Measure the Three Most Important Business Metrics With Social Media

Jason Falls is currently rocking the Exploring Social Media Business Summit in Toledo, Ohio, talking about measuring social media marketing, and making sure that businesses are making money from it. There are three Very Important Questions every business manager will ask of their social media manager, and you’d better be able to answer them.

  1. How much did we make?
  2. How much did we save?
  3. Are our customers happy?

Jason Falls rocks his talk about social media measurement at #ESMToledo

That’s right, social media hippies. Social media, just like every other part of marketing, is about making money. It’s not about conversations, friends, followers, Likes, fans, connections, comments, or Google ranking. It’s about sales and conversions, and customer service and satisfaction.

This is why social media monitoring and analytics is so crucial. You need to be able to show your boss that your social media campaign was not $20,000 thrown down the toilet, because you thought it would be cool to sell your bulldozers on Facebook.

Use Google Analytics to Measure How Much You Make

Google Analytics can tell you how people came to your website, what pages they visited, and whether they went to your sales page and placed an order. If 300 people visit your website because of a tweet, 30 people went to your sales information page, and 3 people placed an order, you have a close rate of 1%. If your social media campaign costs $1,000 per month, but those 3 sales are worth $4,500, your ROI is $3,500.

Use Your Accountant to Tell You How Much You Saved.

Social media is a great way to handle customer service complaints, reducing the amount of troubleshooting calls that take 20 minutes, reduce technician visits, or even the total number of calls coming in to your service center. Ask your accountant to tell you how much you saved from month-to-month. Calculate the average cost of troubleshooting calls, technician visits, and the monthly salary of a call center rep. Get with your Google Analytics person and social media monitoring person (#3) to see if you have seen an increase in social media activity. Chances are, the latter had an effect on the former, so count these savings as a win. If you spent $1,000, but saved $3,000 in a month, your ROI is $2,000.

Or, more importantly, if we combine the two, you spent $1,000, and made/saved $6,500, your ROI is $5,500.

Use Social Media Monitoring Services to Measure How Happy Your Customers Are

Radian6, Lithium Technologies, Sysomos, are some of the biggest social media monitoring services around (they’re all subscription-based services, so expect to pay a fee), and if you’re a larger brand, it’s worth doing. If you have a small company, set up a free listening post with tools like a Twitter search (like a TweetDeck column), and/or Google Analytics to see what people are saying about you. Quickly respond to any complaints or queries, and make sure you’re keeping people happy (see #2 above).

Happy customers are returning customers. Measure the sales of returning customers, especially those who have complained in the past, but you managed to keep by solving their problems, and compare that to the amount you paid for the social media monitoring service, and you’ve got your ROI.

We’re hopefully moving beyond the “social media is all about the conversations” way of thinking, at least in the business world. While this was cool and froody back in 2008, businesses are starting to use this as a new marketing channel. For those companies who want to make money this way, it’s real simple: just measure how much you made, how much you saved, and whether your customers like you.

If you can’t answer these questions, quit playing Farmville and go find someone who can answer it for you.

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    About Erik Deckers

    Erik Deckers is the President of Pro Blog Service, a content marketing and social media marketing agency He co-authored four social media books, including No Bullshit Social Media with Jason Falls (2011, Que Biz-Tech), and Branding Yourself with Kyle Lacy (3rd ed., 2017, Que Biz-Tech), and The Owned Media Doctrine (2013, Archway Publishing). Erik has written a weekly newspaper humor column for 10 papers around Indiana since 1995. He was also the Spring 2016 writer-in-residence at the Jack Kerouac House in Orlando, FL.


    1. Im going to probably re-state a bit of what others already have on this blog and in the sphere already but here is my take on it. If you arent already measuring your other marketing efforts so minutely then social isnt the place to start. Its the hardest to measure overall and shouldn’t be your starting point just because it confuses higher ups. If you are dialed in on all your other marketing efforts (few are) then you can try to tackle social measuring. What of the sale in my previous job where the relationship was fostered through social interaction (and the offline follow up) but not technically directly from social marketing? The social and offline interaction led to the customer hearing our radio ad and remembering us. The customer then DM’d stating he was coming in to look at our product. He bought. What part did social play in that? Since it wasn’t direct social marketing that led to the contact being made (they didnt click on a tweet & find our site) how do you measure that? Also what part of the ROI pie does the final sale go into? Radio? Social? Personal Referral? What of the direct web traffic that wouldn’t have happened had it not been for tweets, FB messages or the like? Outside of expensive cookie tracking systems all of this is nearly impossible to pin down to exact ROI. Im not saying don’t measure or have goals, I’m saying don’t sell social short in its reach and value to an organization.

    2. Katherine Archer says

      Some of the media metrics sights are less expensive to get the job done easily and efficiently like SWIX ( ).

    3. Amen – those are key three questions but I like to add some trickier ones – like how much should you spend on social media marketing to get the results you want – (begging the question what are the results we want)? Social marketing is demonstrating value, but we still struggle to justify more budget. Is is more effective than traditional? What is the right mix of traditional and social to maximize your social media ROI? How predictive are results if we increase the spend? These are pressing questions and I would be curious if you have any industry data to help answer them.

    4. Thanks, Sheldon. I appreciate it.

      Sean and Marty, you’re right about the non-financial value of social media being important, but that’s harder to explain to C-level folks who are still afraid of it, and are only listening because we can show it can make money. At least if we can show that part of it, we can figure out the rest as time goes on.

    5. Great post Erik. It’s so true that social media should be used to affect a companies bottom line and not just used to be used. I think you did a great job of boiling it down to simple to understand ways that companies can be looking for the ROI from their social media efforts.
      You taught those “social media hippies” good.

      Sheldon, community manager for Sysomos

    6. Good points, Guys. We are seeing the ROI imperative moving from large companies to smaller ones.

      From personal experience, the difficulty of using just Google Analytics as the big old ROI calculator is the mix of other things going on. Social is one component. My point is, there is more to it than going from Traffic Source to Referring Sites.
      The second bit regarding savings due to social is more problematic. You nailed it when you said “chances are.”
      Your third point regarding happy, returning customers is especially relevant, as the focus on social in the customer service and support arena is huge. This is an area we can expect to see much investment in, both at the vendor level, as well as within companies. Web self service, knowledge management, intelligent escalation processes, and social will be morphing into something much better than what is now being offered. Salesforce, InQuira, Rightnow, etc.
      And even though we all are now chanting ROI, we need to keep in mind that the other side of the fence, namely engagement, sans ROI, is still just as valid. I can point you to dozens of Fortune 100 companies that do both, with equal enthusiasm.

    7. Bravo for the attempt to move the ‘discussion’ to business results! The real ROI is probably a bit less, because you have to account for other expenses and other factors leading to sales, but it’s a good start. The other item to add to the mix is nonfinancial value — your social campaign (and your PR, internal communications, etc.) — can bring business results that aren’t immediate sales (or your firm may not sell online, or have a long cycle, etc.) The value proposition of social media and any other communication activity may eventually end up in the win column, but not right away and not in isolation.

      I do, however, applaud your post!
      member, Institute for PR Measurement Commission