Selecting Relevant Key Performance Indicators for Assessing Social Media Success - By Ritesh Gupta

The lack of social media ROI standards unsettled many marketers and even organisations on the whole, preventing any form of experimentation, in the last few years. But with companies, including ones from the travel sector, starting to measure the social media ROI in several ways - be it for setting up their own metrics to working on monthly reports to evaluate exposure and revenue generated through such efforts -  social media marketing is becoming an integral part of Internet marketing.
 
From queries like “Why should I be concerned about social media and how will I benefit from social media elements?” to follow-up questions like “How should I go about optimising for social media and measure ROI?”, which were asked quite often earlier, the hospitality industry seems to have made steady progress in this arena.
 
There might not be many meaningful financial metrics with social media efforts, and the industry seems to have accepted the same, looking up to assets like fans, re-tweets, site visits, video views, positive ratings etc. in a positive light. 
 
A couple of months ago, Forrester recommended a traditional measurement approach for innovative social media marketing programmes.  Using a Social Media Marketing Balanced Scorecard, marketers can evaluate a diverse set of short- and long-term benefits that are both financial and not.  This approach furnishes several benefits, such as aligning measurement to all corporate objectives and not just sales, providing a means for gaining consensus from diverse stakeholders and avoiding short-term gains at the expense of long-term brand health.
 
An affective Social Media Marketing Balanced Scorecard considers metrics from four different perspectives:
 
1. Financial: Has revenue or profit increased or costs decreased?
2. Brand: Have consumer attitudes about the brand improved?
3. Risk Management: Is the organisation better prepared to note and respond to attacks or problems that affect reputation?
4. Digital: Has the company enhanced its owned and earned digital assets?
 
Marketers who only seek to measure results in one of these perspectives get an incomplete picture and, as a result, are unable to make effective decisions about social media marketing investments.  It is only by recognising all of the benefits delivered by social media marketing that the complete value of these efforts can be understood, according to Forrester.
 
But to reach to out this stage, one has to start on a strong note.
 
From a hotel’s perspective, Barbara Pezzi, Director Analytics & Search Optimization, Fairmont Raffles Hotels International, says the first step should always be to establish your business goals, before you even look at a dashboard.
 
“You cannot start measuring, if you do not know what is it that you are trying to accomplish. Once you have set out your business goals and strategy, you can select the relevant key performance indicators (KPIs) which will then be tracked to measure success,” said Pezzi, who isscheduled to speak at the forthcoming Social Media Strategies for Travel USA 2011 conference, to be held in San Francisco next year (March 2-3, 2011).
 
In order to know more about social media ROI, EyeforTravel’s Ritesh Gupta recently spoke to Pezzi. Excerpts:
 
Firstly, a section of the industry still says social media as an effective customer service and sales platform has yet to be proven, because it is still in its infancy, and the true effectiveness of this powerful channel has yet to be fully developed by travel distributors. Before we talk of RoI, what do you make of this assessment?
 
Barbara Pezzi:
 
I don’t quite agree that social media is in its infancy. It has now been around for a while. I would however say that some companies have been using it for longer or more effectively than others. Many companies incorrectly assume that they can just set up a Facebook page, without a strategy or dedicated knowledgeable resources in place, and fans will follow. It actually takes time and commitment. Its effectiveness is tightly related to how it is being used, rather than any inherit fault with the channel itself.
 
What should one keep in mind before going about optimising for social media and measuring ROI? 
 
Barbara Pezzi:
 
The first step should always be to establish your business goals first, before you even look at a dashboard. You cannot start measuring, if you do not know what is it that you are trying to accomplish. Once you have set out your business goals and strategy, you can select the relevant key performance indicators (KPIs) which will then be tracked to measure success. This also does not necessarily mean that it is only about revenue and that for example your Twitter main KPI should be to generate x amount in sales every month. One should take into account the revenue opportunities as well as the potential savings. For example, a KPI could be to generate a certain amount of quality media mentions which would equate in certain amount of PR value, or to achieve x amount of links with brand related anchor text, which again could easily be monetized in terms of SEO savings. The KPI selection might require some creative thinking, but I personally believe this is an essential part of the planning process each company should go through before they even create their Twitter/Facebook page.
 
Which according to you is the best way to measure the success of social media efforts – Awareness, Conversion, Relationships (how much interaction and who is initiating) and Engagement?
 
Barbara Pezzi:
 
Definitely not by obsessing about the amount of followers or fans.
 
The metrics and KPIs will be related to the chosen business goals. There are some “standard” metrics like conversion rate or number of retweets by 100/1000 followers, but in most cases each organization will need its own unique list of metrics. The goal is not measuring for the sake of measuring or reporting, but to gain actionable insights to help you achieve your business goals. There are 3 main types of metrics: Revenue/Business Development (sales, average order value, request for proposals, etc), Cost Savings (recruitment savings, online media mentions vs PR agency fees, online customer support vs call centre fees, etc..) and then a set of typically qualitative metrics, be it share of voice, brand awareness, NPS (Net Promoter Score) and so on, which should ideally be benchmarked before you start your social media efforts, for pre/post comparisons. The latter group is very relative. If you cannot measure your NPS, focus on what you can measure and makes sense to you, based on the tool and resources you have available.
 
It is imperative that the hotel has presence in all these channels to dominate the search engine results page. Search Engines give higher relevance to businesses connected through different social media channels resulting in higher placement in search engines. How do you assess the investment in social media from overall search marketing initiatives perspective?
 
Barbara Pezzi:
 
I wouldn’t embark on social media with the sole purpose of improving my rankings on Google. There is a certain correlation between online popularity and search engine rankings, but that is not the main point. Social media and SEO (search engine optimization) work beautifully together. Social media can be a very valuable keyword research source. For example, there are tools out there (free as well as paid ones) that will generate a word cloud on all tweets containing a specific hash tag, which can then be analysed to identify potential new keywords related to your brand or your business.
 
Sharing content on Twitter or Facebook, can result in links from other sites. Strong brand exposure on social media sites can increase clickthrough rates on search engine campaigns.
 
Organic traffic will land on your site and then possibly follow you on Twitter as a result. Both channels complement each other and if you can manage both, then it is one of those cases when 1 plus 1 equals 3.
 
Hotels can integrate Google Analytics code on Facebook pages, blog pages and track the activity on these channels. How do you assess such efforts?
 
Barbara Pezzi:
 
One of my favourite quotes is “If you don’t measure it, you cannot improve it”.  As long as time, money and effort is required to build and maintain something, then measurement should be in place. How are you otherwise going to know, what is working and what needs tweaking or changing.
 
What do you make of sophisticated social media and reputation management software?
 
Barbara Pezzi:
 
I think such tools can help in automating some of the monitoring process, which can be very manual and time consuming. However, even the most sophisticated and expensive tool becomes useless if there is not a human being on the other end who can actually analyse the results and act on it. Data is easy to collect and reports are easy to produce. The hard part is interpreting the data and translating it into an actionable strategy that makes sense to your business. No tool in the world can do that for you. They can just simplify the process.
 
Social Media Strategies for Travel USA 2011
 
Barbara Pezzi is scheduled to speak at the forthcoming Social Media Strategies for Travel USA 2011 conference, to be held in San Francisco next year (March 2-3, 2011).
 
For more information, click here
 
Or contact:
Gina Baillie
VP Global Marketing & Events
EyeforTravel
London, UK: +44 (0)207 375 7197
[email protected]