A good bartender earns repeat visitors by remembering the names and drinks of the regulars, engaging new visitors in friendly discussion, and sharing news and insights about the local scene. It’s not all about how many sales he can make in an hour. There is definitely an intangible “return on chatter” that helps create an image, or brand, for the bar.

To see how being a good bartender is a lot like being a good social media marketer, you have to understand the difference between Impact and ROI.

Impact and ROI
As we’ve discussed in previous articles in this series, clear expectations are critical to your measurement efforts. Olivier Blanchard makes the point about ROI being a strictly financial measurement (vs. eyeballs, clicks, awareness, or any other “soft” metric) when he says, “There is no return on awesomeness.”

KD Paine provides some great examples to illustrate the difference between Impact and ROI in her eBook Tales from the Trenches, How Organizations are Measuring Value in Social Media:

Impact: Did your relationships improve? Were your messages communicated? Did you get the exposure you wanted?

ROI: Did sales or revenue or profits increase? Did the right people show up? Did audience behavior change?

How Impact affects ROI
Even as we need to be clear on the difference between Impact and ROI, we also need to understand how they are related. Blanchard provides a great overview of the interrelation in his post about the action-reaction-outcome narrative. The basic concept is this:

$$$ investment -> action ->reaction ->non-financial impact -> $$$ financial impact

The qualitative benefits of social media engagement live under “non-financial impact,” but ultimately support the goal of financial impact, or ROI. This view of the process demonstrates the role social media efforts can play without clouding the waters around defining actual ROI results.

Measuring Impact
Now that you know what you’re measuring and why, you’re probably wondering how you go about the task of collecting and assessing all the relevant data. Five steps to creating a measurement campaign:

1) Establish socially relevant goals and define the related metrics: Get clear on what you hope to achieve and how you hope to achieve it. As Mark Schaefer wrote, the most important question might be “what behavior are you trying to drive?” Then decide how you think you can measure progress. For example, if your goal is to improve your brand’s image among bloggers, your tactic might be a blogger outreach program that involves one-on-one dialog and support. You might then measure your progress by tracking sentiment across the Web using a tool like Radian 6 or Crimson Hexagon.

2) Create benchmarks: Because you have to know where you started.

3) Choose your measurement tools: This topic could easily evolve into another eight-part series, but I’ll just mention three core categories:

>> Listening: From free services like Google alerts and real-time searches on twitter to high-end listening solutions like those mentioned above, there is a tool for each situation.

>> Tracking: Whether through tools like Google Analytics/Feedburner or manually, tracking things like RSS subscribers, downloads, followers, blog comments, RTs, etc. can add to the overall measurement picture. Alone, they are relatively meaningless, but viewed in aggregate against other metrics, useful trends can emerge.

>> Polling: A traditional technique that is made easy and instant with a number of online tools. If you have an existing digital audience, you can do before-and-after polls on things like customer satisfaction, brand awareness, and so forth.

4) Track your activity in a timeline: In order to correlate social media activity to other, perhaps more quantifiable activity, you need to keep track of what you did when. This will allow you to overlay – for instance – blog posts to Web site traffic, or tweets to Webinar registrations.

5) Monitor, analyze, and optimize: It’s important to realize that, unlike most traditional marketing campaigns, social media campaigns do not necessarily have hard end dates. The social Web is a living, breathing, real-time environment that requires constant monitoring and strategic adaptation. Sometimes it’s less about success or failure and more about ongoing improvement.

So let’s get back to the bartender. How do we best measure his success? A financial measure like sales/hour, or a non-financial measure like increases in repeat customers?

Rather than battling it out over which methodology is superior, marketers should focus on using both. Why not be “metric agnostic” and focus on what the data tell us – whether quantitative or qualitative – and leverage it to our best advantage in highly integrated campaigns that aren’t about “social media,” but about great messaging and smart marketing.

Jamie Lee Wallace is a versatile strategist and copywriter with nearly 20 years of varied experience and a passion for working with clients where business, the social Web, and real life intersect. She also has way too much fun blogging at Savvy B2B Marketing with her five Savvy Sisters.

This is the final part of a series examining social media marketing measurement.

Part 2: Social media ROI shock treatment

Part 3: Irresponsible social media measurement research            

Part 4: Social media impact on brand equity                                                        

Part 5: The most important question to ask in social media marketing     

Part 6: A double standard for social media marketing?                   

Part 7: Yes, it IS about the money!                                                          

Part 8: Creating a measurement plan                                                     

Part 9: Measurement is like a bartender                               

13 Comments

• 

  By Scott, July 30, 2009 @ 11:29 am

  Wow!

