These days, it seems a communications or social media conference is incomplete without obligatory mentions of social media measurement, social media metrics and web analytics.

Unfortunately, more often than not it is difficult to show that social media can help improve ROI (Return on Investment).

Is it possible to manage the big headaches of super-abundant information to reap the rewards?

ComMetrics University – Coffee break webinar: Social media measurement: Help! I am drowning in data

If you sometimes feel that you are overwhelmed with data, this post outlines four steps for reaping the rewards – from social media measurement to boosting ROI through social media efforts.

But first, we offer some irony: sign up with your email to be among the first to get our next blog post.

Information management step 1: Remember, efficient is not always effective

Whatever we do we have to describe and define the purpose of social media analytics.

We need two definitions to understand the issues at hand:

- effectiveness of collecting a particular social media metric means that it achieves its stated purpose – requiring a business or individual to spell out: What should collecting a particular social media measurement or social media analytics accomplish?
- efficiency means the desired results are worth more than the resources required to achieve them: measurements collected and insights gained from them must be worth more than the efforts and money needed to get them.

Number of unique visitors to a blog post can be collected efficiently (i.e. quickly and easily). Unfortunately, this metric may not provide us with the information we need.

Rule 1: Collect one or two ‘efficient’ metrics such as pageviews or unique visitors, but focus on the trends over time. Most importantly, define a couple of ‘effective’ measures that help you achieve your strategic objectives.

Sentiment analysis is an efficient way to collect data, but the findings are often invalid = ineffective way to do things.

Information management step 2: Immediately take real action – you must walk the walk

Retailers commonly collect data from their customers and Wal-Mart has confirmed that it handles more than 1 million transactions every hour, feeding databases estimated at more than 2.5 petabytes in size (i.e. 167 times the books in the US Library of Congress).

The above numbers are certainly impressive, but for your business you should ask: Why are we collecting data, or put differently, what actions are taken once the numbers are in?

If no actions are taken within 30 days after receiving numbers about lower pageviews or higher conversion rates, why collect the numbers?

Rule 2: Any collected metrics must result in actions. If no decisions get made based on the insights gained from your data, collecting data becomes a waste of resources and should stop immediately.

Information management step 3: Your data is never accurate – guaranteed

While we collect increasing data, they are often inaccurate, such as those collected through a customer loyalty program. For instance, sometimes I forget my loyalty cards when shopping or purchase my favorite toothpaste or shaving gel at another store.

My Ph.D. advisor once cautioned me, saying:

“Urs, the challenge is to acquire quality data that one can gain insights from in order to improve one’s understanding of the phenomenon investigated.”

In fact, we tend to collect more data than we need, and its quality may not allow us to reach the correct conclusions.

Rule 3: Collected information is never perfect, thereby requiring that inferences be made by watching trends. However, insights gained and decisions made may not be what they first appear.

Information management step 4: Focus groups cannot design products

Often users are given samples or an opportunity to take a test-drive (e.g., toothpaste, laundry detergent, My.ComMetrics.com) in the hopes that after testing the product, they will purchase it.

For instance, Flexity, Tangotram and Combino are all tram manufacturing companies that were invited to Zurich for a 2-week test-drive on Route 11. Passenger feedback was collected with the help of surveys and used to improve tender specifications (i.e. for some seats passengers wanted more leg room which was then included in the tender specifications).

Test-driving any product for a while will result in insights that would not be gained otherwise and can markedly improve user experience. The data can also help improve technical specifications, as well as lowering warranty and maintenance costs.

It is hard to design products ‘by focus group’ or ‘by engineer’. Focus group participants may not know that they hate or love a feature until they try using it in their everyday. And believe it or not, engineers can forget things. A/B testing and product tests are relatively simple and cheap ways to help reduce the risk of a product flop in the case of a new webpage, user-community or corporate blog.

Rule 4: Instead of just using focus groups or asking engineers to design the product or service, take the prototype for an extensive test-drive. Use the data to make strategic decisions for improving your social media measurement ROI.

Bottom line
Somewhere, somehow, more data is always available. Following these four rules should help reduce the hazards of having too much unimportant data. Eyeball measures are easy, but rarely tell you whether you achieved your strategic goals with the help of social media, thereby boosting ROI.

Effective data collection means getting data that is good enough to gain insight as far as your Key Performance Indicator (KPIs) are concerned. In turn, one can take action to improve the company’s bottom line. Unless you have good-quality data at an affordable price, decisions will be based on an unstable foundation and could result in disaster.

