Social Media ROI for Distributed Teams

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Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Differing Philosophies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Purists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Revisionists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Key Factors in ROI Calculation . . . . . . . . . . . . . . . . . . . . . . . 7

Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Recruiting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Reduction in Customer Churn . . . . . . . . . . . . . . . . . . . . . . 10

Customer Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Lead Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

How to calculate ROI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Large Financial Institution . . . . . . . . . . . . . . . . . . . . . . . . . 13

Regional Financial Institution . . . . . . . . . . . . . . . . . . . . . . 14

Splenda4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Enhancing ROI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

About Actiance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Socialite Engage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Table of Contents

Synopsis

Much has been written about the return on investment (ROI) of social media .

How do you quantify it? Is it measurable? There are those who believe it’s too

difficult to quantify, and then there’s the camp that says, “yes, it’s absolutely

quantifiable and social media is treated no differently than other forms of

communication .”

This paper examines the potential for ROI measurements of social media

usage by distributed teams . Why focus on distributed teams? Today’s

consumer communicates and engages with a corporate brand . As social

evolves and the personal brand becomes more important, we’ll find that

measuring engagement with that personal brand inherently is more difficult

but potentially brings with it much more value . There is plenty of literature

analyzing social media ROI in general terms but fewer examining the issue

from a distributed-team standpoint . Nevertheless, there is overlap between

the two and this paper will focus on the points more unique to distributed

teams . Whether those teams are extended field marketing teams, sales

teams, or teams of financial advisors or insurance agents, we’ll look at the

scope for ROI as a whole .

We’ll take a look at some real-life examples of organizations that have

used social in distributed teams and see how their ROIs were calculated .

Increasingly, we’ve begun to see more companies publish their ROI figures,

from which lessons can be learned and applied to future social

marketing campaigns .

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Inevitably, hard figures “accented” with soft intangibles coalesce to arrive

at an “ROI” that executives look for in justifying their budget decisions . At

the end of the day, this paper argues that both camps mentioned above have

their merits and that a combination of the two makes for the most compelling

argument in a defensible social media ROI calculation . We’ll also look at

ways to improve ROI in a distributed setting .

Social media may be the latest and greatest, but it has to be evaluated in the

context of a holistic marketing strategy . It’s just one facet . Social must be

supplemented with email marketing, TV, print, and other marketing vehicles

to form a cohesive strategy where the sum is greater than the parts .

Two groups exist when it comes to the measurement of ROI with social

media: the Purists and the Revisionists . Here, we’ll take a look at what

separates them .

The Purists

This group believes that one can calculate a social media ROI through

detailed analysis, reasonable assumptions, and solid data . The Purists view

social media ROI calculations as no different than those calculations used in

email marketing or other forms of traditional marketing . An adamant purist,

Olivier Blanchard, author of Social Media ROI, unequivocally posits that

you can calculate an ROI for social media . In fact, he maintains that ROI

measurements are “media-agnostic .”1

According to Blanchard, the problematic, though not impossible, portion of

a social media ROI calculation is linking non-financial events (e .g ., website

visits, mentions, likes, shares, Retweets, etc .) to social media financial

impact (e .g ., hard numbers) . He concedes it is difficult, but with detailed

analysis, solid data, and diligence, numbers can be derived .

The Revisionists

What with so many social media sites these days and so many interaction

types (e .g ., Shares, Likes, Retweets, Wall posts, Direct Messages, etc .),

measuring ROI can be difficult since it takes time to convert a Fan, Follower,

or Connection into paying for a product or service, so argue the Revisionists .

They would further add that the social connections you make via Facebook,

LinkedIn or Twitter should be the focus of any effective marketing strategy .

Interactions one has with prospects via social media can shape perceptions,

attitudes, and ultimately actions (e .g ., a conversion) .

