Social media is the number one topic on the minds of many local businesses. 11% of local businesses next hire will be a social media manager. 85% of consumers believe a company should interact with it’s customers on social media
And the reason is clear. Local social media is your new customer relationship management system. You used to only be able to have direct 1-on-1 conversations with your customers in your store. Now customer service extends to the web via social media platforms, where you can build on those relationships while your customers are at work, in their homes or on their mobile device.
And local social media is your new advertising channel, using people instead of media as distribution – it’s word of mouth marketing amplified. More genuine, more effective and more personalized.
But how do you evaluate local social media ROI? Remember that just because you can’t fully quantify it, does not mean it’s not worth doing (quantitative marketers beware). It’s as hard to quantify the value of that good service encounter in your store as it is on your Facebook page. But it still drives your business and you wouldn’t turn your head if an employee ignored or gave bad service to a customer in your store.
That said, here are some tips to quantify how much value you are getting out of your local social media.
1) Try Something Trackable to the Register Only to Social Media Followers
There are plenty of things you can do that are trackable to the register. You could promote a deal only to your social media following with a code word or use a formal deal registration platform (not Groupon or LivingSocial as they promote on their own). Then you can see specifically how many people came in.
2) Track the Value for Off Peak Traffic or Lesser Sold Products
I love the Mermaid Inn in NYC. On their Twitter (@themermaidnyc) they offer a promotion on “Social Media Mondays” with a code word for 20% off (see social media ROI tactic #1). What’s most interesting is that they offer this on Monday. Why Monday? Because it is hard to fill a restaurant on a Monday (and between you and me, it’s not necessarily the freshest day for seafood. Just ask Anthony Bourdain in Kitchen Confidential). So this is of even greater value than just any sale. Driving people in on a Monday to a restaurant is more valuable than driving a Saturday reservation, because you may already be packed. Similarly, getting people to your store for a new service or product or lesser sold product or service, or as a clear-out sale may be more valuable than promoting what’s already popular. This is why loyal customers are much more valuable than new customers.
3) Track the Social Media ROI Among Employees
What’s the ROI of having your employees on brand and on message? Training, team meetings and one-on-ones are all invaluable. But test if they are following your Twitter feed. Are they celebrating your successes with customers and with each other? Are they talking about that wonderful thing that happened last week? If they are not following what happens at your business, you may be losing out on ROI of employee training and morale. Take a straw poll and see which of your employees is up to date on your business.
4) Track the Social Media Metrics You Know Lead to the Register
This may be the least nuanced of the advice here, but yes there are metrics that more closely lead to the register. If you run an eCommerce site, put link tracking codes on each link so you see exactly which sales resulted from social media. Next best, track visits to your site via Bit.ly or equivalent URL shortener to see what traffic your shares drive (although that won’t show organic shares which should be tracked separately). Also, ask people at the register each and every time how they found out about your business or why they came in. Keep a log for a week if you don’t want to do this all the time (see #5).
AND maybe most importantly …
5) Evaluate trending all the time, but concrete ROI occasionally
You should be constantly looking at the more “fluffy” metrics like likes and follows, comments and retweets, etc. that show you are likely doing the right things to build a following that could be valuable. Every now and then, you can do something like the above tactics to measure ROI specifically – like see how many people in your social media following actually respond to a specific, trackable call to action. But don’t fall in to the trap of having to measure the value of everything all the time or to discount those relationships you have nurture that are not specifically trackable. Do an occasional gut check that the engagement is real in business terms but don’t make your customers go through hoops every time you post.
Do you have other tips for tracking ROI? Let us know.
Ok now you can look at the pretty infographic on social media ROI. ;)