social media

As retailers rush to experiment with or engage in new forms of outreach to consumers for reasons of either peer pressure, or genuine opportunity (or some combination of both), the measurement of the efficacy of these programs becomes paramount. Never before have marketing executives received so much new budget with so little justification or proven ROI. The urge to spend these new funds before they dry up is compelling. The ability to continue these funds flowing will be completely dependent on proven success.

If the successful exploitation of social media/mobile commerce is in its infancy, themeasurement of the success of these new consumer outreach channels is in an even more embryonic stage. Nonetheless, analyzing success is entirely practical, by using some innovative new methods that apply to the online world of bytes, and repurposing some old ones that are well adopted in the physical world of bits.


Our analytical framework starts with three simple classifications that reflect the various stages of consumer behavior and reaction to our social media and mobile commerce (SMMC) challenge, which all start with the letter T. These are Thinking, Talking and Transacting.

These three Ts can all be influenced by the retailer through SMMC programs, and can each in their own way (albeit sometimes imprecisely) be measured and fine-tuned for success. Even an imprecise measurement still provides guidance as to which programs to accelerate, and which to drop.

Thinking reflects a consumer who is at a stage of interest about your company, or a product (that your company may sell). The consumer is assembling knowledge, rationalizing need, and at the very front end of a purchase decision.

Talking reflects interactalkingtion between consumers who have something to say about your company or product. While Talking has always occurred (one unhappy customer will tell 10 friends who will tell 10 more friends) it has largely been invisible and impossible to measure. Today there are at least some mediums for measuring the volume of talk, and its sentiment.

Transacting is of course where it’s at for a retailer, the ultimate measure of success being a margin rich transaction and a happy purchaser willing to be a repeat buyer.
While retailers are very good at measuring transactions they are not as sophisticated about understanding the causal factors or the consumer purchase behavior behind that transaction.

Measuring Thinking is relatively analogous to established precepts related to branding. Brand image, awareness, and promise are concepts that traditional marketers understand, and through various investments and techniques can influence and measure.

In the world of bits, impressions and recall are good metrics that count. In the online world of bytes, though, we need to add factors such as stickiness and metrics such as page views, search frequency, and click throughs. Conversions can be added to the equation to measure the path between thinking and transacting, which under ideal circumstances can be quite rapid. Cost per click (CPC) and cost per conversion are tools that are available to support the efficacy of efforts that encourage the consumer purchase.

There are few good analogs to Talking in the traditional world of marketing measurement. Consumers will influence each other through the online world of reviews, tweets, comments, Facebook postings etc. These postings can be measured and scored through factors such as volume, frequency and sentiment (VFS). While there aren’t that many great metrics to benchmark against (how many tweet followers, or Facebook “likes” do you have and is that a good number?), there is little question that Talking can be evaluated with steps taken to improve those VFS ratings.

Transacting (or a repeat transaction), of course, is end game and the ultimate measure of success for a retailer. The relationships between thinking, positive talking and conversion to transactions can be evaluated, with conversion rates and cost per conversion being reasonably well understood metrics and concepts.

The three T’s provide a conceptual framework upon which you can establish the kinds of metrics that are required to insure that your spend on SMMC can be fine-tuned to bring the highest benefit to your organization for the dollars you invest. If you don’t measure, how will you know if your programs are working?