There’s so much choice available that customers can pick and choose who they buy from and where, when, and how it happens. They want to discover, research, evaluate, and purchase on their preferred channel. Give them that option, and they’re more likely to choose you. That’s the whole point behind the multi-channel approach.
Social media may have flipped the switch for marketing, but it also has a knack for making things awfully more complex. Because the first wave of social marketing focused on brand-building mechanics, many businesses have been lulled into following a less-than-ideal framework for measuring their success.
This limited mindset persists today among marketers who place too much faith in shares or engagement -- when the real prize could and should be cold, hard cash.
"At the end of the day, all marketing is about revenue," says HubSpot CMO Mike Volpe. "It may be 17 steps before [a prospect] becomes a customer, and that's what you're working on& but a brand is only valuable inasmuch as it actually delivers revenue."
Businesses are inundated with metrics that fail to connect these dots. That should come as no surprise to the advertising industry, which has a habit of squeezing new channels into older and more traditional ways of measurement and thinking.
In Social Marketing, Old Rules Don't Apply
In her almost two-year-old report, " The Social Media ROI Cookbook," Altimeter Group analyst Susan Etlinger concludes: "The volatility of social data and the pace of change mean that tried-and-true measurement methods are no longer enough. Social data is different. The old rules don't apply."
During her research at the time, Etlinger and her colleagues found that as many as 75 percent of organizations lack a holistic measurement strategy. "Web analytics; social media monitoring; social platforms; and tool, application and ecommerce providers have rushed to fill the gaps, while analysts at brands and agencies have borrowed accepted methodologies from adjacent disciplines to address the unique challenges and pitfalls of social data," she writes.
Although these problems have been on the surface for years, there remains little agreement over the true value of a follower, friend, retweet, reblog, pin or like. Marketers traverse a labyrinth of metrics with each campaign -- which often results in data that has more to do with vanity than actual business objectives.
Many of the vanity metrics applied to social media are simply a carryover from earlier digital formats. Marketers can hang their hat on various statistics, including share of voice, interactions, impressions, amplification rates, audience growth, social reach, engagement by channel, average interactions per post and many others.
Good Analytics Begins at Home
With metrics like these, it's no wonder so many companies fail to think about social engagement in terms of revenue building. Part of the blame for this misguided measurement rests with the purveyors of social media itself.
"There's a difference between the metrics that those platforms provide and the things you can measure yourself through your own analytics and on your own website," Volpe says. "The metrics that those platforms provide are good -- but in nearly all cases, they don't give you any tracking down to the customer level or how many of those people became customers, because that's tracked within your own systems, not those platforms.
"Having good analytics around your social marketing starts with having your own analytics that can actually track down to what we would call closed-loop marketing," he adds. Pinpointing that lead origination or first point of contact all the way through the funnel to an eventual purchase is paramount. Companies who rely entirely on Facebook, Twitter, LinkedIn, Pinterest and other social companies for this data miss the bigger picture.
These platforms can be very effective channels for brand awareness, public relations and testimonials. All of those activities should eventually drive revenue, Volpe says, but none of these social platforms deliver that most valuable metric of all. "I don't feel like any of them actually go as far as they should in that direction."
Of course, there are still unique marketing benefits to be gained from each of these platforms. Facebook has formulated the social graph to enable very fine-grained targeting, for example, but it's Twitter that's done the better job of building the advertising into the natural experience of the platform, according to Volpe. He also gives LinkedIn high marks for business-to-business marketing.
"People on Twitter seem to be more accepting of the advertisements than on Facebook," he says. "I think Twitter's done a little bit better job of building in that to the overall experience. That being said, a lot boils down to how people are using it and what the content of the ad is."
Trick of the Trade: Bridging the Analytics Gap
The first step for every company is to make sure that any analytics tools they use can connect to the customer relationship management (CRM) and ecommerce systems that track their revenue. "It's really about bridging that gap," Volpe says, adding that it's about business analytics or marketing analytics, not necessarily Web analytics.
"We actually measure the number of new inquiries we get from social media, how those progress through our sales process, how many of them become customers and what revenue we get off of it," Volpe adds. "We literally just do it by measuring for the people that find us through social media, how many of them actually end up purchasing and what they actually purchase."
Those eager to get ahead of the curve should put a priority on identifying the points where customer data and social conversations intersect. This mash-up of disjointed data is viewed by Volpe as one of the most important emerging trends today.
Read more about social media in CIO's Social Media Drilldown.