How do marketing and online public relations professionals build a case to support social media? Looking at the bottomline of sales is one way, but certainly not the most effective way. In his Forrester report, The ROI of Social Media, Nate Elliot points out that social media has matured. It is time that our metrics also “grow up” to account for values delivered by social media in addition to and beyond the financial. With the mindset that social media delivers results that are more substantial than ROI, Elliot proposes a “balanced social media scorecard” that looks to an array of qualitative and quantitative perspectives to derive more relevant analytics including:
– Risk Management
Elliot argues the measurements should be aligned to all corporate objectives not just sales objectives. By applying the balanced social media scorecard, brands can determine ROO (Return on Objectives) vs. ROI and finally understand the full value of social media efforts.
The Financial Perspective
The so-called true ROI, can be measured in:
– Improved response rates with social-enabled commerce
– Increased sales
– Savings from decreased returns
– Other costs eliminated by use of social media such as fewer live consumer conferences, an can look to media mix modeling to ascertain social media effectiveness on sales vs. other media such as television.
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The Brand Perspective
Measured by traditional surveying methodologies, the brand perspective takes a look at whether the brand’s consumer perspecive has improved thanks to the like sof social media. By first defining objectives then selecting brand attributes that fit those objectives such as awareness, purchase intent, and brand association, customer survey methodologies can be designed to accurately assess social media efforts.
The Risk Management Perspective
This is ROI that cannot be measured but can be valued in terms of the cost of risk mitigation. Elliot offers a formula that serves to quantify the true value in savings that stem from social PR initiatives during a crisis.
The Digital Perspective
Lastly the balanced social media scorecard includes an analysis of the how Digital Perspective complements other perspectives. For example, how does social media impact your search engine relevance and results? And, what effects does social media have on traffic to and beside owned media? Instead of looking to metrics such as clicks, likes, impressions and retweets corporations need to look to the added value social media brings to all digital assets including online visibility whether it is through user generated content or social media influence.
Elliot’s balanced media scorecard represents a needed evolution in the way corporations, marketers and PR practitioners evaluate returns on social media investments. It should serve as a model for modern analytics and replace the single-minded ROI analysis that fails to consider the entire value of social media expenditures.
The bottom line: smart marketers will realize the assets of balanced scorecard of social media that includes a value line item of building a realtionship with a customer before they become a customer. Tweet that, because customers Like that.