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The Business Case For Social Media

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Social Media and ROI are not an impossible combination when a business case approach and measurement are applied

Social Media and ROI are not an impossible combination when a business case approach and measurement are applied

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  • Nice presentation, definately helps to lay out a strategic framework for thinking about social media for business.
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  • And that’s all we have time for right now. We have some next steps for consideration and an overview of our firm, but you can peruse our social web experience for that. Readiness is focused and getting your business needs understood and tied out to a social business strategy that makes sense for you and clearly advances your business in a measurable way. If you have a clear mapping between your business objectives , KPIs, and performance objectives to those value levers that we just discussed –those clearly influencing revenue, costs and profitability -- then you’ll have your business case for social media.

The Business Case For Social Media The Business Case For Social Media Presentation Transcript

  • July 3 rd , 2009 Your Guide to Social Media Success© The Business Case for Social Media
  • “ The Business Case for Social Media”. There is a wide range of discussion on this topic going on right now. On one end of the spectrum, we see simple approaches showing adoption rates of social media and describing that as business case. On the other end of the spectrum are those hard-core pragmatists searching for what they refer to as the holy grail of social media – an actual ROI! 7Summits is interested in this latter end of the spectrum. We are exploring specific business imperatives that every organization invests in and works to drive tangible results from. We know that there are specific levers that affect these imperatives and either directly or indirectly drive revenue or help to remove cost from an organization. We know that Social Media can have an impact on many of these.
  • Social Media Defined Applied Social Media The Business Case for Social Media Measurement This material is meant to establish a few major concepts: 1) what do we mean when we say social media? 2) what do we mean by “Applied Social Media”? 3) can a business case be formulated here? 4) and what exactly are we measuring? This is not a perfect conversation. However, it is a conversation and we welcome your feedback, insights and opinions as we learn together, refine this message and hopefully help some companies realize some of the many benefits that applied social media has to offer.
  • “ Social Media” is a phrase that has been over-hyped, obscuring its definition and confusing its meaning with many other terms. Social Media Defined
  • Therefore Social Media is a set of technologies being used to accumulate and distribute information or data (content) to members of a community that have congealed around a common purpose. Social Media Defined S o c i a l M e d i a Relating to human society and its members 1 ; of and pertaining to the life, welfare and relations of human beings in a community 2 (singular medium) The storage and transmission tools used to accumulate and distribute information, or data 1 1 en.wikipedia.org/wiki/Media_(communication) 2 http://dictionary.reference.com/browse/social Social Media’s more precise definition can be found by looking more closely at the original definition of is root words:
  • Social Media Defined So what are the predominant media that we are talking about? There are a lot of categories of social media: Social Networks, RSS Feeds, Blogs, Wikis, Podcasting, Widgets & Gadgets. These are some of the more well known ones. The list goes on: Search Engines; Social Book Marking Sites; Micro-blogging; texting is social; video sites; photo sites; travel sites; and now B2B networks are forming; mashups – a good example being display of flickr images over the top of Google maps. We’ll take a quick look at the most often used media just to give everyone a good baseline of what they are and how businesses are starting to apply them. If you get all of this, just skip ahead.
  • Social Media Defined Social Networks focus on building online communities of people who have come together for a common purpose. Social Networks started out as a means to share personal news, photos and status and are now moving on to become a preferred way for connecting a global workforce. Many companies are creating brand-centered communities and actively participating in media where consumers spend time to help better understand their perspectives and needs. Examples: Facebook, MySpace, LinkedIn, and myPath
  • Social Media Defined RSS - most commonly translated as "Really Simple Syndication“ or ‘Rich Site Summary” – it actually consists of formats used to publish frequently updated information . Information like blog entries, news headlines, audio, and video. The idea here is that these formats are somewhat standardized making is easy for them to be consumed in many places as well. This syndication aspect of the delivery is what differentiates RSS from other ways of sending and accessing this information. Imagine a feed like this providing updated company news and information – internal or external. Business are using RSS to do everything from consumer research sources to make sure that their information can be reached by others using this medium. Examples: favorite blogs, CNN News, BBC, Mashable.com (very useful social media blog), Social Blizzard (coming soon)
  • Social Media Defined A blog – is a type of website that is really like a personal journal that gets frequently updated and is intended for the general public. Businesses are using blogs to better establish their identity, engage consumers and do so in their preferred media: a lot of people are reading blogs! Examples: Mashable, TechCrunch, Wifli.Wordpress.com
  • Social Media Defined A wiki is a collection of Web pages designed to enable anyone who accesses it to contribute or modify content, using a simplified markup language. Business as using these to create collaborative websites, share best practices and as an important component of a community website. Examples: Wikipedia; many topical wikis covering anything from art tutorials to adoption.
