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

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?

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

ü <Metric> ü <Metric>

Social Media <Scope> Strategic Plan 2012

MISSION WHY ARE WE DOING THIS?

GOALS WHAT DO WE WANT TO ACCOMPLISH?

TACTICS HOW WILL WE ACHIEVE OUR GOALS?

<GOAL>

<SCOPE> Goals: ü  <dept goal>

ü  <dept goal>

ü <Metric> ü <Metric> <TACTIC>

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

Market Research

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.

<GOAL>

Note: Some <scope> goals may NOT be relevant for

social media.

ü  <dept goal>

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.

<GOAL>

ü  <dept goal>

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

Step 7: Define Metrics

How will we measure tactic

success?

A safety net with multiple metrics would be nice...

TACTICS HOW WILL WE ACHIEVE OUR GOALS?

<GOAL>

ü  <dept goal>

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

§  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

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!

QUESTIONS?

Agent Angie Schottmuller @aschottmuller

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