Nowadays we live in a constantly competitive environment. A key of being successful is to monitor the effectiveness in carrying out macro and micro targets of the company. For a modern leader, it is important to be able not only to quickly solve emerging problems, but also to prevent them in a timely manner, directing business towards new opportunities and favorable development prospects.
One of the modern effective management tools is the automated performance management system of the company, as well as its divisions and employees, considering the strategic goals set for the company for a specific period of time. Peter Drucker accurately noted that “what gets measured gets done” (Shore, 2019). Thus, one of the most effective measurement mechanisms for business purposes is Key Performance Indicators (KPIs). Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward an intended result. KPIs provides a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most (“What is a Key Performance Indicator (KPI)?”, 2019). Managing with the use of KPIs includes setting targets (the desired level of performance) and tracking progress against that target.
In other words, KPIs show what is important for a company at this point of time; they help to reduce risks, to make long-term and short-term decisions. A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives (“What is a KPI? Definition, Best-Practices, and Examples”, 2019). Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the enterprise, while low-level KPIs may focus on processes in departments such as sales, marketing or a call center.
There are different types of KPIs. They include: Quantitative indicators (that can be presented with a number), Qualitative indicators (that can’t be presented as a number) Input indicators (that measure the amount of resources consumed during the generation of the outcome), Process indicators (that represent the efficiency or the productivity of the process), Financial indicators (used in performance measurement and when looking at an operating index) (Walczak, 2019).
- Quantitative indicators that can be presented with a number.
- Qualitative indicators that can’t be presented as a number.
- Input indicators that measure the amount of resources consumed during the generation of the outcome
- Process indicators that represent the efficiency or the productivity of the process
- Financial indicators used in performance measurement and when looking at an operating index.
Social Media
Technological advances continue to expand connectivity and communication, greatly assisting in social media business integration. Social Media are forms of electronic communication (such as websites for social networking and microblogging) through which users create online communities to share information, ideas, personal messages, and other content (such as videos) (“Definition of SOCIAL MEDIA”, 2019). Social media could be defined as means of informing and communication that allow people to share information on the Internet using an electronic device (“What is social media? – Definition from WhatIs.com”, 2019).
I would like to start with a brief analysis of how social media affect all the spheres of human’s life: culture, politics, mental health, economics.
Technological leap has definitely exposed the world into diversity. It has become so easy to express yourself, a person can become popular in 10 minutes by one click. The Internet has also increased awareness: news spread within minutes, to get education a person does not need to go abroad, everything is online.
Politicians have received a possibility to contact voters directly. They tailor the message to the audience and can count on feedback thus change campaigns regarding the expressed voices. We need to note here, that the Internet has also increased the risk of rumors, fake news, and misinformation. Talking about dangers there is even a special term for negative effects that social media may cause – “Facebook depression” (O’Keeffe & Clarke-Pearson, 2019). Comparing one’s life with others appeared to be mentally unhealthy and addictive, it motivates as much as leads to jealousy.
Nevertheless, social media have created new ecosystems for entrepreneurs. They challenged the whole economic sphere: they have created a sense of urgency raising specific questions, they increased the demand in creativity, and welcomed new business forces.
Using Social Media is an integral part of modern businesses. There are different functions of Social Media. They include two that I find the most crucial for this analysis:
Communication
Social Media allow people to maintain long distance contact. It is a unique opportunity in business industry because it raises the number and frequency of interactions at minimal expense. One of the most important and necessary functions of Social Media for a business is the opportunity of getting a feedback. It was a one-way communication from an entrepreneur side before the emergence of Social Media. Now getting a feedback from a client, provides an opportunity to strengthen the economy of a company because getting a feedback means that an entrepreneur can get information of what clients want and like. Also, an opportunity of communication allows clients to communicate with each other forming a private social circle where a client has an opportunity to share one’s opinion with other clients and directly with a company.
Advertising
Social media advertising is a form of online marketing that mainly focuses on the social networking sites. It is wildly used way of advertising due to the several factors such as that majority of western population perceive information through the Social media that means that people all around the world including those who are interested in a particular product or service can see the advertisement by simply scrolling their daily feed. Moreover, paying the celebrities or influential people to advertise the product or the service on Social media have been increasingly used due to the amount of people that follows these influential people in Social media and also due to its simplicity (the company needs to contact the person and offer their contract).
Social media has several implications (Aula, 2010) for corporate strategic and financial endeavors in terms of corporate communication, ease information search, mass-participation, minimal publication thresholds, constant dialogue, active interrelations and the prompt and broad spread of information range and linkages (Osterrieder, 2013).
Social media are the platforms of influence, and therefore one of the key goals of the company is to attract the target audience to its platforms. It is common that the more a company has its followers (on Instagram for example) then there is a bigger number of a potential customers, and people that are interested in a product or service, then the company can possibly become more recognizable that leads to the success of the company (economically and ideationally). Hence, in order to remain in front in the business industry, it is necessary for the companies to adapt to the constantly evolving environment. Moreover, considering that the Internet is a free space for expressing the views and opinions, an employer has to pay particular attention not only to the quality of the product or service but also to the conditions and environment of the employees.
By giving your business brand the social media touch, one not only generate more business but also connects with its customers better and serve them on a higher level. It makes marketing easier. According a statistic published by Ambassador 71% of consumers are more likely to recommend a brand to others if they have a positive experience with it on social media (Ewing, 2018).
