I live in a small house in San Diego. We have just enough room for a small 4X6 raised bed garden.
I’ll get to the connection with Social Media in a second, but stay with me.
Because our garden is so small I have to assess the value of every little veggie I plant. I need to know if it will grow and, if it does, whether we’ll eat it. Some things like tomatoes and peppers are home runs. Things like watermelons, not so much.
Sorry about the cheesy metaphor comparing business to a garden, but the comparison has merit. Business owners need to know if their strategies are peppers or watermelons– especially when it comes to Social Media. They need to know if their efforts are bearing fruit.
I use a simple equation to determine the effectiveness of my efforts:
Value = B – (2T + C)
I’ll break down the variables below, but here’s a quick key.
B = Benefits
T = Time In
C = Cost
B = Benefits
In other words, the value of an activity, whether in my garden or my restaurant, is equal to the benefits reaped minus the sum of the cost and time invested.
Think about this equation vis-a-vis your Social Media activities. Think about the interactions you’ve had with your guests using social media. What is the net sentiment of those interactions? Is it a positive or a negative?
Are you managing your online reputation effectively? If so, the answer should be “positive”.
Regarding the above equation, you should count an insane amount of positive sentiment as +100 benefits (B), and tons of negative interaction as -100 benefits (B).
What other criteria should you be using to measure the B portion of the equation?
I wouldn’t use fan and follower numbers on Facebook and Twitter as benefit criteria. These numbers are important in many ways, but they represent potential benefits, not current benefits.
Things like media click through rates (CTR), and CTR from sites like Yelp are a better guage of how effective your various marketing campaigns are.
To measure these, subtract the previous month’s numbers from the current month’s numbers and divide by the previous month’s numbers — in other words, calculate the percent growth/decline in CTR this month. Now throw away the % symbol and add it to the number you had from “sentiment.”
My number for this month is +150.
T = Time In
You’ll notice in the equation that I’ve double the importance of “time in.” In reality I feel like this should be a factor of 4 or 5. You need to determine what your time factor is. The bigger the number, the less likely you’ll want to invest your time in the activity.
Be honest about the time you’ve invested in your social media campaigns. Don’t throw out things like sales calls or account setup. These may be one time events, but they will give you valuable insight into how much more efficient you can be with your time.
Remember the one thing you have the most control over in this equation is T. You will improve your skills, and become more efficient with practice. You may decide to hire out some aspects of your campaigns. You may use talent within your organization for various aspects of your social media strategy.
Whatever the case, T is how you control the equation. If, at the end of this exercise you find you self with negative Value as a reward for your efforts then you should look to adjust T accordingly.
Take the number of hours worked and plug it directly into the equation. You can compare this to your hours worked from last month, but for this exercise I recommend just using the absolute value.
My number for the month is 15.
C = Cost
Cost is the total amount of dollars you spent over the course of the month on social media marketing and outreach.
Take this a percentage as compared to your cost from the previous month. Drop the percentage and plug it into the equation.
My number for the month is 90.
Calculating Value
So using my numbers from above.
150 – (30 +90) = Value
Value = +30
So my social media strategy is producing positive results! Which is great, but I will probably return to the Time portion of the equation and tweak things a little bit, to squeeze out some more time for me!
These are not numbers you are going to present to your board. But they provide a way for you to measure your efforts and help you to revise your strategy.
We hope you are able to do the same. Continue to track this number every month an you will have a great tracking tool for the effectiveness of your social media strategy.
Also be sure to check out our Ebook “Six Steps to Improving Your Online Reputation” for some awesome tips on improving your social media effectiveness.
Wow!