Differing Philosophies

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Social in this instance is really about engaging with prospects, nurturing

that relationship, and building up their confidence levels to actually open up

their wallet . Even if the nurturing process does not immediately (say, within

six months) lead to a sale, the door remains open for future deals, if the

company is persistent in its engagement with the prospect . In this respect,

ROI is not about hard profits initially . It’s about establishing a relationship

and building a level of trust with the prospect that paves the way for future

business . This measurement also leads us to the reduction of customer

churn, an important metric in many industries, especially the mobile

telecommunications industry . After all, it is much more cost-effective

to retain a customer than it is to try and attract a new one .

At the very least, the intangible factors of loyalty and trust are strengthened

to the point that the corporate brand has been enhanced and the company’s

image is imprinted in the prospect’s mind, should another business

opportunity surface in the future .

You should consider the challenges faced by organizations in the

measurement of clicks, likes, comments, shares, and ultimately conversions

when those communications and conversations happen not between the

corporate social profiles, but between the employee’s individual social

profiles and the consumer .

Key Factors in ROI Calculation

Calculating ROI depends on several factors, many of which are quantifiable .

There are plenty of tools that can track how many followers, retweets, shares,

etc ., a profile or identity is generating . Additionally, with the proliferation

of mobile and geo-location applications, leveraging social media through

distributed environments has never been easier . Greater collaboration and

higher employee productivity are just a couple of the benefits stemming from

the advancements in social media technologies that should be factored into

any ROI calculation .

Branding

This is one of the factors most often cited by the Revisionists . One of the top

intangible benefits of social media is its branding influence . Of course, brand

protection and enhancement has varying levels of significance, depending on

the industry or individual company . For those organizations where the brand

is of utmost importance, social can be a compelling medium to attract new

customers .

Case in point: Flo the Progressive Girl .

She’s seems to be everywhere – on TV,

Facebook, magazines . It’s part of a

concerted effort by Progressive Insurance

to raise the brand profile of the company

through the “mascot .” Progressive’s also

done an effective job at utilizing a mixed-channel strategy regarding social .

One can follow her tweets and view “Flotos” from her Facebook fanpage as

well as get insurance quotes right from her Facebook page . The net result is

over three million Facebook fans, the most of any insurance company .2

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Risk Management

The impact of social can also be felt on the public relations (PR) front . If

used properly, social can be a tremendous weapon for putting out PR fires .

Perhaps learning from other companies experiences, many organizations

these days turn to social to quickly address customer service issues or to own

up to mistakes .

The pizza chain, Papa John’s, recently was in the news when an employee

typed a racial slur on the receipt of a customer, which was circulated

almost immediately on the social media sites . Effusive apologies were soon

issued on Papa John’s Facebook and Twitter pages . In this instance, Papa

John’s utilized social to quickly own up to its mistake (it fired the offending

employee) and did not try to make excuses for the employee’s behavior . Had

Papa John’s not reacted quickly, customers may have boycotted the chain,

causing massive revenue loss and a tarnished reputation, that would have

required even more financial and human resources to repair .

Many organizations that have yet to figure out how to deal with public

criticism revert to fixing problems the “old way,” or “behind closed doors .”

Several times we’ve heard, “Can you delete that tweet now that we’ve fixed

your problem?” Transparency is the only way to deal with public criticism,

within the appropriate privacy boundaries, of course .

Collaboration

Many organizations have workforces that are dispersed geographically,

either in the same country or across the globe . For instance, Facebook and

LinkedIn both allow the creation of groups, which makes it much easier for

like-minded individuals or colleagues to share information and brainstorm

product ideas . Social media engagement platforms expand upon this

exchange of ideas and content by providing analytics to help workers focus

on those pieces of content that have the most impact . The net result of this

enhanced collaboration is lower operating costs, higher employer productivity,

and faster time to market . All of these benefits can be translated into hard

numbers for the ROI calculation . Organizations like IBM and Jive provide

social business platforms in order to provide this social functionality at an

enterprise level . These tools can be leveraged internally or externally, the

latter enabling supply chain partners and customers to also reap benefits .