Have an opinion on this? How do you manage best? Please share in the comments; I love to hear what works for you!

2010-07-14 you can listen to the podcast – ComMetrics University – Coffee break webinar: Social media measurement: Help! I am drowning in data

Article source: ComMetrics – Measuring social media to boost ROI

Benchmarking requires setting objectives and measuring performance to see if one has surpassed it.

Here we propose five best practice steps to help you develop useful Key Performance Indicators (KPIs) that will result in actionable metrics for your social media activities.

Not a subscriber yet? Want the scoop first? Just leave your email address in the field below.

1. Ensure management understands the difference between operating and financial metrics.

As Anthony (Tony) Tjan put it in one of his recent posts:

“The financial ‘numbers’ ultimately represent the scorecard we care about, but they do not help us understand how to score.“

It is critical to understand what the most important drivers or operating metrics are when it comes success or failure. Accordingly, what contribution for achieving the company’s operating metrics, such as higher customer retention, will come from social media efforts, must be addressed.

Tip 1: Define, write down and agree on the operating metrics you want to use and stick with them.

2. Know your customers and derive everything, including social media activities, from that knowledge.

Companies produce their corporate magazine or place brand advertising in a daily to reach and communicate with the targeted audience. Improving a magazine’s or corporate blog’s reading attractiveness works even better if it:

a) provides information that helps customers do their work smarter, and
b) empowers readers to get more out of services they purchase from the company.

Tip 2: Choose a social media tool that at least 20 percent of your current and potential clients already use themselves (e.g., would they read blog content delivered by email and/or RSS feed) AND provide content that is perceived as useful and adding value.

3. Establish how a particular social media channel can drive cost reductions and/or new product/service uptake.

Every office building has air conditioning and nobody asks for ROI on this. Plus, ROI (Return on Investment) or ROE (Return on Engagement) are the wrong measures for social media.

ROI is the outcome, but we need to understand how social media efforts contribute to operating metrics. Hence, we must establish how the input – social media or corporate blogging – drives the desirable output, such as lowering marketing costs or improving customer satisfaction.

Tip 3: Make sure your operators are clearly tied to your social media efforts.

4. Focus on the 3 to 5 KPIs that represent the most important drivers of value creation for your social media activities.

We suggest that a few clearly defined KPIs are more likely to assure people paying attention, without getting too distracted from the real job at hand.

Most important, KPIs must fit your company’s needs, like custom-made loafers or black heels. Otherwise, who would want to wear or make use of them?

Tip 4: Assure KPI buy-ins from your stakeholders, including your team, superior(s) and possibly key clients and/or investors.

5. Establish a baseline and timeline.

A baseline is a measurement used as a point of comparison. In turn, it can be used to asses progress against the budget or set of other objectives, including KPIs.

So it is advisable to first collect data whenever one begins social media monitoring to see where you stand.
Benchmarking against your own past performance is the only completely relevant measure. Therefore, improvement over the course of several months is what really matters.

For this reason, we developed the ComMetrics Footprint, ComMetrics Health Check, and ComMetrics Resonance, which are each made up of several measures. These allow tracking from the baseline onwards, as well as benchmarking against the ComMetrics Blog Impact index.

Tip 5: Establish the baseline numbers and compare such as Q1 2008 with Q1 2009 in order to improve.

For example, if you focus on backlinks, have they increased over the last quarter? And what about Quarter 3 2008 compared to Quarter 3 2009, what kind of improvements are seen there?

Bottom line
Surely nobody tries to quantify the ROI of air conditioning. Having it when outside temperatures reach 35 degrees Celsius helps office productivity, making it a mediating factor for, though NOT a cause of, ROI. Similar reasoning applies for social media measurement.

Above we outlined five tips that should help in developing KPIs that make sense to your company’s decision-makers and, most importantly, provide social media monitoring that helps your company improve.

More resources on KPI and benchmarking:

- Beth Kanter: Riffing on David Armano’s Listen, Learn, and Adapt: Need Your Organization’s Adaption Stories!
- Vijay Rayapati: Why social media ROI is the most over debated & misunderstood topic?
- Olivier Blanchard: Basics of social media ROI slide presentation.
- Mikey Ames The Hermit: Alumni Association Twitter Use – Baseline Comparisons.
- Beth Kanter: What’s Your Social Media Baseline?
- ComMetrics: Social media analytics and KPIs: From simple to refined.

Looking for telework as a techie? Join our virtual team NOW!

Now, it’s your turn.  What are some of your organization’s metrics, analytics and measurement stories for blogs?