Our recent study of the top companies across several categories revealed that on average just over 80% are using some form of social media.
Yet another study shows that most have not figured out how to calculate a return on that investment. According to a Hypatia Research report, “Benchmarking Social Community Platform Investments & ROI,” only 40% of companies measure social media performance on a quarterly or annual basis, while almost 13% or the organizations surveyed do not measure ROI from social media at all, and another 18% said they do so only on an ad hoc basis. (Hypatia didn’t specify what response the other 29% gave.)
So, although we like to feel that social media marketing is maturing, it seems there are far too many companies that are still throwing ideas and money against the wall and not even checking to see if it sticks!
Those that are measuring performance rate customer satisfaction as #1, followed by customer retention (14.3%), brand reach and frequency metrics (9.4%), number or quality of leads generated (9.2%), Net Promoter Score (8.4%), and customer service center cost reductions (8.4%). The authors noted there is room for debate on whether the Net Promoter score belongs on this list, since it is a survey-based metric of how likely customers are to recommend a company or its products, measuring probabilities rather than actual performance. And I would agree with that. Measuring actual sharing and recommedations would be more effective.
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The cmbpulse study of over 1,500 consumers by market research firm Chadwick Martin Bailey and iModerate Research Technologies found that 60% of Facebook fans and 79% of Twitter followers are more likely to recommend those brands since becoming a fan or follower. And an impressive 51% of Facebook fans and 67% of Twitter followers are more likely to buy the brands they follow or are a fan of.
If you do a strategy`before you start, and you set very clear goals with metrics attached, measuring the ROI will not be impossible. In fact, it will be really easy.
Check out how to do a social media strategy and the steps you have to take before you set your goals and metrics.
Image credit: Mad Hose Photography