Measuring social media success can be a bit more challenging than that of other marketing channels. Nevertheless, it’s a myth that you can’t measure return on investment that’s produced by social media marketing programs. You can. In fact, some of America’s top brands (such as Walmart) are getting 10x the return on investment from social media than they are from traditional marketing. To help shed some light on what brands and retailers can do to achieve these kinds of results, here is a step-by-step guide to increasing the ROI of your social media and improving social customer experiences.
1. Start with Smart Measurement
While there are several obvious options for measuring social media ROI (such as “likes” and followers), many brands find it difficult to accurately measure customer loyalty or brand awareness. At LiveWorld, we’ve found that by segmenting conversations based on sentiment, themes, and content types and tracking social metrics such as engagements per author, marketers are better able to measure community engagement and brand KPIs.
Similarly, one really straightforward measurement of ROI that Walmart uses is marketing equivalency. For those of you who are not familiar with marketing equivalency, its measurement that compares the cost-effectiveness of different channels based on a common goal. For example, you can look at how many people are talking about your social media posts over time and how many impressions your posts have received. Once you measure social reach, ask yourself what you would have had to spend to get the same numbers from a different marketing channel such as TV, radio, or even other digital channels. This kind of ROI shows that social media efforts are reducing costs by accomplishing marketing goals more effectively than other media spend.
2. Develop Customer Focused Content Strategies
Over the years we’ve found that the companies seeing the greatest ROI from social media are the ones that develop a socialized view of their brand that defines and enhances customer experiences. We recommend developing a content programming plan that makes promoting conversation among customers the top priority instead of broadcasting brand messaging. When posting on social media, brands should consider using a customer-centric topic mix that is 40% social, 40% category, and 20% brand/products. This content mix creates more engagement and greater reach and increases social media ROI because it emphasizes customer appreciation and ultimately helps brands build deeper relationships with their customers.
3. Scale with Collaboration
Stephen Quinn, former Walmart CMO, shared that Walmart saw 62,000 Facebook posts from consumers on Black Friday alone in 2012. The comment rate was 42 per minute that day. Managing all those comments and conversations in real-time and at scale is no small task. It requires brands to rethink and strengthen the way in which they collaborate internally in order to ensure outstanding customer engagement and social customer experiences.
Fortunately, brands now have the ability to blend the best of both humans and technology with social customer service software that empowers companies to have 1-on-1 conversations with customers at scale. What’s more, companies that promote collaboration are able to work more efficiently, while making decisions that keep the business moving forward.
Furthermore, in order to increase the ROI of social media, brands and retailers need to think of social media as a space where they can enhance the customer experience and shape relationships to build customer loyalty. To drive this point home, a study conducted by McKinsey & Company found that 70% of buying experiences are based on how customers feel they are treated (rather than price or product location).
To learn more about how to create and execute an effective strategy that increases the ROI of your social media marketing efforts, download a copy of our free eBook The CMO’s Social Media Handbook.