5 Steps to Evaluating Social Media ROI

touchpoints‘Prove to me social media works!’

That is the cry of many businesspeople when challenged by the hype of Twitter and Facebook. The answer will not come simply from growing social media followers.  Rather, it will come from the effect social media has on expanding and converting your company’s touchpoints. The marketing strategy of every company is to touch their customers, engage them, and move them to a targeted action.  But most companies are not aware of their touchpoints, their effectiveness and why they work.  “Touchpoint Optimization Strategy ” is a 5-step process that tracks the conversion from a one way touchpoint to an “action point” in the customer relationship lifecycle.

Step 1: Listening

Many companies view their touchpoints as one-way, passive listening posts to the voice of the consumer or feedback on the effectiveness of traditional marketing efforts.  Sales and consumer insights measures include surveys, ad test, awareness tracking, contact centers, media tests, customer satisfaction studies, and brand tracking.  However, these listening posts often provided measures that are “time challenged”, needing to wait for the end of a marketing effort before being able to “listen” to the results and gain feedback.

Step 2: Conversing

With the emergence of social media, the measurement response time has been shortened. Social media transforms listening posts into “conversation points.”  Now we engage customers in live conversations on Facebook, online new products surveys, customer service Tweets and Four Square locations posts.   These conversations occurring prior, during, and after marketing efforts can tracked and measured.    They challenge companies to be more involved and responsive, as they provide real time information needed to make adjustments in strategies and tactics. Furthermore, each conversation point can be developed into a relationship and build brand loyalty.

Touchpoint Conversion Lifecycle




Step 3: Converting

At each action point, the company needs to focus marketing efforts to convert the user to specific calls to action: downloading information, answering a survey, requesting a quote, or buying a product.  Effective Social Media Marketing targets these conversation points to be transformed into “action points.”  The Touchpoint Conversion Lifecycle shows the movement to action.

Step 4: Analyzing

The analysis determines which touchpoints are contributing value to the company.  The company must assess:

  1. What data can be gleaned from the listening posts/touchpoints?
  2. What web analytics are critical at each point?
  3. What numbers of touchpoints have been expanded to conversion points?
  4. Which points are resulting in lasting relationships?
  5. What marketing inputs are required to effect different actions?
  6. What is the cost of these inputs?

Step 5: Evaluating

The last step in the Touchpoint Optimization Strategy is to evaluate relative value of each action in terms of developing brand loyalty, thought leadership, reducing operating costs, optimizing marketing budgets, and increasing profits. This evaluation will determine a social media ROI and the most cost-effective mix of traditional, online, PR and social media to achieve the company’s goals.

13 thoughts on “5 Steps to Evaluating Social Media ROI

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  3. Deepak
    Thank you for the comment.Our team is working on developing new metrics for evaluating social media and Integrated Media Marketing (IMM)( see new LinkedIn group) The old ROI was designed for traditional media . It does consider that IMM is synergistic if properly designed and implemented. The results are not a linear. There are multiple inputs of Resources necessary to generate different levels of value for the company. More in future posts

  4. This is the first article I saw that really delved into the details of social media ROI. There is an opportunity for the authors to develop some measurable metrics that can be used by corporations to measure their social media success. I hop the authors find time to work on this subject

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  6. Mary Ann Thanks for your input. We are focusing on developing new approaches to Touchpoint Analysis. In addition we feel that ROI is a term and concept that measures traditional marketing efforts with defined results. Social Media and Integrated Media Marketing (IMM)requires a new metric that reflects the Resources inputted and the Value received by the company. We are launching a collaborative effort to develop this new metric. Welcome your input .

  7. Ira and Bob, I very much like the flow of Listening – Conversing – Converting. The chart is super . . . I look forward to further posts and development of Steps 4 and 5 – Analyzing and Evaluating . . .there are many layers to address here. Very helpful post . . . Best, Mary Ann

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