Recruiting

For many industries, finding, hiring, and retaining qualified workers is an

issue . The technology industry is a poster child of this dilemma . For instance,

a startup flush with venture capital funding has to scour the landscape for

the best and brightest . The problem is that there are thousands of other

startups doing the same thing for a limited number of qualified resources

(e .g ., developers, QA, product managers) .

Employee retention thus becomes increasingly important when startups

dangle very competitive compensation packages to poach or lure workers to

join them . Social media, especially LinkedIn, has emerged as a very effective

resource for finding candidates and posting job listings . If you are a company

on a high-growth trajectory with several job openings, the power of social

cannot be underestimated given its tremendous reach at a relatively low cost .

Neither can the power that an open social policy can have in your recruiting

message . Generation Y’ers (e .g ., those born before 1981) are inherently

social and have much choice in which organizations they wish to work . We’ve

seen that permitting individuals to use social media safely, versus blocking

them completely, is a key differentiator for organizations in today’s world of

selective Gen Y’ers .

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Employees can easily distribute job postings through their networks with

the technology available today . To be able to track and see who is sharing or

commenting on your job postings gives you clues on who the influencers are

in your network and who might be the useful in helping you fill your open

positions . Recruitment through a trusted network of individuals is more

likely to yield results, as some of the major difficulties faced by organizations

in convincing candidates to join their firm are overcome by that trusted

relationship .

Reduction in Customer Churn

Social media can be a fantastic way to retain customers and keep them from

jumping to competitors . For instance, companies can utilize social to provide

special offers, enhance loyalty, and remain engaged with customers such that

they feel an affinity for your brand and service . Customer loyalty programs,

such as frequent flyer plans and special discounts for long-time members,

is an example of social being used to deepen customer relationships .

Calculating hard numbers for customer churn reduction are relatively easy to

ascertain . Metrics such as the number of lost customers and average spend

per customer can both be included in an ROI calculation .

Customer Service

The impact of social also is evident in customer service issues . If used

appropriately, social can be a powerful tool to enhance a company’s customer

service programs . For example, a company might use customer feedback

software, such as from Bazaarvoice, to reduce their customer service costs .

Bazaarvoice analyzed the return rates on Petco .com and found that products

with reviews had return rates 20% less than those without reviews .3 By

reducing the return rates, Petco .com was able to reduce their shipping and

restocking costs .

Lead Monitoring

With all the connections, friends, followers, etc ., that people tend to have

nowadays, it’s a veritable treasure trove of potential business leads . The

notion of “six degrees of separation” couldn’t be more apropos with respect

to social media . Instead of utilizing a lead sourcing agency or service,

organizations can bring this in-house and potentially realize some cost

savings . Engagement platforms today can track leads and give insights as to

who are the best leads . Moreover, some platforms today enable views from

either the aggregate (firm-wide) or individual (specific agents or advisors) to

better assess leads .

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How to Calculate ROI

Once you’ve identified your key benefits, you can start calculating your ROI .

The following steps, coupled with some sample metrics, can be used to

quantify the analysis:

1 . Assign values to your benefits (“Benefits”)

• Costs saved by not using a recruiter

• Cost of posting a job on LinkedIn

• Number of lost customers

• Average spend per customer

• Shipping costs as percentage of customers

• Product return rates

• Sales increase due to specific loyalty programs

2 . Add up costs of social media marketing campaigns (“Investment”)

• Salaries of specific social media marketing staff and time spent by

“other” employees on social outreach

• Cost of social media management applications (e .g ., monitoring,

listening, compliance, marketing, etc .)

