Inform CEOs: Social Media ROI is Measurable!

This Wednesday I attended the Triangle Game Conference which featured a panel discussion on the use of social media for gaming companies. While expressing the passion for social media, the panel of investors and CEOs expressed concerns over the use of social media to market and promote products, a reason being lack of measurement on success, with success majorly perceived as return on investment, or ROI.

This tells me several things. First, in order to successfully including social media in the communication strategy, businesses need to be able to determine whether or not a social media program is moving products or making impacts. Second, the management tends to think that social media ROI is not measurable at the monetary level. Third, the burden of education and operationalization is on us communication professionals. We need to help the dominant coalition understand the value of social media by clarifying the fact that social media success, even when it is defined as ROI, is measurable, and below are a few initial thoughts on how to do that-

1. Well communicate goals and objectives.
It is important to touch base with the management what should be realized with the implementation of a social media program. Is the investment expected to be returned by higher sales, more profits, more leads or otherwise better retention? Knowing what needs to be quantified is the first step to proving a social media strategy is beneficial to businesses. Choosing the appropriate tools to quantify successes though, is another topic I'd like to discuss with my next blog.

2. Measure baseline.
To demonstrate ROI, it is essential to let the number speak. That's how statistic-based metrics comes into play. To ensure the dominant coalition see how much difference the social media makes for the business, a before/after picture needs to be depicted. Thus, we need to not only measure the gain after social media is introduced, but also where the business currently stands at- what is the sales now, how much customer attention we are getting now, etc.

3. Well translate the data.
It is better to provide to decision makers data-driven insights than to provide raw data. Explain with your data how social media help accomplish goals and objectives. For instance, if your ultimate goal is to increase sales, it is important to explicate the correlation between social media use and increased sales with your data- how much more traffic is driven to the e-commerce site after a new Facebook message or new Tweet, and how much increase in sales do you see with that extra traffic?

I believe in the value of having open discussion about how to best measure social media impacts. Ultimately, it is important to let key decision makers see such impacts can be measured beyond ROI. But I tend to believe ROI will always be on their mind, so we can figure out ways to start from there.