Social Media Metrics – Driving to Value

We’re members of the Online Community Research Network and recently received the latest report on Community Metrics derived from a survey of the membership. While we’re happy to see a lot of progress in the responses about tying measurement to business objectives, we continue to see confusion about measuring value. Over the past ten years, we’ve developed a methodology that can help online community and social media managers structure their reporting in order to focus on the value their efforts produce in terms of business objectives.

Looking  at the report’s question #12 (Were your community’s metrics created in support of your organization’s broader business goals or were they created independent of a corporate business?), the following responses were given:

• 47% Created to support existing business goals
• 31% Created independently but helping refine existing business goals
• 22% Neither of the above (summarized from three additional responses)

Looking at what metrics the respondents use to support or refine existing business goals provides insight into the confusion over what constitutes value in online community and social media efforts.

Question 19 asked “What are the three most important community key performance indicators (KPIs) in the reports you send to upper level management?” The answers are a startling contrast to the answers to Question 12:

1. Number of Page Views or Clicks
2. Number of Site Visits
3. Number of Unique Visits

Why are these responses startling? Because the metrics are traffic metrics not value metrics. These are base level metrics not KPI worthy metrics for upper level managers. (In fact, three of the top five metrics measured as detailed in an earlier question were traffic metrics too: Unique Visitors, Page Views, and Visitors. Only two were not: Registrations and Posts.)

What these two questions’ responses demonstrate is that the respondents are still struggling with determining value from their community work that truly builds into measurable business objectives.

When asked about ROI, 71% of respondents confused engagement and traffic metrics with value. Only 29% correctly identified a tangible value metric to use in measuring ROI.

To provide a little clarity in reporting metrics, let’s look at how Impact Interactions’ reporting methodology can help. First, our categories are structured as follows:

• Traffic - The basic building blocks that measure “How Many?”
• Behavior – The second level of metrics measuring conversion and engagement
• Value – The highest level of community metric where the activity has an economic or dollar value associated with it (This is what management really cares about!)

Some of the actual metrics that we use for clients are as follows:

1. Traffic - Unique Visits, Unique Visitors, Page Views, etc.
2. Behavior- Page Views/Unique Visit, Page Views/Unique Visitor, Active Members/Unique Visitors, New Registrations/New Unique Visitors, Total Registrations/Total Unique Visitors, Downloads/Registered Member, Content Added/Registered Member, Content Added/Unique Visitor, Downloads/Unique Visits, Full profiles completed, Referrals from Twitter/Facebook/YouTube, etc.
3. Value – Number of successful customer support resolutions in the community, Total Contact Sales Inquiries/ Total Unique Visitors (or Registered Members), Total Leads Qualified/Generated, Product Referrals, Positive Product Reviews as a % of Total Product Reviews, Direct Revenue Generated from Community Activities, Length of Sales Cycle for community member vs non-member, Average Purchase Size/Frequency for community member vs non-member, etc. 

Take a look at those metrics again. The first two categories of Traffic and Behavior can usually be obtained using the platform’s tools (like Jive, Telligent, or Lithium) or through your web analytics’ tools (like Google Analytics, Omniture, or WebTrends). The Value metrics take a little more work. In fact, to really be able to perform a realistic ROI calculation, you will need to get help from outside the community/social media area of your organization.

To derive an ROI related to marketing objectives from a community, you’ll need to access your CRM system. For a support ROI, you’ll need to know the cost per interaction in complementary/competitive areas such as a call center. The standard tools won’t get you there, you’ll have to build relationships within your organization in order to really build a solid analysis that ties back to business objectives. An ROI model built on traffic will contain far too many holes to be useful.

We’ve been helping our clients with these issues and have developed a strong set of best practices that can help you succeed in your reporting. Please feel free to share your insights into this issue and ask questions about reporting and analyzing your community and social media efforts. We’re happy to answer them and help reduce the confusion.