• Any third-party costs (e .g ., marketing agencies, graphics designers)

3 . Divide Benefits by Investment to arrive at ROI (“The ROI”)

ASSIGNVALUES

to your benefits

Value of BenefitsDivided by Costsof Social Media

Marketing

ADD UPCOSTS

of social mediamarketing

ROI

Case Studies

Large Financial Institution

Objective: Sign up new clients

The wealth management group of the organization earns fees as a percentage

of assets under management (AUM) . As a result, the bank is constantly trying

to bring in new business so that it can continue to grow revenues from fees .

Plan: Leverage LinkedIn to build rapport with prospects and customers

An advisor had a woman join his LinkedIn network . He monitored her status

updates regularly until a life-changing event happened to her one day,

which compelled him to gather additional information . The advisor followed

up with a phone call and found out that she wasn’t doing much in the

way of financial planning . He continued to utilize LinkedIn to nurture the

relationship, provide relevant content while still remaining compliant with

firm and regulatory guidelines, and ultimately persuaded the prospect to

open an account with the bank .

Result: More assets brought into the firm to manage

• $200,000 in stock

• $700,000 in 401K rollovers

• $250,000 annuity

• $1,000,000 insurance policy

• Several large trusts set up for the customer

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Regional Financial Institution

Objective: Allow financial advisors to compliantly use social media

without tarnishing the brand name of the firm

A regional financial institution wishes to let their advisors use Twitter . The

firm is concerned about protecting the reputation of the company, while still

giving the advisors some freedom in what they tweet . The firm policy is to

pre-approve all tweets, e .g ., all tweets must undergo a compliance review

before being published .

Plan: Allow the advisors access to Twitter under the condition that all

tweets are pre-approved by compliance

An advisor at this firm tweeted 93 times . One of the tweets the advisor tried

to post was about Steve Jobs’ death, along with some investment advice on

what shareholders should do with Apple stock .

Result: Increased book of business while letting advisors maintain their

authenticity of voice

From the 93 tweets mentioned above, the advisor landed a $1 million

prospect, an excellent conversion rate for the minimal amount of resources

(e .g ., financial and time) invested . Regarding the Steve Jobs tweet, the tweet

was held by compliance and never posted to Twitter .

This case study is a combination of flexibility and compliance . The firm

wanted to build a book of business without stifling the advisors’ authenticity

of voice . In permitting advisors to express their individuality through their

tweets, the firm was still able to manage the brand of the advisor and the

firm by putting in place pre-review controls to guard against advisors taking

advantage of an emotional topic (e .g ., Steve Jobs’ death) .

Splenda4

Objective: Build awareness, trial, advocacy, and of course, sales

Even though SPLENDA® was launched in 2002, many consumers

had yet to adopt it by mid-2010 . Well-entrenched competitors still

dominated mindshare .

McNeil, the makers of SPLENDA®, knew that when consumers tried

SPLENDA® they loved it, recommended it, and continued to use it . So, when

they launched SPLENDA® Minis, McNeil wanted to leverage social media as

part of the launch plan . Through influential recommendations and other types

of social media interactions, their objective could be met .

Plan: Exclusive experience and product education

The campaign involved 9,200 highly targeted women . By focusing on

prospects most likely to buy, SPLENDA® was able to ensure participation by

“influencers,” e .g ., those consumers who create and share brand content

more frequently than the average person .

Trial was an essential part of this campaign, so all participants received

a mailing with product samples to encourage trial and lots of sharing .

Education was also essential . Consumers needed to understand both how

SPLENDA® is made and its key points of differentiation to most effectively

support consideration and adoption . So, participants also received a recipe

booklet, a product information guide, and tips for spreading the word .

Result: Greater reach, more customers acquired, higher sales

About 300,000 “conversations” happened on Facebook, Twitter, and blogs,

including a lift in the volume of online mentions of SPLENDA® during the

campaign period .

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These conversations reinforced the key brand messages (“fraction of the

calories and different formats to use anywhere”) . Coupled with

high-volume trials, the campaign helped to overcome any skepticism

and other barriers to adoption .