  • Social Media Defined A podcast is kind of like a blog, but the content s made up of a series of digital files, mostly audio or video. Like blogs, these are released periodically and made available for download so that they can be listened to or watched on your computer, your phone or your iPod. Examples: Audio Books, Learn A New Language, “Hidden Yellowstone”
  • Social Media Defined Gadgets originated from a term referring to “desk toys” like stress balls, puzzles and those little perpetual motion gizmos. So a widget or gadget is a small web component that has a particular function – many are fun – and these now live on our computer desktop or inside our web browser. Gadgets and widgets have made many of the platforms that we are used to using (like facebook) more fun and usable. Businesses are just starting to use gadgets to create persistent business monitors; to create directories of information that can be embedded in other sites thus increasing brand awareness; to provide updates on key data, news or events. Examples: countdown timers, weather forecast, word of the day, guitar chord explorer, RSS News Reader, and so much more.
  • Social Media Defined The categories of social media and the named media themselves continue to expand at an alarming rate.
  • Social Media Defined This tends to raise a lot of questions: These are the wrong questions What should we be doing on Facebook? We only have seven people in Marketing – which sites and tools should we be using? How do I use Twitter? Do we need to be on Twitter and Friendfeed? What is the role of PR is Social Media? Businesses are compelled to apply these technologies with a focus driven far too much by “how” and not by “why.”
  • Social Media Defined The questions that should be asked: How do we increase sales and market share? How can we better align innovation with market demand? How do we providing a consistent customer support experience at a reduced cost? How do we establish and maintain a positive online reputation? How do we improve time-to-productivity for new employees? How can we increase customer retention? What audience are we trying to reach and what are our objectives with that audience? These questions focus on applying social media to drive some level of measurable business value
  • Social Media Defined Applied Social Media The Business Case for Social Media Measurement
  • Applied Social Media Consider this. Your business is comprised of several key stakeholders: customers, employees, partners, and investors. Relationships with those stakeholders are affected by various parts of your organization: marketing, sales, customer service, human resources, public relations, logistics, procurement, product development, and more. Social Media can add value to those relationships. Measureable Value. Client Stakeholders Entities Involved In Those Relationships Relationships Your objectives for using social media should be grounded with this in mind to set a solid foundation. Social Media can add measureable value to these relationships.
  • Many companies approach social computing as a list of technologies to be deployed as needed – a blog here, a podcast there – to achieve a marketing goal.  But a more coherent approach is to start with your target audience and determine what kind of relationship you want to build with them, based on what they are ready for. Forrester categorizes social computing behaviors into a ladder with six levels of participation; we use the term "Social Technographics" to describe analyzing a population according to its participation in these levels. Brands, Web sites, and any other company pursuing social technologies should analyze their customers' Social Technographics first, and then create a social strategy based on that profile. Applied Social Media Groundswell Groundswell taught us to apply media based on the audience, the objectives with that audience and the supporting strategies.
  • Applied Social Media Social Media is incorporated into strategies for the full spectrum of customer engagement from Awareness to Ongoing Engagement . Offline media, traditional online media, and social media all come together to affect how we engage prospects and customers.
  • Applied Social Media
  • Applied Social Media So, this is what we mean by “Applied Social Media” Client Stakeholders Entities Involved In Those Relationships Relationships
  • Social Media Defined Applied Social Media The Business Case for Social Media Measurement
  • The Business Case for Social Media Now extend the idea of “Applied Social Media” by taking a closer look at several business imperatives along with some specific value levers that move the needle when social media is applied. Company Business Imperatives Value Levers The results can be measured in terms of either clearly moving key operation metrics or delivering a hard ROI calculation.
  • The Business Case for Social Media Company Business Imperatives Value Levers
    • Marketing Imperative: Increase Brand Awareness, Grown Sales and Take Market Share
      • Market Intelligence
      • Identifying Market Trends
      • Multiplying the effectiveness of Campaigns
      • Increase Customer Loyalty
      • Building Brand-Centered Community
    • PR Imperative: Establish & Maintain a Positive Online Reputation
      • Monitoring & Engaging
      • Online Reputation Management
      • Public Messaging through topics of interest
    • Customer Service Imperative: Providing consistent customer support at a reduced cost
      • Providing Consistent Support (re-use knowledge)
      • Reducing Incoming Call Volume
      • Lowering Support Costs
      • Building Customer Trust & Loyalty
    Where Can Business Value be Most Affected by Social Media?
      • Sales Imperative: Sales Growth
      • Lead Generation
      • Expertise Location
      • Pipeline Development
    • Product Development Imperative: Align Innovation with Market Demands
      • Customer Driven Product Innovation (Aligning Innovation with Market Demands)
      • Accelerate time-to -Revenue
      • Driving Better Results from R&D Investments
      • Knowledge Retention
    • HR Imperative: Attraction, Engagement & Retention of Workforce
      • Employee Awareness / Workforce Attraction
      • Employee On-boarding / Time to Productivity
      • Training and Education
      • Connecting & Engaging Workforce
      • Improving Generational Workforce Performance
      • Empowering Individual Productivity
    The Business Case for Social Media These are the imperatives behind the behaviors that company’s are trying to drive toward. This is where social media can help.
