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