found it beneficial and meaningful, or they wouldn’t have bothered to friend a sub-product.

Mike: Do you know whether Starbucks is actually encouraging people to participate by putting on the cups “Join us on Facebook” or that kind of stuff?

Andy: I don’t know.

Mike: It may just be that their brand was so great to begin with, and then they applied a really great strategy to it that has exploded. It certainly seems as though it follows the five Ts that you’re talking about.

Are there any B2B brands you can think of that are doing social media well?

Andy: There are a lot of good brands. Some of the big ones, some of the pure-plays are Intel, Cisco, SAP and a lot of those tech brands. I forget the exact number, but SAP is picking up something like 20,000 new members of their communities per month. That’s a lot of people.

Future of Social Media

Mike: Let’s look to the future. Where do you see this whole social media thing going in the next couple of years? Do you think the words social media are going to be obsolete? Do you think there’s some new stuff coming on the horizon?

Andy: I think it will get normal. We’ll stop thinking of it as “media.” That’s a bad word. It implies it’s something you buy to get your message out.

Mike: It will be another channel as ubiquitous as email or the fax machine.

Andy: Yes.

Mike: For those businesses that are just now getting started with social media, what would be the single piece of advice you would give them, even if they are a mid-sized or small corporation?

Andy: It’s the same advice for everybody, which is to just do the little stuff. Pick one thing you can do—whether it’s a Facebook page or a Twitter account or one particular product—and keep it really simple. Don’t spend any money. You’ll find it’s surprisingly easy and you’ll have some nice overall results. All of the politics and the fears and the objections that are getting in the way, they all go away because you can prove that it worked.

More Word of Mouth Marketing

Mike: Andy, this has been a really exciting and interesting conversation. If folks want to learn more about you and your organization, where might they go?

Andy: If you want to learn word of mouth marketing, go to GasPedal and check out our Word of Mouth Supergenius conference, our blogs, newsletters and the like.

If you want to learn about social media for big business, go to SocialMedia.org.

Mike: Andy, I really appreciate you taking some time out of your schedule today and I wish you the best.

Andy: Thanks for having me.

Listen to the full interview below to hear more from Andy.

What do you think about this interview?  Do you agree with Andy? Leave your comments in the box below.

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?