Have you ever calculated the ROI from your Social Media?

Social Media irrupted in our life some years ago, however no one was expecting such a huge increase of data. But what is more important is the relevance this data has achieved to business management in areas such as Business Intelligence, Response Management Users or Customer Service.  

Considering this situation, a few practical question emerged: in which department should we integrate this area? How do we measure the cost of this source of data for our organization? And the ROI? In this post we are going to answer some of these questions:

A new source of information always means a cost for the organization: opening accounts in most of the social media platforms is free but managing them and extracting the data requires human resources and that translates in to costs. As each cost ideally needs a way to ROI, how do we measure the ROI for Social Networks? The complexity of this task is recognized by all industry players: according to Gartner half of the companies are throwing money at Social Media.

How do we measure the ROI? By following the next steps:

  • First step: measuring the total cost by considering the tools used and the payrolls from the specialized personnel.
  • Second step: measuring the immediate return in any possible form: The basic measure in this step is the number of reviews _including tweets, comments_. From this rate we can extract other metrics such as number of sources used, number of followers etc.

By dividing the cost by the comments analyzed we obtain a ratio that allows us to understand why the manual for Social Network Analysis approach is so complicated. An analyst can manually process a maximum of one thousand comments per day and per person. With these figures, it is very expensive to cover an online presence over for example three thousand comments a day. This is probably the reason why most organizations have adopted automating the analysis of social networks.

However, something very important is to notice that automation does not mean excluding people from the process, is to employ them in high added value tasks as: thinking and proposing ideas and solutions.

But if automate the analysis is because human reading is very expensive… How do we know we are automating the analysis in a reliable way?  Based in our experience with the market we can say there is no best tool than random manual checks.

Therefore, we need to include an additional step while calculating the ROI: ensuring that the reduced cost by post produced by automation is not generating risk and worsening the results.

Nevertheless in our opinion ignoring all the data coming from social networks can harm the results more than little mistakes in automation analysis.

  • Third step: calculate the ROI comparing the information extracted from Social Networks with the one obtained using traditional methods such as surveys, focus groups etc.

For example, we can compare results obtained in social networks, on any subject, with the results obtained using standard and well established methods. You could compare valuable data about your customers using Social Media analytics together with user surveys or quality control procedures. What is cheaper, or faster, or easier to monitor live? The answer to these questions will give you clear information about whether you are getting a return on investment out of your work with social networks.

Do you want to see how easy is to extract and do automatized analysis from your Twitter data? Download our real case:

 

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