Should Your Business be on Social Media?

As I was doing research on my upcoming Social Media Analytics workshop, I came across a blog post by Avinash Kaushik, titled ‘ How to suck at Social Media: An Indispensable Guide for Businesses’.

For those who are new to the Web Analytics world, Avinash is considered one of the founding fathers if you will of web analytics, he has written two very successful books, which all web analysts should read.

He’s a Digital Marketing Evangelist for Google, and his blog Occam’s Razor is filled with so much valuable information for anyone who is interested in web analytics.

To say that I was intrigued by his post on social media was an understatement, as I was about to teach a workshop on how to measure social media presence, engagement and results, I needed to understand why he was making this statement.

So, I read on.

And, I was convinced.

In a way...let me elaborate.

After reading the article, I do strongly believe that the majority of businesses should not be on social media.

The examples given by Avinash in his post are mostly of very large brands and when you start measuring the impact that they’re having on social media compared to the cost incurred to be there, you’ll see that the return on investment (ROI) is very very close to zero.

But does this hold true for smaller business?

Let’s break things down and work at answering the question for your business.

In order to be able to determine if your business should be on social media, we need to understand the numbers.

Avinash, has defined four key metrics to quantify the value of your social media presence. You can read in detail about them in this article.

The four social media metrics as defined by Avinash are:

Conversation Rate
Amplification Rate
Applause Rate
Economic Value

So, what are these metrics and how are they calculated?

Conversation Rate

This metric is the ratio of all your comments and direct messages for your individual social media platforms divided by your total follower count in that platform.

This is important, as it shows you whether what you are posting/sharing is interesting enough to get your followers to engage with you and start a conversation.

Conversation rate = total comments+messages / total followers

Amplification Rate

This metric measures how strong your content is at getting people to want to share it with others. It divides total shares (or re-tweets) by your total followers per post.

Amplification rate = total shares / total followers

Applause Rate

Simply put, this is how much people like your content. It’s not as valuable as the two above, as all they are telling you is that they think its nice, but not nice enough to comment on or share it with friends.

Applause rate = total likes / total followers

Economic Value

This metrics is where the money is at. It’s very much similar to the metric I mentioned in my last week’s blog post, it just goes a step further and assigns a numeric value to your conversions (high valued activities).

For this metric, you’re answering the very important question of ‘How much money are we making from social media?’

Economic value = total revenue and cost savings of your high valued activities on the site from social media

Now that we have the four metrics from which to clearly and easily evaluate the performance of our social media, it’s time to take a look at the numbers.

The first three metrics will be easier to calculate and will give you a very clear indication of how your social media is performing. The last metric requires more effort to calculate, but is very important, I encourage you to not skip it even though it may be more work to get at the number. This metric truly has the final say if you will.