In the end, survey data projected strong sales performance from

the campaign:

• Over 68,000 net new customers for each of the two products – SPLENDA®

Granulated and SPLENDA® Minis

• 350,000+ total annual purchases

Enhancing ROI

So, we’ve arrived at an ROI number . What can you do to increase this

figure? For starters, you can turn to technology to boost your ROI . Social

empowerment platforms like Socialite Engage can help organizations boost

their ROI by homing in on those metrics that provide actionable insights .

From here, it becomes a virtuous circle of continuous improvement: you act

on the insight, which delivers better results, which in turn drives changes in

behavior . For instance, by focusing on important connections and followers

that have experienced life-changing events recently, these could represent

new business opportunities . Similarly, if someone has “defriended” you,

perhaps you’d want to reach out and find out why .

As alluded to earlier, just having a bevy of followers or fans is not enough .

Are they the right friends, followers, and connections? What are they doing

with the content you are posting? Are you actively engaging with them?

Are they actively engaging with you? Are you regularly sending them relevant

content that they respond to? Are they retweeting or sharing this content

with individuals in their network? Is one of your targets a particular center

of influence for you, e .g ., one who is so well-connected and well-respected,

not just in social media circles, but in the area in which you work, or in

decisions that they make that s/he has the ability to sway people’s views?

Once you’re able to pinpoint this type of data, you can refine your social

media marketing campaigns to make them more effective .

Being able to distribute content easily across the social networks empowers

remote agents and advisors to quickly get relevant content into the hands of

their connections, followers, and fans . Furthermore, tracking how each piece

of content is resonating within a particular network enables advisors and

agents to tweak or refine future marketing efforts based on the data collected

from previous campaigns . Through this iterative process, social media ROI

can be enhanced .

350,000 PURCHASES

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About Actiance

Actiance helps organizations manage, secure and ensure compliance across

unified communications, collaboration and Web 2 .0 applications such as

blogs, wikis and social networks . Actiance’s award-winning platforms are used

by 9 of the top 10 US banks and 284 FINRA-regulated firms globally .

The Actiance platform allows organizations to gain visibility of applications

in use, apply usage and content policies, ensure compliance, and gain

valuable insights across the communications and collaboration channels in

use . Actiance supports all leading social networks, unified communications,

and collaboration providers and IM platforms, including Facebook, LinkedIn,

Twitter, Google, Yahoo!, AOL, Skype, Cisco, Microsoft, Jive, and IBM .

Actiance is headquartered in Belmont, California . For more information,

visit www .actiance .com or call 1-888-349-3223 .

Socialite Engage

Socialite Engage helps organizations protect their brand and remain

compliant while still allowing their users to maintain their own voice .

Users can enhance their relationships with prospects and customers through

the sharing of either pre-approved or customized content and can measure

the impact of such content to better refine their engagement efforts .

For instance, through the tracking of key connections, users can focus on

those friends or followers who are particularly important to them .

Users can leverage a pre-populated content library to share information

with their networks or distribute their own content that is routed through

a compliance workflow to protect both the individual and the organization .

Socialite Engage also:

• Aggregates news feed from Facebook, LinkedIn and Twitter

• Finds and establishes key connections and tailor your activities to

match theirs

• Shares pre-approved library and/or tailored content to provide

authenticity of voice

• Leverages crowdsourced content across teams to improve interaction

• Fully integrates with compliance controls for content, feature access and

record keeping

• Shows engagement, trends and social graph growth through

advanced analytics

• Provides gamification tools that enable central content creators to drive

adoption and aggregate results from distributed teams

References

1 Olivier Blanchard, Social Media ROI, p . 218 .

2 SocialEyes, October 2011, p .5 .

3 Augie Ray, “The ROI of Social Media Marketing,” Forrester Research, Inc ., July 16, 2010, p .5 .

4 http://www .bzzagent .com/blog/post/tag/case-study/

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