Chris Lake is editor in chief at Econsultancy.

Blogging, Twittering, Facebooking, Digging, StumbleUponing, YouTubing, RSSing... If you're an introvert, all this socializing might be driving you crazy! If you are in business, the experts insist you must participate. Social media is a great way to meet your customers when and where they are online and engage them in conversation. It is also a way to draw them back to your Web site where they can find a solution to their problem. Keep in mind that social media is a two-way street. Just like your mother always told you, it is in giving that we receive. She was right!

Once you venture into social media for business, you want a way to measure its effectiveness. After all, if everything online is measurable, then this is too.

I've been Tweeting on a regular basis for a few months now asking that same question, "How do you measure social media?" Chris Lake's recent blog post provides the best answer I've seen so far. I've included what I consider the meat of the blog post, any comments in parenthesis are ones I added!

Lake suggests you first set a benchmark for where you're at in your social media strategy in three easy steps:

1. Make a note of the obvious numbers like number of Facebook fans, Twitter followers, Digg links, Delicious bookmarks, and referrals from social media sites, plus existing Web site traffic.
2. Make a note of the less obvious benchmarks such as SEO rankings and referrals, customer satisfaction scores, and other business data.
3. Make a note of ROI benchmarks. How much are you paying to acquire customers via other marketing channels? How vast is that advertising budget, and how is it being split up? What portion is directed into channels that you cannot accurately measure?

(If you do not currently follow a social media strategy, it is never too late to start! Find out what department handles social media and offer to lay out a social media plan just as you would any other business strategy.)

Lake explains 10 steps to measure the effects of social media.

1. Traffic
   Traffic is a simple way to measure social media. Remember that quality often beats quantity, though not always.
2. Interaction
   Participation says something about the kind of traffic you attract. Remember that an engaged customer is a highly valuable one. Interaction can include posting comments, participating in support forums, and writing customer reviews and ratings. This interaction can happen on your Web site and on other sites. (I suggest you set up RSS feeds, GoogleAlerts, and any other tracking measures you can find to capture social conversations about your business.)
3. Sales
   Econsultancy tracks sales from organic Google referrals and also paid search. They now track other channels, such as Twitter. Try it. Dell did, and discovered that it made $1m from Twitter in 18 months. Blendtec's 'Will It Blend?' campaign on YouTube helped to drive "a five-fold increase in sales."
4. Leads
   Some companies cannot process sales online because their products or services do not allow for it. If that's the case, try measuring something else. For example, the automotive industry might measure the effects of its online ad campaigns by the amount of brochures requests, as opposed to car sales. If you are a consultant and spend time interacting on LinkedIn Answers then there's a way of tracking that activity to inquiries about your services. The same applies across the spectrum of social media sites. Choose your weapon thought leaders!
5. Search marketing
   Don't underestimate the search engine optimization factor. Social media can be far more powerful in this regard than you might initially imagine. For example, a well-placed story/video/image on a site like Digg can generate a lot of traffic and a nice link from Digg itself, but the real win here is that it can generate a lot more interest beyond Digg. Bloggers and major publishers follow Digg's Upcoming channel to unearth new and interesting stories. One link and 20,000 referrals from Digg might lead to 40,000 referrals and 100 links from other sites. 100 links means that your page might rank higher in Google. Remember too that you can use sites like Twitter and YouTube to claim valuable search rankings on your brand search terms.
6. Brand metrics
   Word of mouth and the viral factor (inherent in sites like Twitter, Facebook and Digg) can help shift the key brand metrics, both negatively and positively. These include brand favorability, brand awareness, brand recall, propensity to buy, etc. TV ads are measured in this way. Positive brand associations via social media campaigns can help drive clicks on paid search ads and responses to other forms of advertising. We know that TV ads boost activity on search engines, resulting in paid search success stories, so I'd bet that social media can do the same.
7. PR
   The nature of public relations has changed forever. The distinct worlds of PR, customer service, and marketing are fusing. Twitter means everybody has a blog nowadays with somewhere to shout about things to their friends (and beyond). Social media sites are the biggest echo chambers in the world! In any event, if you can measure PR, then you can measure social media.
8. Customer engagement
   Given the prevalence of choice, and the ease of brand flip-flopping, customer engagement is one of the most important of all metrics in today's business environment. Engagement can take place offline and online, both on your Web site and on other sites, particularly social media sites. Customer engagement is key to improving satisfaction, loyalty rates, and revenue. By listening to customers, and letting them know that you are listening, you can improve your business, your products, and your levels of service. The alternative is to ignore customers, which sends out a terrible message. Our research found that an engaged customer will recommend your brand, convert more readily, and purchase more often.
9. Retention
   Increased customer engagement can increase customer retention. This is evolving as a crucial factor in business success. Make no bones about it: we are moving into an age of optimization and retention. Watch your retention rates as you start participating in social media. Over time, all things remaining equal, they should rise. Zappos, which is a case study in how-to-do-Twitter, and active on MySpace, Facebook, and Youtube, is closing in on $1 billion of sales this year, and "75% of its orders are from repeat customers".
10. Profits
    If you can reduce customer turnover and engage them more often, you can generate more business from your existing customer base. Happy customers often recommend your business to their network of friends, family, and social media contacts. This reduces your reliance on vast customer acquisition budgets to maintain or grow profits. Remember that old adage that it is cheaper to keep existing customers than to seek out new ones.

(In summary, social media is another way you can engage customers and build your reputation as an expert in your industry. As a relatively young technology, many businesses struggle to measure its value. Chris Lake suggests you can measure the effects of social media by qualifying traffic, interaction, sales, leads, search marketing, brand metrics, PR, customer engagement, retention, and profits. See you on Twitter!)