Keep from over complicating the process, implement a simple three step approach.
My blog was recently picked up by an old friend and fellow blogger, Josh Gordon http://jgordon5.typepad.com/content/.
Josh received a comment from one of his followers who questioned the statement I made in a previous blog which was … “if your budget is scrutinized by a CFO, you’ll be happy to know that social media tactics are 100% measurable, and the analytics are provided at no cost to the user”.
Google Analytics provides a variety of free social traffic reports that can be used to prepare a number of marketing assumptions. Since the social media investment typically represents a small percentage of the overall marketing budget, I have found CFO’s to be generally happy with this preliminary level of measurement.
However, to measure traffic and leads and correlate them to a company’s actual sales and revenue is still very affordable and doable. It takes a bit more programming but the analysis is definitely worth the effort, as long as senior management can all unanimously agree with the goal. To accomplish this objective the CMO, CIO and CFO must be willing to work together, share information, and establish a matrix model that can drill down and measure traffic and leads and then correlate them to customer sales and revenue.
Many organizations overly complicate this process, but I believe it can be accomplished by implementing a simple three step approach.
Step 1 – Identify the appropriate social networks with your identified goals in mind and begin to build your networks. The advantage this communication tactic has over mass media marketing is that you now have the true identification of customers and potential customers. This would typically be the CMO’s responsibility.
Step 2 – Create a cross reference database that can identify individuals in your various social networks with your existing customer sales database. This establishes a baseline sales and revenue reference for each customer as well as non-customers. This activity normally fall’s under the CIO’s area of responsibilities.
Step 3 – Close the financial measurement loop. The cross reference sales and revenue database should also have an investment field pre-programmed to identify each of the social media networking tactics with their correlating investments. This would be the CFO’s responsibility and ultimately the information that’s going to make them happy.
ROI measurement models can also be established for the more elaborate and complicated distribution channels that include master distributors and dealers alike.
However, trust, transparency and a willingness to share sales information amongst all involved parties would be required. This marketing knowledge can then be presented on a customized online dash board and universally shared for the company’s overall benefit.
Measuring social media network investments to sales and revenue is really as easy as 1, 2, 3.
The major challenge will be getting three senior level corporate managers to put their egos aside and work together in unison to close the measurement loop.