How to Measure the Financial Value of Your Social Media Strategy

Blog-6

Did you know that many companies have trouble measuring the actual value of their social media strategy?

Did you know that getting an accurate ROI figure is not that difficult with the right tools?

The minimal forms of methodologies commonly used to evaluate the impact of social media campaigns in financial terms forces organizations to employ suboptimal marketing strategies without ever realizing that they are wasting valuable resources. Companies could be using more effective strategies if they know how well their social media efforts are performing.

The essence of social media as a stage for consumer interactions and influence has a largely direct impact on brand’s communities. Social media envelopes a higher response rate and client engagement compared with traditional marketing practice focusing only on the company-consumer relationship.

What are the Elements of Social Media Success?

By creating the right mix of marketing strategy, social media technology, and refined modeling, you will be able to experience and measure the success of marketing through social media. This combination will produce, improve, and spread the brand’s identity. Also the right approach will inspire a brand community association between consumers, while bringing the brand advocates to the forefront. The right approach will help you reach potential customers through the existing ones, and much faster than traditional word of mouth.

The key component is to relate common social media measures such as comments, shares, conversations, mentions, likes, and other social signals to financial metrics by analysis of the impact, and the role, of the influence in the purchase decision. It is up to the business marketing and social media strategy to use comments, shares, and conversations to influence purchase decisions, along with other social signals.


How to Measure the Buzz

Social metrics are used demonstrate changes in buzz, which result from your social strategy, and the changes to monetary gain. This is accomplished by creating a CIE and CIV framework to help identify the effects of various member’s influence impact through ‘word-of-mouth’ marketing. This framework provides marketers a procedure to measure the viral effect of the generated word-of-mouth on social media, by measuring the weight of influence that each customer has in terms of the capability to spread word-of-mouth through various connections and networks.

What is the Fundamental Social Media Recipe?

The social media strategy consists of 3 phases: (1) The research stage, which is comprised of market research to get an appreciation for the possibilities of the particular social media penetration of the situation, and also, to identify the ideal social platform to use. (2) The pretest stage is when the flow of ‘word-of-mouth' and influence are both measured in reference to different message layouts to control for the effect of “tone” and use of “language”. This is similar to calibrating measurement tools for accuracy. (3) An implementation stage, which consists of multiple campaigns that are geared to stimulate ‘word-of-mouth’ and track resulting changes in sales.

The ‘consumer influence effect’, measures the ‘generated buzz’ and ‘consumer influence value’ measures the monetary value of the influence for any given user.


Social Media & E-Mail Marketing CTA

 

How is Word of Mouth Measured

To measure the impact of word-of-mouth in social media, it is important to understand and study how the information flows through the targeted network. This is done by calculating the ‘consumer influence effect’ of specific individual users. Then, sales data, which describe the purchasing behavior of each user, is then combined with the ‘consumer influence effect’ metrics to obtain the actual value generated by users. This is called the consumer influence value.

If you are wondering how this is all done, here are the steps:

  1. The historical data is used to pin-point the influencers, which is done by studying the social network data and the directional flow of word-of mouth.
  2. A match between the kind of information and the influence that each individual has on others was calculated.
  3. Based on this calculation of influence that each user has in step 2, the influencers were identified.
  4. During the run of multiple campaigns, influencers are encouraged to talk about your product. One method to accomplish this is with incentives, such as free clothing, totes, coupons, discounts, and many other items relevant to your industry consumers.
  5. The incentives are given to the top influencers with maximum effect and value.
  6. The results get analyzed and the performance of the firm after implementing the campaign metrics are measured.
  7. The Stickiness index also measures how much of the messaging is related to relevant topics to determine what users have in common. For example, if users talk about similar topics and items, then they will be more attractive to one another and have a higher influence so their Stickiness Index metrics will be higher.

Analysis of Target Markets

Target market can be determined by analysis of how many people are talking about a certain topic. Software can be built custom to your needs to track user networks throughout all the social media channels, along with the strength of their influence.

The same software, such as that used with twitter, collects and archives conversations, positive or negative word of mouth, and it can be used on the social network related to any specified topic. The most important decisions is to choose the right developer to create your software for the right purpose.

What Should I know about the Viral Effect?

It important to consider that users do not have a directly immediate association with each other and also that they were connected through 4 degrees of separation. These factors ensure that word of mouth does not get limited to groups within a small network.

The actual measure of ‘word-of-mouth’ is the number of times the message is passed on (degree), the number of connections that the message jumps (depth of influence), and number of comments and replies received for each message (engagement impact). Personal and referral messages maximize the spread and influence of a message because people trust those who they are closer to.

One important thing to consider in maximizing the spread of a message is “Minimal Conscious Processing”, which is important to minimize the barriers to getting a message to other users. Make it easy for them to move the message without any thought to the actions.

The ‘consumer influence effect’ metric, as a standalone, can be used to quantitatively measure the degree to which messaging can spread from one specified user of social media. This metric is useful for viral marketing. For example, marketers can strategically publish a YouTube video to a group of high ‘consumer influence effect’ consumers to increase the spread of the content in a specific period of time.

Once you identify the influencers and generate a viral spread of the information, the next step is to measure the actual financial value of this influence.

What are your favorite Apps and Software Tools to maximize your viral marketing reach?

Editorial credit: Twin Design / Shutterstock.com

 

Social Media & E-Mail Marketing CTA

You've come down this far for a reason.