Last week I attended a webinar on social media strategy from Radian6. The webinar was hosted by Christopher Barger who is well qualified to present a topic like this with his background in social media consulting and gave an excellent presentation.
During the webinar Christopher asked the group to give their answer to the question, "What is the most effective measure of social media success or ROI and why?" I was anxious to answer the question because I don't always agree with the opinions I hear on ROI and because the 10 best answers would receive a free copy of Christopher's new book.
So here's my answer, noncommittal as it may be:
"There’s no one answer, it totally depends on the business and their goals. If your goal is to drive traffic to your blog then the measure is traffic from social referrals and SERP rankings. If your goal is customer service then it’s # of questions or disputes resolved. If your goal is to drive sales then it’s revenue from social contacts. You have to base your measurement on your goals in social media."
In the world of social media strategy we're getting past the idea that value is measured in the number of followers or likes and account has, and that's a good thing. However, there are still a lot of people that are too quick to tell others how to measure their ROI. They'll say that you can measure based on the revenue generated or the number of interactions on a particular social network. Those answers aren't necessarily wrong but they are short-sighted. The point of my answer to the question above is that you can't tell someone how to measure their ROI without looking at their goals for social.
ROI is important, even (or maybe especially) in social media. There are dozens of reasons to be present and active on various social networks and there are just as many ways to measure ROI. Whether you're there to monitor and steer conversations or drive leads to your ecommerce site the important thing is to start with clear goals and then determine how you'll measure success along the way.
And in case you're wondering, yes, my answer was featured on their blog and I did win a free book. Thanks Christopher.