Social Media Metrics that Matter Most for Small Business
By: John Rossheim
Metrics, metrics -- with so many ways to slice and dice social media metrics (from the basic “number of clicks” to more complex abstractions like “level of engagement”) how can small businesses confirm the effectiveness of their social media?
In order to get the maximum return on their social media investment, small companies must move beyond celebrations of vanity-data milestones such as 1,000 fans or 10,000 “likes.”
The real challenge is uncovering actionable business insights that will analyze the behavior of buyers and prospects. Here's how to get started.
Clicks per social media platform. “Given that small businesses have limited resources and time, the number of visits to each social network is crucial to see where they should focus,” says Adam Root, CTO of HipLogiq, a marketing technology firm in Dallas. Beyond this, you should track how many website visits, leads and customers each social platform is generating, according to HubSpot.
Engagement. Conversions that yield revenue may be the ultimate goal of social marketing, but like a good salesperson, you've got to get the conversation going first.
“Eighty percent of small-business social media activity ought to be about building relationships,” says Paul Rand, author of Highly Recommended: Harnessing the Power of Word of Mouth and Social Media to Build Your Brand and Your Business. "You don’t want to be hitting up your fans only when you want them to buy from you.”
An example engagement metric: Your Facebook engagement rate on a given day is the sum of likes, comments and shares, divided by the number of fans (and by convention, multiplied by 100), according to SocialBakers.com.
Virality. The Internet equivalent of word of mouth, virality is a holy grail of social marketing, the factor that can generate huge return on investment for the rare campaign that spre ads like wildfire.
“What counts is people talking about you," says Matt Stuart, co-CEO of Main Street Hub, a social media management agency with headquarters in Austin, Texas. "Look at retweets, @mentions, and check-ins on Foursquare."
Given the variety of social media platforms out there, going viral often means that a campaign jumps from customers to prospects, from one social platform to another, and so on. So measuring virality can be complex and may require a substantial investment.
Google Analytics. With these tools, including Google conversions, the search giant offers a treasure trove of tools for websites and social media for small business.
Though Google Analytics is used by about half of the 10,000 most-visited web sites, it's not the be-all and end-all of Internet statistics, let alone social media metrics.
"We do use Google Analytics, and we use Google adwords to acquire users,” says Stash Karandanis, co-owner of East Sandwich, Mass.-based Tackle Grab, an online seller of bait and tackle by subscription. “But we’ve found Adwords are nowhere near as effective as Facebook. And although Twitter and Pinterest cost less to use, they get fewer conversions.”
Conversions. “By using tracking codes in links posted on social networks, you can track a click all the way to a converted goal in Google analytics,” says Root of HipLogiq. “By monitoring your conversion rates of those goals you can measure the return on investment and place more resources toward top-performing campaigns.”
How you qualify “conversions” is up to you. They can be measured in purchases of goods or services, leads for long-term contracts, or even just delivering eyeballs to a web site.
Offline mentions. Many small retailers and service providers won't capture all conversions if they don't ask customers what brought them into the store.
“My Yelp is so huge, that’s what giving me a big increase in business,” says Gary Schaller, co-owner of The Car Doctor, a car repair shop in Mountain View, Calif. “In August, we did almost $15,000 in business from Yelp,” he adds. Schaller wouldn't have that insight if he and his staff didn't ask each new customer how they heard of the business.
Cost of customer acquisition. Most social media platforms and many monitoring tools are free or very cheap, so it's tempting for business owners to think of social marketing as a can't-lose proposition. But you should calculate expenses such as the cost of time spent responding to customers, designing and implementing campaigns, and so on.
Still, social media can be a very cost-effective way to win new customers. “Pinterest and Twitter lower the cost of our customer acquisition, which had been a problem,” says Karandanis of Tackle Grab.