It is impossible to overestimate the impact of social networks on business as a whole, since they created a separate branch of business development. Roughly speaking, a customer follows three stages of a product consuming: making a decision (choosing to buy a product or to use a service), consumption of the product/service, coming up with the impression about the product or service that creates a chain of the feedback that involves a contact between the customer and the workers which leads to improving the product or the service due to the customer’s needs. Now we would have a glimpse look on how different stages set goals and influence KPIs. More substantively the example of this changes can be given by a language school.
1. The stage of making a decision: If we imagine a customer trying to choose a language school, he/she would presumably make a primal research. Thus, a goal of a school is to create a recognizable image (best-service, modern school with outstanding students’ results). To track whether people see/hear a brand there might be a number of KPIs:
a) number of positive comments,
b) comparatively long stay on service market,
c) convenient ‘first meeting’ service (here I mean warm live meeting or a convenient web-site).
2. The stage of engagement: Here it is crucial not only to monitor the traffic, but also the impressions which could be reached only by providing clients with exceptional service. However, among typical KPIs like class attendance, total teachers’ positions filled, number of applicants, we should recognize those which require the use of modern technology in general and social media in particular. For example,
a) the ability to stay in touch with teachers/classmates/parents if necessary,
b) modern assessment methods,
c) opportunity to study online.
3. The feedback loops: It goes without saying that one of the primary business goals is further engagement provision, thus it is important to monitor the rate at which engagement transforms into conversions, in other words, the overall impact on your customer base. Before creating Social networks, this stage was crafted by the endless paper work (surveys) and world of mouth, therefore it was very inefficient, time-consuming and accompanied by human reluctance. However, social networks have made it much easier as they provide easy and quick access, as well as anonymity. The most obvious KPIs to monitor would be the number of clicks, shares, likes, comments and mentions.
As we move into the era of an authorized client, it is important to include in this list another set of KPIs. Today, the only way to truly distinguish your company from countless other brands on the market is to give your customers something worthwhile to return for. Social media can be a major source of brand loyalty. If one understands exactly what impact its’ campaigns have on the customer base, it is possible to minimize the cost of leadership, increase the level of protection for the company, and turn one-time purchases into loyal users. In this case, KPIs might be:
a) issues resolved,
b) Customer Lifetime Value strategies involved.
Almost every entrepreneur would like to boost the brand awareness. When compared to traditional advertising approaches (print media, TV, radio), social advertisements are distinctly cheaper. People are also allowed to try on some social media channels for free and scale with paid advertisements only afterwards. Also, traditional advertising methods do not give the comfort to reach out the target audience the way social media advertisements do. When using social media advertisements, people can reach out to targeted prospects, increase conversions and ultimately get a higher return on. Social media advertisements allow to constantly keep track of how well (or how bad) the advertisement is performing.
Effects that social media has on business are not exceptionally positive. First, the Internet is overcrowded with content, and it creates even more competitive environment, what is more, a mistake done is hard to rectify. Consequently, negative customer reviews are dramatically harmful. I have already mentioned that with social media involvement to the everyday life the danger of human volatility emerges. Employees represent a brand image as essentially as the final product, so the employer must pay even more attention, spend more time, effort and resources to ensure that consumers and employees remain satisfied.
Nevertheless, positive or negative, Social media influences business tremendously. It is not sufficient to simply create a profile on social media if one wants to tackle advantage these profiles can offer. In the modern hyper-connected world, one needs to know how to keep in touch with the audience in the most efficient ways. And that is therefore KPI tracking is crucial.
By looking at the data that your social media strategies generate, one can begin to make deliberated and informed decisions about how to enhance their future campaigns. When it comes to online success, it is impossible to underestimate the power of social media KPIs.
Therefore, this mechanism of result and goals-setting tracking is helpful and beneficial for companies. As an example, I have chosen an international education company that specializes in language training – “English First” (EF). I have chosen this particular company because it represents real social processes and it has a potential to grow and develop. Looking at their official web-site and the Instagram page I will describe how they bring to life the general language school KPIs and how effective they are performed.
When we open the web-site (https://www.ef.co.uk/), we see several windows:
- Learn a language abroad
- English courses
- University abroad
- International private high school
- Learn English online
It is a fact that EF is not the only school that can supply such a service, but what distinguishes it from the rivals is the beneficial use of social media. Every section of the website is accompanied by a suitable, nice picture with pleased students on it. It would not be so important if social media were not promoting visual perception. Regarding the fact that educational KPIs could be diverse I do not set to mention all of them as a goal thus I will concentrate only on “Feedback and Loyalty KPIs” of EF company in my research.
I have pointed out that companies seed to have a feedback of the work they are doing, thus EF follows this tradition and makes a post on the Instagram page every two days. So, they sustain the activity on page (more likes there are, more probably the page would appear in the “You might like” section). Moreover, EF has a tradition to post original content from EF students across the globe. It makes their page “life” and more personalized. They kill two birds with one stone: they make their followers post more, make a mention of the company so they could post in later on their page with 120k followers. It is a win-win game.
Conclusion
In this essay we have discussed the concept of KPIs. It is a tool which helps managers to track the success of a company. Than I have pointed out how social media change the business environment. I think that Social Media has dual effect on KPIs: social media creates new challenges for business and therefore new KPIs and changes the means the “old” KPIs could be reached. I showed how a successful education company uses social media in promoting its KPIs. I believe that this research can be continued by studying some concrete techniques that could be applied to business in the world of modern technologies.
Although, the sources that were used in this essay are reliable, it is necessary to keep in mind that they can be biased and only relevant to a current period of time due to the constant change in business sphere and thus it is hard to identify an impact of Social media on KPIs.
Writing this essay, I faced some difficulties such as finding a financial information or KPIs of my chosen company, therefore one of my limitations is the application of financial information of University of Tartu to English First.
2019-2-11-1549919800