So…people get that social media is important, even here in Ireland. They say, ok…let’s talk to someone and sort out how to do this. We tell them that strategy is key and that measurement and reporting will be essential throughout a social media project. We all agree that there’s great opportunityfor us both when we do things right from the start. But then, we’re regretfully informed that the social media ideas are not going to go ahead because the business is afraid that it won’t lead to sales and the marketing manager will look bad to the people that control his/her budgets. Ok…we understand, social media is powerful for engagement; and we can show you how that will happen; but the real challenge is to prove that it works to directly achieve business goals (and that means sales!).
Good news…it can be done! And luckily, Amber Naslund of Altitude Branding has told us exactly how. She stresses the importance of using your web analytics package to meaasure sales and conversions. This article was a great find, so I thought I’d share it quickly here, as a quick answer to a lot of questions clients are rightfully asking.
“Practical Social Media Measurement: Leads, Conversions, Sales”
She outlines a very practical strategy for Direct Response sales that can be attributed to social media; some of which I’ve snatched here:
Direct Response Sales
The key to this is very simple: you have to provide a unique mechanism for people to buy from you that is exclusive to either all of your social media channels, or specific ones if you’re targeting individual communities. This is what Dell did, with specific deals that were only available to Twitter.
That can be a promotional code you distribute only inside your online community, a specific and unique landing page you create only for your Twitter followers, or a coupon only available to your Facebook fans (and that they can share with their friends, perhaps). Then, you have to deliberately and carefully track the sales that are generated through those initiatives.
This is one place you can calculate true ROI, or the monetary return on your investment in something. You’d have to:
- Account for the time and expenses you put into a specific social media effort, such as your Facebook fan page. That means people hours, costs for infrastructure, and a percentage of overhead that’s relative to the time and human capital investment.
- Account for the direct sales that come from that effort, by tracking them as specifically as possible.
- Take the sales, subtract the cost, divide the resulting number (the net profit) by the cost figure again, and get a decimal figure. Multiply it by 100 to get a percentage. A positive percentage means that you made more than you spent, or a positive ROI.
Keep something in mind though: information on the internet is rarely without bleed into other avenues. I can get a code on Facebook, email it to 10 of my friends, and they can use it too. I can share a specific Twitter link off Twitter, and instead to my friends on Yammer at work. Or I can retweet it, and therefore it’s not just sales via your Twitter followers, but the Twitter community overall.
The point here is to evaluate the sales not as only initiating (or caused) from the specific social network, but as a result of your presence on that network (because people will see it there first, and if they share, you have extended reach). See the difference?
We’ve applied some of these tools to our campaigns; and have found it difficult to attribute sales directly to social media without the investment from the brand or business. But we have seen that social media works to achieve sales objectives. Consider the 19% increase in sales achieved from the Ireland Deserves Sun case study by Crown Paints.
In my opinion, direct response social media sales is where we are headed, but currently, social media in Ireland will best be measured by showing the increased value of a customer who is engaged in social media versus those that are not.
Livin' in a Social Media World... 