Social Media: ROI Possible
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Transcript of Social Media: ROI Possible
HOW TO PLAN, JUSTIFY AND GAUGE THE VALUE OF SOCIAL MEDIA MARKETING EFFORTS
Angie Schottmuller | @aschottmuller | SES San Francisco | Aug 14, 2012
MISSION: Define ROI or tangible business value to justify use of social media.
SOCIAL MEDIA: The intersection of technology
and social interaction to create, share, or connect online.
ROI % (BENEFIT - COST) X 100
COST
What is ROI?
Example:
($2000 - $500) X 100
$500 300%
Formula:
Seems easy enough...
So why is it so "impossible"?
77% of businesses lack sufficient resources
for social media.
Awareness Inc., State of Social Media Marketing, Jan 2012
70% of businesses plan to expand social
media presence in 2012.
Awareness Inc., State of Social Media Marketing, Jan 2012
Growing Types of Social Media...
• Social Networks • Blogging • Microblogging • Bookmarking • Media Sharing • Discussion Forums • Social Listening • Review Sites • Social Curation • User-Generated Content
• Social Sign-on • Geosocial Sites • Crowdfunding • Social Ads • Streaming Content • Social Gaming • sCRM • Wiki • Social Commerce
Top 3 Reasons Social Media ROI Measurement is Rare:
ü Unclear Objectives
ü Too Many Metrics
ü Difficult ROI Measurement
- eMarketer, 7 Guidelines of Achieving Social Media ROI, Feb 2010
Who's feeling the pressure?
Yup.
Yeah! BIG TIME.
So here's the plan:
q Clarify and align objectives/tactics
q Prioritize meaningful metrics
q Simplify measurement
Strategic Planning Process
1. Determine Scope 2. Gather Business Goals 3. Define Mission/Purpose 4. Set Goals 5. Define KPIs 6. Choose Tactics 7. Define Metrics
WHO?
WHY?
WHAT?
HOW?
ü <Metric> ü <Metric>
KPI:
Social Media <Scope> Strategic Plan 2012
<MISSION>
MISSION WHY ARE WE DOING THIS?
GOALS WHAT DO WE WANT TO ACCOMPLISH?
TACTICS HOW WILL WE ACHIEVE OUR GOALS?
<GOAL> <TACTIC>
<TACTIC>
KPI:
<GOAL>
KPI:
<GOAL>
<SCOPE> Goals: ü <dept goal>
ü <dept goal>
ü <dept goal>
ü <dept goal>
A
B
C
D
A
B
C
ü <Metric> ü <Metric>
ü <Metric> ü <Metric> <TACTIC>
<TACTIC> ü <Metric> ü <Metric>
ü <Metric> ü <Metric> <TACTIC>
<TACTIC> ü <Metric> ü <Metric>
Step 1: Determine Scope What aspect of the business will use social media?
See more: http://j.mp/6socialmedialisteners
Marketing & PR
Human Resources
Research & Development
Customer Service
Executives & Management
Sales
Market Research
IT
SOCIAL MEDIA
FOCUS. You can only
wear one smart lens at a time.
Step 2: Gather Business Goals
What are this year's [SMART] business goals? (Specific to each scope)
CUSTOMER SERVICE: (Example) • Reduce average response time on inquiries • Improve average satisfaction rate • Reduce call volume costs via web self-
service alternatives
80% of marketers incorrectly begin with tactics instead of goals.
START Here:
DO NOT START Here:
Image credit: Jay Baer - http://j.mp/socialmediagoalfunnel
Step 3: Define SM Mission/Purpose
Why are we bothering with social media? (Specific to each scope)
MARKETING: (Example)
To build an army of advocates that in turn help build and maintain the brand's position.
Step 4: Set Goals What do we want to accomplish?
Merge Mission with <Scope> Goals to create social media-specific Goals.
<MISSION>
<GOAL>
<GOAL>
<GOAL>
A
B
C
Note: Some <scope> goals may NOT be relevant for
social media.
