In “Competing on Analytics”, (Winter 2009 Harvard Business Review), author Thomas Davenport encourages the readers to become an “Analytics Competitor” or someone who “…use(s) sophisticated data collection technology and analysis to wring every last drop of value from all your business processes”. Analytics Competitors, Davenport concludes,”…seize the lead in their fields”.
Many organizations today are now trying to evaluate their social marketing results by asking themselves “How can we determine the value of our social marketing efforts through analytics?” With social being so relatively new – there’s not a true industry standard to help in their analysis – but there are a few approaches which they should consider.
When conducting an analysis, or even when calculating ROI, rather than concentrating on how certain metrics from traditional marketing don’t work with social, consider instead rethinking ROI from the ground up. Take into consideration the qualitative and quantitative benefits and the impact to other areas of the organization. If done, organizations begin to see that ROI for social marketing isn’t just a theoretical exercise, like trying to develop cold fusion. There are real across-the-board benefits to be found.
Utpal M. Dholakia and Emily Durham recently conducted a study on local bakery and cafe chain in Texas adding social to their mix in advertising. They concluded that customers spent the same amount of money per visit, increased their number of visits, and generated “more positive word of mouth than nonfans”, “reported significantly greater emotional attachment”, would choose the coffee shop over their competitors “whenever possible” (see “One Cafe’ Chain’s Facebook Experiment”, the Harvard Business Review, March 2010).
A review of the quantitative analytics, consider the measurable analysis: number of Fans, number of mentions, increase in traffic to specified, time of brand exposure, increase in sales, or other measures that the organization tracks on a regular basis. When reviewing the qualitative analytics, consider the more emotional elements – such as number of positive or negative mentions, brand awareness and brand feeling, referrals from fans (which are always more emotionally beneficial to the brand), emotional attachment, or other not-so-quantifiable measures which have just as much a quantifiable impact on the brand.
Here are a couple resources (that have their own links) to review when conducting your analysis and determining your measure and approach for ROI and analysis: