Metrics/stats/angels on the head of a pin

You may remember last month’s column, in which I gently counseled that small businesses probably will have to deal with social media this coming year, but have courage: There are ways to measure its value.

This month, I show how to measure the effect of dipping your toe – or your entire foot – into social media.

In order to calculate any ROI of social media, look at metrics, revenue and yearly growth, and cost-savings in areas like advertising, employee retention and R&D.

Bean counting … and more!

Website statistics are one sure way of determining the direct benefits of your social media campaigns. Such metrics show you how many people visited your website, how many came there via your Facebook business page, what the bounce rate was (how many people “stuck around” your site, not leaving from the page they landed upon), how many people commented on your blog, how often you’re talked about on other sites (also known as your social reputation) – things like that.

In essence, such metrics show you how big your exposure is. Instead of buying your way onto a national stage, social media encourages you to earn your way. You reach a larger audience by virtue of how many people are interested in what you’re doing.

With your data in hand, you can begin to look for relationships so you can tell what is actually having an effect.

What’s the relationship between page views and conversions? Are page views a good estimate of conversions? Are people who visit your website landing on the home page, or elsewhere? Are visitors who get to your site via Facebook or Twitter actually buying? When you start to understand these relationships, you can begin to organize your online activities to produce, yes, sales.

The critical thing is to be patient. Social media grows slowly, but steadily. As you get more and more Twitter followers, you’ll see more people visiting your website. As your Facebook business page flourishes, you’ll gain inquiries from people and places you never expected.

Don’t rush, and don’t expect social media to make you money immediately. Once you’ve built a loyal following, you can expect gains, but take your time to build your committed community.

Oh, and be sure to ask. Ask the folks who call you, “Where did you hear about us?” Some won’t have any recall, but a few might and that could underscore your good decision to get involved in social media.

Cost savings

It’s also important to recognize that cost-savings are available to businesses that engage in social media marketing (SMM). Principally, you’ll save in four areas: traditional advertising costs, R&D, employee engagement and employee retention, and, lastly, customer service.

Sure, you’ll have to dedicate time and human resources to social media campaigns, but that’s the only capital you have to spend. Facebook, Twitter, LinkedIn, YouTube – they’re all free. All you need to do is have a good idea. Once you get the social media ball rolling, your costs will go down because you don’t have to keep paying for prime-time television advertisements or billboard placements. With a well-managed social media campaign, you can make your marketing dollars go further.

Research & Development

Believe it or not, social media has proven beneficial in R&D as well. Social media allows you to connect with a target audience, whether it’s a survey group that will try your new product, whether it’s a blog post that yields comments from experts, or whether it’s actually connecting to other professionals (who you may hire) through LinkedIn. Social media is an avenue for connecting with all sorts of people who may prove important to you and your business.

Now here’s a novel way to benefit from conversations that are already occurring on social media platforms: Listen.

You can figure out ways to improve your product or service as it becomes evident from the content of the many conversations within earshot. You might even develop a new service or a new product before your competitors even think of it.

Employee engagement

Social media also fosters an atmosphere of employee engagement and increases rates of employee retention. Although social media is work and needs to be approached with specific goals and timelines in mind, it’s also supposed to be fun. Many of the best social media campaigns have a light-hearted mood about them. And one of the best ways to start a social media campaign is to encourage your employees to enter the fold and tweet about their jobs or post status updates about their work.

Posting updates and tweets about your work forces you to ask an important question: What do I care about most at work? Just asking the question helps you engage more fully. It also shows supervisors what their employees are thinking about and what they care about. Giving employees the freedom to do their own marketing for the business (within reason) has benefits that reach much further than traditional advertising.

Damage control

Increasingly, businesses are using social media in the customer service realm. In fact, they have no choice. Customers are using social media to post complaints and praise for companies and products; therefore, businesses need to be close on their heels.

The service side of social media can potentially save businesses big in customer service costs and certainly helps to increase public perception of your brand.

Instead of saying “Your call is very important to us, please stay on the line” imagine saying in public: “Here’s how we fixed your problem, Mr. Jones!”

In effect, social media makes good customer service better. When you help customers and clients in public, you push bad news out of sight and foster strong affiliation with your brand.

Get inside your customer’s head

Relationship building and customer insight with social media helps you take “service” one step further. Discover what is of most concern to your clients and customers. You can “lurk” online and find out what’s bugging them and what’s making them ecstatic. The more you learn about what they think and, importantly, what they feel, the better prepared you’ll be to be in alignment with them. Where they hang out is where you want to be. Think of it like an Old Town brewpub – and your prospect and customer are seated right next to you at the bar! What would you ask them?

Until next month, see you in the social sphere!

Laurie Macomber is co-owner of Social Media Pilots in Fort Collins. For more information about the firm’s monthly Flight School and Social Media Roundtables, visit facebook.com/socialmediapilots.

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