By Rosemary Plorin
Measuring a company’s success is rarely a one-dimensional process. Bottom line numbers are still important, of course, but a company’s success in a global economy and a virtual world is no longer defined strictly on a numbers basis.
The changing demands of both shareholders and the public combined with the importance of social media means that business leaders must blaze new trails to achieve success and find alternative methods to assess results. PwC’s recent annual CEO survey found that CEOs are concerned with not only the traditional drivers of success, such as risk and innovation, but also the more emotional aspects that revolve around purpose and values. Clearly, respondents recognized that our rapidly changing business environment requires new measurement tools.
How to Measure Business Impacts on Society
Most companies publish financial reports. Increasingly, however, companies also report the company’s environmental impact, methods used to promote sustainability and an outline of ongoing environmental initiatives. Shareholder and public concerns about climate change, air and water pollution and rising sea levels have led to an increasing emphasis on a corporation’s impact on the earth and in the community.
Other new measurements of business success include a corporation’s participation in social investment, workforce diversity, improved working conditions and promotion of a high quality of life. Ethics is another area of greater importance as businesses become more transparent. CEOs who can focus on both financial and nonfinancial corporate performance facets improve shareholder value in the long term.
Taking the Measure of Social Media
Social media success — how can it be measured? Marketing professionals have long espoused that using social media can help build a loyal customer base. The science and measurement of social media is bearing that out. AdWeek reported last year that nearly 81 percent of consumers research online before buying. Three in five businesses gain new customers through social media. Another 57 percent of small business sales funnel through social media. But, how do you know if your own social media efforts are paying off?
If you already use social media or are getting ready to jump in, consider the following:
- Who is your target audience? Social media provides an easy way to reach a targeted audience as long as you know who that audience is. What demographic is most likely to buy your product or service? You can target age groups, gender, residents of specific locations, those with defined careers, interests, educational levels and/or incomes. As has always been the norm for effective marketing, be specific about who you want to reach and choose the platform that delivers your core audience.
- Which platform best meets your audience demographic requirements? Each social media platform reaches a different segment of society. For example, Facebook has the largest number of users with a demographic mix across the board, from virtually all age groups and income levels. Twitter on the other hand, has a user base that is predominantly 49 years of age or younger, with slightly more male users than female. The majority of Instagram users are under 29 years of age and females outnumber males. LinkedIn members are typically 30 to 64 years old, have a college degree and are split evenly between men and women. Pinterest users are overwhelmingly female with varied educational and income levels. Choose one or two platforms with your targeted audience and focus your efforts – and measurement – there.
- What is your social media objective? Will you use social media primarily for customer service? Are you looking for user-generated content, such as testimonials and reviews? How often do you plan to publish content? Do you have a team in place to take on the responsibilities of monitoring and responding to social media posts? What are your goals? Create goals you can monitor, such as increasing the number of likes on Facebook and how many people visit your website from a social media post.
Measuring Content Distribution Success
Content is king, right? Right. But the challenge of measuring the success of a content management and distribution marketing campaign is that the usual measurement tool, Return on Investment (ROI), doesn’t work for digital content. ROI is based on a formula that demands initial investment provide a measurable return. Content distribution, along with most digital marketing segments, is focused on brand awareness and customer engagement, and not necessarily on transaction.
So while a well-managed content distribution campaign increases awareness, it may not directly provide a measurable financial return. A more accurate measure for content is the Return on Advertising Spending (ROAS) formula. The beauty of ROAS is that it analyzes the revenue generated from every marketing dollar spent and matches it to a specific channel (direct mail, social, outdoor, search. etc.). Though ROAS does not factor in how one channel impacts another, it facilitates an interesting (if siloed) analysis how marketing dollars are spent in a tactical sense and provides a helpful tool in measuring a company’s overall success.