  Excellent stuff Jamie. People are paying thousands for this kind of information at the moment so thank you for taking the time out to pass it on!
• 

  By Nate Towne, July 30, 2009 @ 12:23 pm

  I must agree wholeheartedly with Scott, this is great thinking – and for me it could not come at a better time. Clients who focus on ROI are only grasping half the value of social media engagement – you can bet I'll be talking about impact vs. ROI with the client today.
• 

  By Jamie Lee, July 30, 2009 @ 12:36 pm

  @Scott – I'm happy I can be the conduit for helping to spread the genius of people like KD Paine and Olivier Blanchard. I readily recommend that you RSS them both. Being able to share great resources and ideas is the beauty of the social Web. :)

  @Nate – So glad you gained some additional insights today. Good luck with your clients – I hope you can help them see the light!
• 

  By Brett Kopf, July 30, 2009 @ 2:21 pm

  Great post. The question I constantly hear is ROI ROI ROI, how can I make money on it. The steps for measuring impact were very helpful!
• 

  By Jamie Lee, July 30, 2009 @ 3:40 pm

  @Brett – Thanks. As a recovering project manager, I'm all about "steps." :) Have a good one!
• 

  By steve dodd, July 30, 2009 @ 3:52 pm

  Jamie, this is awesome (but everyone has already told you that). There are some great thinkers in this space and the real value is now being realized. Determining ROI is the endgame and there is a process to get there. This kind of information really makes a difference and helps everyone see the reality.
  Thanks!
• 

  By Warren, July 30, 2009 @ 7:03 pm

  Jamie,

  Any post that promotes the work of Olivier Blanchard and KD Paine is pretty awesome in my book. I love the bartender metaphor. Thanks for the shout-out to Radian6. Now, I'll have a cold one!

  Mark, this is a fantastic series.

  Warren Sukernek
  Director of Content Marketing
  Radian6
  @warrenss
• 

  By MARK W. SCHAEFER, July 30, 2009 @ 9:48 pm

  thanks Warren. A big fan of Radian6. Keep up the good work and thanks for taking the time to comment.
• 

  By Ron Hudson, July 31, 2009 @ 2:38 am

  Jamie, there a few people who have the ability to deliver excellent content in such an entertaining manner while also being clear and concise. Thank you very much!

  Warmly
  Ron
  @Ron_Hudson
  @smmtulsa
• 

  By Lil Miss, July 31, 2009 @ 1:48 pm

  I am emailing this around the office. A good way to explain it in one place. Thanks!
• 

  By Jamie Lee Wallace, August 4, 2009 @ 2:08 pm

  Apologies for the late responses, folks … this marketing maven was in Newport for the weekend … seeing how the other half lives (btw – they don't have it half bad!).

  @steve dodd – Thanks for your kind words. I agree that this is a learning process for everyone involved. I'm so pleased to be able to help promote and spread the great ideas of others in the space. Only be helping each other will we take this medium to the next level! :)

  @Warren – LOL. Glad you like the bartender metaphor … hope it doesn't brand me as a barfly! Still – a cold one is always a good thing, right? Hope you enjoyed yours!

  @Ron Hudson – I'm flattered and so glad you enjoyed the post. Thanks for taking the time to comment.

  @Lil Miss – That's what we love to hear – share, share, and share some more. We love sharing great info with our community of readers & look forward to your feedback and ideas as well.
• 

  By Anonymous, August 6, 2010 @ 7:09 pm

  Jamie,

  Really loved your post, and am actually now going back and reading the other eight posts that are linked to this post.

  My favorite part, and something that I strongly agree with is the value of looking at the interrelationship of metrics together over time and measure that against events and actions that you take. For example, if you post a series of videos online and push them across various social platforms, not only are you going to want to know the number of video views, but also you want to know the amount of interaction that they generated, the number of new website visits and followers that they lead to, and other relevant metrics. These are statistics that likely wouldn’t be able to be correlated very well unless you look at them together and over a period of time. Then I think there are real patterns that can be observed and refinement of ones social media marketing strategy can be achieved.

  We would love you to check out our new social media measurement product that we are releasing in a few weeks. Please email us if you would like to join the beta.
  beta@yesreeli.com

  Here is a quick video overview as well.
  http://www.youtube.com/watch?v=eTysIGHiUOU
• 

  By 40deuce, August 24, 2010 @ 4:20 pm

  Jamie,

  I read a lot of metaphors of people comparing social media business to many different things. This bartender metaphor is by far one of my favs. kudos.

  Cheers,

  Sheldon, community manager for Sysomos

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