Creating A Social Media Value Index

The question of the day is how do you measure social media? It’s the question brimming on every marketers mind as we look at how social media will fit into our current marketing mix. Because let’s face it, if you aren’t looking at social media you might just be left in the dust. So for those of you who are trying to tackle this daunting task, I’ve put together a few tips and a social media value index model that you can use to guide you in the process.

In looking at the #smroi conversations on Twitter recently, one of the big discussions is the ongoing debate of whether or not social media will prove a positive ROI.  In addition, there are many who are using ROI to talk about value rather than an actual monetary return and it is causing confusion about the true value that social media can bring to an organization and how to explain it to stakeholders in a meaningful way.

To get started you need to develop a plan. I’m not a huge believer in the let’s try it and see what happens strategy. Not that you can’t try and see, but the trying it out should lead to a well-defined plan. There are four-steps to creating your plan.

1. Define Goals and Objectives
2. Align Strategies to Meet Goals and Objectives
3. Create Metrics to Measure Success
4. Develop Execution Plan

As I’ve said in my previous posts, I focus on three core goals. Will you use social media to retain existing customers, generate brand awareness and/or acquire new customers? For social media newcomers, I’d be very cautious about starting a social media plan geared towards acquiring new customers. This takes finesse that comes with experience and I’d wait until you’ve mastered the other two before broaching customer acquisition. Once you have determined what your goal for social media is, you can then start to align strategies with those goals, determine how you will measure if those strategies are successful, and put together a plan for execution. I’m not going to spend much time on those areas in this post, perhaps in a future post if readers are interested. Rather, I’m going to focus on how to create a model to measure success and then give you some ideas on different metrics you can use to build your model.

In order to be able to explain the value of social media to your stakeholders I prefer to use Key Performance Indicators as the term of choice.  Mainly because this is a standard term that people are familiar with and you don’t have to do a lot of explaining about what it means.

So here I’ve defined 10 Key Performance Indicators for social media and I ranked them in importance from 1 to 10. Then I assigned a weight to each ranking.

Click here for the full list. Social Media KPIs

Social Media KPIs

Social Media Monthly Worksheet

Then I took the 10 KPIs and put in metrics for how to measure them on a monthly basis. For each one I used a baseline measure of 0-1 either through doing a percent to goal or a ratio. I used a 1,000 point system to determine where I stand on each of the measure and apply the weight to determine how many points each measure received. The actual formula is (Score on 0-1 scale)*(Percent Weight*1000) to determine the number of points that indicator received for the month. To see the full worksheet click here. Social Media Value Index Worksheet

Finally, I took the sum of each KPI score as the total for the Social Media Value Index. This gives you a baseline measure for how the all of your social media activities are performing over time. The closer you get to 1,000 the better closer you are to reaching your goals.

You can chose any key performance indicator that you believe adds value to the organization. You can also choose more than 10 if you like. I chose to use ROI as one of my KPIs, but on its own I don’t think it tells the whole story, which is why I developed this model. Choosing your KPIs may be the hardest part. So I’ve included some ideas of what you can measure below.

Twitter

• Number of Followers
• Number of People You Follow
• Relevance of Followers (I only follow people that are relevant and use a ratio of followers to those I follow to measure this)
• Number of Retweets
• Number of @replies to you/from you (you can do a ratio here also)
• Number of Clicks on Links Posted
• Twinfluence metrics
• Twitter Grade

Social Networks i.e. LinkedIn, Ning, FaceBook, MySpace

• Number of Connections Made
• Number of Discussions
• Number of Comments
• Number of Groups Participated In
• Level of Involvement in Groups

Video Sharing/Live Webcasts

• Number of Monthly Views/Attendees
• Monthly Average of Views/Attendees
• Number of Linkbacks to Videos

There are many more I could list here. Joe LaTona did a really nice job of providing a list to start from in his “What Are Your Social Media Goals” post.

Now that you have your plan it’s time to execute, measure, and refine!

I’m interested in hearing your thoughts on how you are measuring, suggestions you have for refining this model and what you would add to the list of possible KPIs.

If you would like a copy of the excel worksheets used to develop the model please email me at nichole@nicholekelly.com and I’ll send you a copy.

Related posts:

1. Is Marketing Integration Just Another Buzz Word?

Tagged as: Brand Awareness, Customer Acquisition, Customer Retention, Return on Marketing Investment, ROI, Social Media, Success Measures, Twitter, web 2.0