<SCOPE> Goals: ü <dept goal>
ü <dept goal>
ü <dept goal>
ü <dept goal>
A
B
C
D
ALL time must be accounted for.
If what you're working on doesn't align to a goal.....
ABORT! ABORT!
Strategic Planning: Balanced Scorecard (BSC)
1-2 goals for each perspective.
1. Customer 2. Financial 3. Learning & Growth 4. Business Process
OBJECTIVE KPI MEASUREMENT Awareness % share of voice (SOV) for online mentions Consideration # of total "social" interactions Leads/Sales # of conversions driven from social media Retention # of repeat blog visitors Advocacy # of total positive mentions, reviews, or
UGC shares
Step 5: Define KPIs
How will we measure goal success?
Examples:
Image credit: DragonSearch http://j.mp/awarenessroi
More KPIs...
OBJECTIVE KPI MEASUREMENT Innovation $ saved or generated as a result of social
feedback Market Research # of "focus groups" providing feedback Customer Service
# of social support inquiries resolved
Social PR # of negative brand mentions resolved (Bonus: # converted to positive mentions)
HR Recruiting # of candidates driven from social media
Note: These KPIs are just examples. Select a metric that's most indicative of progress for your organization's goals.
KPI:
Social Media <Scope> Strategic Plan 2012
<MISSION>
MISSION WHY ARE WE DOING THIS?
GOALS WHAT DO WE WANT TO ACCOMPLISH?
<GOAL>
KPI:
<GOAL>
KPI:
<GOAL>
A
B
C
<SCOPE> Goals: ü <dept goal>
ü <dept goal>
ü <dept goal>
ü <dept goal>
A
B
C
D
Our planning progress thus far... Remember: Plan separate trees for each scope!
Step 6: Choose Tactics
How will we accomplish our goals?
• b
Balance risks: resources, technology, timing...
Understand & Chart How Social Channels Serve Your Goals...
@MagicLogix: http://j.mp/smmchannelsbygoal
Insert your goal
HERE!
Step 7: Define Metrics
How will we measure tactic
success?
A safety net with multiple metrics would be nice...
ü <Metric> ü <Metric>
KPI:
Social Media <Scope> Strategic Plan 2012
<MISSION>
MISSION WHY ARE WE DOING THIS?
GOALS WHAT DO WE WANT TO ACCOMPLISH?
TACTICS HOW WILL WE ACHIEVE OUR GOALS?
<GOAL> <TACTIC>
<TACTIC>
KPI:
<GOAL>
KPI:
<GOAL>
A
B
C
ü <Metric> ü <Metric>
ü <Metric> ü <Metric> <TACTIC>
<TACTIC> ü <Metric> ü <Metric>
ü <Metric> ü <Metric> <TACTIC>
<TACTIC> ü <Metric> ü <Metric>
<SCOPE> Goals: ü <dept goal>
ü <dept goal>
ü <dept goal>
ü <dept goal>
A
B
C
D
Calculations
"ROI can only be calculated AFTER the investment has
yielded a return. It cannot and must not be estimated
beforehand. Ever. Under any circumstances."
~Olivier Blanchard, @thebrandbuilder, Social Media ROI [Book]
Why Measure SMM? 1. Justification/Feasibility 2. Value-Basis for Comparing Tactics
What we really need to do is:
Cost-Benefit Analysis (CBA)
BENEFIT - COST = VALUE
CBA: http://j.mp/costbenefitanalysis
Cost-Benefit Analysis
BENEFIT
COST
§ SM Labor § IT Labor § Tools & Software § Opportunity Costs § Training § Risk
§ Awareness § Web Traffic § Lead Generation § Sales § Conversion § Customer Retention § Loyalty § Advocacy § Satisfaction § Market Research
GROW REVENUE IMPROVE
SATISFACTION REDUCE COSTS
All that matters...