  • The Business Case for Social Media Lowering Support Costs and Incoming Call Volume. Live support is often the most expensive support activity companies provide. By providing an open environment in which support problems are exposed to other customers of your product or service, Social Business Software can dramatically improve your customer support team’s productivity. Because support requests are directed to a community and not an individual, a partner or another customer can often handle them, plus the resolution will be available to all other customers for reuse. Examples of Value Levers in Social Media Each Value Lever states a specific case for how value can be delivered, and can be supported by case studies and a business case.
  • Empower Individual Productivity. Too often, employees can’t access key resources when they need them, be they people or documents. Social Media can be leveraged to provide employees with a 360-degree view of conversations and activities across previously isolated information silos. As a result, they can easily access the right people and information to generate better results in less time. The Business Case for Social Media Examples of Value Drivers in Social Media Each Value Lever states a specific case for how value can be delivered, and can be supported by case studies and a business case.
  • The Business Case for Social Media Formal Business Cases Many business cases are still very anecdotal, however formal rigor and financial acumen are being applied to harden these. Impact of Value Levers
  • Twitter ROI Case Study: Dell Generates $3 Million in Sales Utilizing Twitter First adopters of social media networks like Twitter , Facebook , LinkedIn , and blogging understand that their success can be measured and based on audience engagement, recognition, and involvement. Yet, Social Media’s Achilles heel, in the eyes of corporate decision makers who still utilize Web 1.0 analytics and measurement for their marketing, sales, and promotion efforts, is the lack of compelling ROI case studies: until now. Dell’s Twitter Strategy: ROI of Engagement The Washington Post reported on Claire Baldwin’s  article in Reuters “ Twitter helps Dell rake in sales “: The Business Case for Social Media Even this popularized example is viewed as anecdotal. Did economy, seasonality or other factors beyond social media come into play here?
  • Social Media Defined Applied Social Media The Business Case for Social Media Measurement
  • Measurement Test, Measure, Learn Measurement & Insights is core to a business-focused Social Media investment. Models that connect both conversations and activity on the web to your business performance are the fundamental tools that must be worked with. Baseline measures, along with agile test-measure-learn cycles allow you to adapt, grow, and improve. Measurement should be setup with the idea of watching as your investment delivers tangible results. Tools in this space have evolved beyond traditional web analytics to Listening Platforms that look for patterns in the conversations, identify emerging themes and identify the information that should be treated with the most importance. Social Media is becoming easier to measure with a host of tools available for both transactional measures and key insights.
  • Measurement ROI Modeling Breakeven should be in months, not years. You input cost, baseline measures and related assumptions into the activity-dependency models. Sensitivity-type analysis around the behaviors you are changing flows through the model and drives value calculations. Update your model as you evolve and continue to measure. You should be able to track your investment in a more meaningful way and understand what you get in return. Web Performance & Analytics Most companies have the basics down: traffic and transaction measures but those leave out the best parts of the story. These ensure that the right data is collected and analyzed to provide insights on the value of your content and applications as well as your products and brand. You will learn what and how to measure, where your brand is being talked about, and the sentiment of those conversations (positive, negative, or neutral). You can also see how your competitors’ fair in those same conversations. With this information, you can create a social business strategy that really means something. The ROI is what we are after. That takes time and some solid work up front. Web performance and analytics are arguably not enough, but they are a needed component. And the tools here are really evolving.
  • Measurement Behavior and Conversion Tracking Your content, your apps, your ads, your conversations: it’s all about changing or enabling consumer behavior. With the business-focused models presented here, you should be able to connect those behaviors to desired business value. These powerful stories are written in activity-dependency models. With those models, you’ll know what you need to measure to “see” how your investment changes consumer behaviors. Then, watching those behaviors, you can adjust your measures and improve your model to deliver more value from the channels and social venues that are working for you. Optimization Strategies The social web is a fluid, dynamic environment that eschews outside control. Your best strategy is on-going measurement and adjustment. It is important to stay abreast of insights around new trends, new technologies, and new participation approaches that help you focus your investment on those behaviors that truly bring value. Test & learn will become a part of your vocabulary (perhaps your new mantra), and will transform your strategies to keep pace with social change. Changing and enabling consumer behavior is what we are after and so behavior tracking, and ultimately conversion, are needed. This goes back to the Strategic Framework for Applied Social Media that we looked at earlier.
  • So, a business case for social media in general is conceptual. However, you can now see how social media can be applied to your business and that it can be measured. And if you have a clear mapping between your business objectives , KPIs, and performance objectives to those value levers that we discussed here – those clearly influencing revenue, costs and profitability – then you’ll have your business case for social media. The Business Case For Social Media The Business Case for Social Media
  • In the Vast Expanse of Newly Evolving Social Media, What Should You Focus on First ? Your Guide to Social Media Success ©