During the social media monitoring training course that I hosted in London last Thursday with Marshall Sponder (@webmetricsguru), he suggested an interesting approach to the question of social media ROI.

In Marshall’s view there are essentially 4 levels of maturity which dictate the degree of ROI that you should expect to get out of social media:

1. Social Media Monitoring – Listening to brand, product and industry mentions.
2. Online Research – “Operationalising” your monitoring, so that you achieve measurable targets and results.
3. Social Targeting – Using social CRM and targeting to develop stronger relationships with your customers.
4. Social Business Collaboration – Mapping this knowledge across your organisation to streamline processes and maximise benefits.

Each of these levels denotes a step forward in maturity, and the more mature your business is, the greater the ROI you’re likely to achieve from your activities – as indicated in the simplified graph above. This seems to offer a very sensible solution to a very tricky question. It might also help several million hard-pressed Marketing Managers who can now point to this list and say: “we’re only level two. No wonder we didn’t hit the jackpot”.

Marshall Sponder at his London Monitoring Course

In addition to this, Marshall offered many more pearls of wisdom.  He dismissed the counts of “social media mentions” that most monitoring tools use as the basis of their reporting, saying: “all mentions are not equal; a video is not the same as a blog post is not the same as a tweet!” When you think about it, this is obvious, but it’s amazing how many brands still monitor mentions as if they’re a homogenised  unit of value.

He also suggested that companies that monitor without knowing exactly what they hope to achieve (i.e. specific targets) and what they’ll do about it if they do/don’t achieve such targets, are wasting their time. In other words, monitoring doesn’t work unless you go into it knowing clearly what you’re hoping to find out. This is certainly not the approach of the majority of companies – many of which sign contracts with dashboard vendors before they’ve got any idea what they’re hoping to achieve from using them.

It was a fascinating day for the 25 students who joined us – and we’re now planning to run more courses, both in the UK, US and perhaps elsewhere. If you’re interested in attending one of these, please contact us.

For any CEO or finance officer who remains convinced that ROI must be measured in all circumstances, may this serve notice on your misconception: Return on Engagement (ROE) is the primary measurement of success in social media.

The fact that 65% of businesses that have been using social media for 3+ years have created a detailed strategy indicates that, far from being an accidental omission, ROI is being pushed out of the equation by design. If ever proof was needed to make a seemingly self-evident point, this is it. If your boss suffers from ROI-Fixation Disorder, please make use of this table in their treatment. You might just save their business.

Katy will start of be setting out the ROI structure, asking: what are your goals? What do you want to achieve? By how much and, crucially, by when? She will explain the many different forms of “value”: such as cost savings, trust, the financial value of an advocate, the lifetime value of a maven etc. and set out how you might benchmark these values – and even test them before you start your campaign.

Next, she will look at the “consumer journey”, explaining how relationships with customers can develop over time, how their journeys fracture and become more complex, and how this effects measurement.  She will look at critical success factors, asking: how will you know if your campaign is working?  What are the milestones? And how will you separate the influence of other activities from this one?

It’s obviously crucially important to identify what you are measuring right from the start of your campaign. Katy will work through this process, setting out a framework for defining KPI, asking what the pitfalls of trying to measure some KPI’s are (including how sentiment is not a good measure of advocacy) and exploring other examples of “hard to measure” benefits, such as the value of ratings and reviews, product seeding and community involvement.

In the penultimate session of the workshop, Katy will focus on evaluation, including how to benchmark and how to set out detailed metrics analysis, plus the absolute need for frequent optimising and A/B testing. She will also explain the need for marketing mix modelling and econometrics as an evaluation and decision support tool – using Adidas as a case study.

Finally, Katy will do a live experiment. Using volunteers from the audience she will work through their requirements, producing a framework that will enable them to measure the results of their social media activities. If you’re coming to the workshop – I would strongly advise volunteering for this part of the session, it could save you an awful lot of time and money.