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Social Media ROI business measurement: @thebrandbuilder at #fusionmex
 

Social Media ROI business measurement: @thebrandbuilder at #fusionmex

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Social Media ROI, goals & metrics and how to measure them: presentation by Olivier Blanchard for the Fusion Marketing Experience #fusionmex event Brussels 2011.

Social Media ROI, goals & metrics and how to measure them: presentation by Olivier Blanchard for the Fusion Marketing Experience #fusionmex event Brussels 2011.

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    Social Media ROI business measurement: @thebrandbuilder at #fusionmex Social Media ROI business measurement: @thebrandbuilder at #fusionmex Presentation Transcript

    • olivier alain blanchard @thebrandbuilder Social Media: Business Measurement
    • Ways in which Social Media can help a business: Sales Net New Customers, Increased Frequency of Transactions, promo exposure Increased yield (average $ value per transaction), and product penetration Customer Support Immediate feedback and response, positive impact in public forum, cost reduction Human Resources More effective recruiting, online monitoring of employee behavior (risk management) Public Relations Online Reputation Management, improved brand image via Social Web Customer Loyalty Increased interactions, better quality of interactions, deeper relationship with brand, Increased trust in brand, increased mindshare of brand, greater values alignment Business Intelligence Know Everything. (No, really.)
    • Fact: Achieving spectacular results requires planning.
    •  
    • Funnels are good. Follow the ball.
    • Your company doesn’t need 1,000,000 followers .
    • Your company doesn’t need 1,000,000 followers . Your company needs 10 – 1,000,000 new customers . Conversions are gold.
    • SOCIAL MEDIA IS NOT FREE.
    • 1. It takes skilled people.
    • 2. It takes technology.
    • 3. It takes time and effort.
    • … all of which are limited resources. We have… rocks.
    • These resources = 100% of your budget Head Count Advertising E-Marketing Inbound Call Center Sales Dept. Public Relations Marketing I.T. Accounting These resources generate 100% of your business
    • Which buckets do we empty to fill this new one? Understand that a new Social Media program’s funding doesn’t appear out of thin air.:
    • Okay fine. But if I’m going to take a chance on this social media thing, it had better make good business sense! Why should I allocate resources to it?
    • Reason #1: It will result in a cost reduction. Maybe in customer service? You mentioned something about business intelligence and market research? Reason #2: It will generate more revenue. I want more transactions, more net new customers, more customer loyalty, etc.
    • Business Justification SAY HELLO TO: R.O.I.
    • R . O . I . RETURN ON INVESTMENT
    • THE R.O.I. EQUATION Investment Expectation of return
    • ROI = COST OF INVESTMENT (GAIN FROM INVESTMENT - COST OF INVESTMENT) THE R.O.I. EQUATION
    • Truth about R.O.I. ROI is a business metric, not a media metric. ROI is 100% media-agnostic. Only measuring digital or social won’t get you anywhere.
    • The idea with the most promise wins.
    • To prove it, you need a plan AND sound metrics.
    • Improvement + Cost Reduction Idea: Customer Service
    • Improvement + Cost Reduction Idea: Customer Service
      • - One CSR can handle several customers at once.
      • - Customers don’t have to wait on hold.
      • - “Accents” are no longer an issue.
      • - Resolution times remain the same, but to the
      • customer, they seem considerably shorter.
      • CSRs spend less time on each ticket.
      • 140 Characters keeps things simple.
      • Transparency of process = positive PR.
      • Added convenience for customers on the go.
      • Proactive Customer Service can generate loyalty
      • and capture market share. (Angry consumers
      • could be a competitor’s customers.)
      • Even a 10% shift to twitter customer service
      • could yield significant cost savings.
      • - Run simulations and measure impact.
    • Other cost-reduction ideas: Business Intelligence / Market Research Increased Reach through SM = Lower CPI (cost per impression) In-network recruiting = lower recruiting costs
    • Now, to generate more revenue…
    • Objectives should be specific. F.R.Y. FREQUENCY, REACH, YIELD Increase how often customers buy from us each month Increase the net number of transacting customers Increase average spend per transaction Etc.
    • What if you aren’t “for profit?” You still depend on some kind of revenue to function: Grants, funding, donations, membership fees, etc. Same thing. Revenue is revenue. Budgets are budgets. Money is money.
