Companies have different approaches to use social media tools: for management, advertising, public relations, research and development, customer service or for recruiting. However, companies are faced with problems when measuring their online activities. A simple analysis of the number of fans or followers is often not enough because there is no correlation to company relevant performance indicators. Fiege gives a simple solution for this problem. They transfer the concept of the Balanced Scorecard to the Internet.
The concept of the Balanced Scorecard
The Balanced Scorecard method seems to be a little outdated. It was developed in the beginning of the 1990s at the Harvard University. Nevertheless the method has not lost any of its relevance. The Balanced Scorecard is continuously used by more than 60 percent of the DAX companies.
The Balanced Scorecard has a balanced approach in contrast to other methods which only take monetary key performance indicators into account. Besides the financial perspective it also considers customers, internal processes and organisational learning and development as driving forces for the company’s success. Specific operations are derived from the vision and the strategy of the business unit:
Illustration: Four strategic perspectives of the Balanced Scorecard
Source: Own figure based on Kaplan, R.S., Norton, D.P. (1992)
Key performance indicators in social media
Social media platforms offer various analysis tools to their fanpage operators. Facebook, for instance, offers with Facebook Insights a dashboard with key figures like “Total likes”, “Friends of Fans”, “People Talking About This” or “Weekly Total Reach”. There are also similar dashboards on other social media platforms like Google Plus or YouTube. These tools are helpful for a performance measurement within fanpages.
Illustration: Facebook Insights with key figures
Source: Facebook 2013
Apart from platform specific indicators, there are also independent key figures, which are generally used as performance indicators in social media. The indicator “Share of Voice” describes the portion of conversations about the own brand in relation to the competition. The index “Sentiment” is the relation between positive or neutral mentions and negative mentions about a brand. The indicator “Advocate Influence” measures the impact of a positive mention about a brand in relation to all mentions about a brand on the web. The “Idea Impact” is also a significant indicator, which describes the relation of mentions about new product or customer service ideas and the total amount of mentions about a brand.
Classification of key figures into the Balanced Scorecard
The particular art is to choose relevant key figures from a wide range and to classify them into the Balanced Scorecard. The following table may illustrate this procedure with the help of four simple examples:
Table: Linking of indicators with strategic perspectives of the Balanced Scorecard
Source: Own figure based on Fiege, R. (2012)
Starting from the objectives, specific operations for every single perspective of the Balanced Scorecard need to be established. Indicators makes the success of the specific operations measurable.
Correctly applied, the Social Media Balanced Scorecard of Fiege is an entirely useful instrument for the clarification of online strategies and a helpful approach to integrate social media campaigns into the corporate strategy. It is also helpful for the analysis and measurement of social media activities.