Reference: Jim Sterne's book, Social Media Metrics
GROW REVENUE - SOCIAL METRICS
What can you impact via social?
• # of QUALIFIED LEADS • # of NEW CUSTOMERS • # of REPEAT CUSTOMERS • % of CONVERSIONS Social Proof Examples: Star-ratings, reviews, user-shared photos/videos, # comments, # shares
Image credit: http://j.mp/awarenessroi
Cars.com Online Reviews Pages with reviews had:
• 16% higher conversion rate
• 100% more traffic driven to dealer sites
Case Study: http://j.mp/carscomsmmroi
GROW REVENUE - SOCIAL MEDIA ROI CASE STUDY
CareOne Social Sales Support
Customers coming through social channels:
• 179% higher conversion rate to complete a consultation form
• 732% higher rate of completed first payment
Case Study: http://j.mp/careonesmmroi
GROW REVENUE - SOCIAL MEDIA ROI CASE STUDY
REDUCE COSTS - SOCIAL METRICS
Quantify the equivalent value as if you had to pay for these:
• MEDIA VALUE – # of Website Visits (social referrals) – # of Online Mentions – # of Articles / Social PR – # of User-Shared Content (Photos, Videos, Testimonies)
• WEB SELF-SERVICE • REQUIRED STAFF TO CUSTOMER RATI0
How much would a
photo/video shoot cost?
Old Spice Videos
Correlation impact of social buzz:
• 27% sales increase year on year (since original Mustafa campaign)
• 55%-107% sales increase during the social media campaign
Case Study: http://j.mp/oldspicesmmroi
GROW REVENUE & REDUCE COSTS - SOCIAL MEDIA ROI CASE STUDY
SATISFACTION - SOCIAL METRICS
Survey users for feedback and crunch Lifetime Customer Value (LTV) numbers.
• % of POSITIVE SENTIMENT IN MENTIONS • AVERAGE % of STAR-RATINGS (EACH LEVEL) • CUSTOMER SATISFACTION SCORE • % WHO FOUND WHAT THEY WERE SEEKING • LIKELIHOOD TO RECOMMEND % • # REPEAT WEB VISITS / WEB RECENCY
Compute LTV with Avinash: http://j.mp/calculateltv
InfusionSoft Social Customer Service
• 1:72 to 1:172 reduced agent to customer ratio
• 10% higher customer satisfaction
Case Study: http://j.mp/infusionsoftsmmroi
REDUCE COST & IMPROVE SATISFACTION - SOCIAL MEDIA ROI CASE STUDY
Multichannel can add confusion...
Quantify "Social Attribution"
• Web analytics tracking • URL shortener (e.g. Bit.ly) • Social-specific promo codes • Third party tool analytics (e.g. Bazaarvoice) • Online surveys (e.g. Foresee, KISS Insights) • A/B tests • ASK the customer!
ACTION PLAN 1. Assessment - Analyze current state, include SWOT
2. Strategy - Map out social media plan by scope
3. Pitch - Present top ideas to IMF
4. Prep - Secure resources, budget, tools, training, etc.
5. Implement - Execute the plan (Abort if necessary)
6. Review - Analyze activity & ROI using multiple metrics
7. Optimize - Gathers insights and improve for the sequel
Only
20% of marketers measure social media ROI.
- eMarketer, 7 Guidelines of Achieving Social Media ROI, Feb 2010
It's time for YOU to lead
the way.
KEY TAKEAWAYS
• Define separate strategy for each scope/dept
• Set clear objectives before picking tactics
• Select high-level annual goal KPIs (resilient to tactical changes)
• Use cost-benefit analysis (CBA) for justification and comparison
• Focus on measuring the 3 key objective buckets
• Recalculate CBA and ROI after implementation
"The impossible can become possible,
IF... YOU'RE...
AWESOME!" - Rhino [Disney's Movie, Bolt]
MISSION: Apply these tips and share this presentation, so your social media
initiatives don't self-destruct!