    • R.O.I. isn’t always the right question or focus: Sales Focused on R.O.I. Customer Support Not typically focused on R.O.I. Human Resources Not typically focused on R.O.I. Public Relations Not typically focused on R.O.I. Customer Loyalty R.O.I. helps measure customer loyalty (perceptions + activity ) Business Intelligence Not typically focused on R.O.I.
    • Sales Focused on R.O.I. Customer Support Not typically focused on R.O.I. Human Resources Not typically focused on R.O.I. Public Relations Not typically focused on R.O.I. Customer Loyalty R.O.I. helps measure customer loyalty (perceptions + activity ) Business Intelligence Not typically focused on R.O.I. R.O.I. isn’t always the right question or focus:
    • Sales Focused on R.O.I. Customer Support Not typically focused on R.O.I. Human Resources Not typically focused on R.O.I. Public Relations Not typically focused on R.O.I. Customer Loyalty R.O.I. helps measure customer loyalty (perceptions + activity ) Business Intelligence Not typically focused on R.O.I. R.O.I. isn’t always the right question or focus:
    • Zero value, unless hype is your currency. We’re doing Social Media! Woohoo!!!
    • The Problem. I’m a Social Media guru. Love isn’t about ROI, baby. Forget your greedy ways.
    • ROI is NOT: Return on Inspiration Return on Involvement Return on Innovation Return on Immersion Return on Imagination Return on Importance Return on Inbound Return on Imbecility Return on Ignorance Return on Incompetence ROI is: Return on Investment.
    • R.O.I. Confusion - A tale of operational silos Engagement R.O.I. Different Focus + Different perspective
    • Reason #1: COST REDUCTION Reason #2: REVENUE GENERATION Remember what Mr. Bossman said…
    • Okay, hotshot, You have your Social Media doohickey. Now I’d better see some real results! Or else… I shrank my PR budget by 20% and my outbound call budget by 40%. Now I can afford a team of social media Rock stars. Can I get a hellz yeah?
    • Woohoo! I have a job!!!
    • Dudes, we are ON THIS!!! Let’s start engagin’!!! I call dibs on the Corporate blog.
    • One Month Later… ACCOUNTING Cool.
    • Oh my! Look at all the new visitors to our website! and all of our FaceBook friends! Hot Damn, we even have comments on the blog! What about our Twitternets?
    • This rocks! I never had it so good!!!
    • Three Months Later… ACCOUNTING Cool.
    • Monitoring to base… Monitoring to base… Our Google Analytics are through the roof! Even our social mentions are wicked good! We have liftoff! Yeah but… What about the P&L?
    • Measuring media really rocks my world.
    • Six Months Later… ACCOUNTING Anything? Nope. Nada.
    • What kind of mood is The old man in today? Not good. He doesn’t care how many visitors the website gets, or how many eyeballs we estimate we’ve reached unless it means we’re selling more stuff.
    • But why? Our website is getting mad hits, Jack! And we have 3,000 followers on Twitter now! I’m sorry, son. If your Social Media program is generating revenue, we aren’t seeing it. We need to allocate resources where we can make money. It’s just business.
    • Darn it. This media measurement stuff isn’t working. We need to start tying this stuff to actual Business performance. Where to start? Let’s see… At the beginning?
    • Non-financial impact = potential.
    • ROI = actualized potential. Social Media Activity - Vertical/Lateral Ultimately, Social Media activity has to positively impact customer behaviors and drive revenue in order to deliver R.O.I.
    • Financial vs. Non-financial Impact Non-Financial Financial Are you converting this to this?
    • Step 1: Establish a baseline 8% YoY Growth
    • Step 2: Create Activity Timelines
    • Step 3: Monitor impact on conversations What are people talking about and where? Map topics, keywords, trends, links, etc.
    • Step 4: Measure transactional precursors
    • Measuring transactional precursors
    • If you can, also look at # of transactions
    • Also measure net new customers NNC is a measure of effective reach, not just media reach.
    • Transaction data should be specific F.R.Y. FREQUENCY, REACH, YIELD How often customers transact. (transactions per month) How many customers you are reaching. (net new customers) How much they spend. ($ per transaction)
    • Step 5: Finally, look at Sales Revenue
    • Step 6: Overlay your data onto a timeline activities transactions social data web data loyalty metrics etc.
    • We overlaid all of our timelines and noticed that since our social media activities began, our website visits are up, our social mentions are also up, and everyone seems to love us. So is there a discernable pattern in this?
    • Step 7: Look for patterns Before After Impact Impact Impact No Impact Uncertain Impact
    • Step 8: Prove & disprove relationships Before After How was this group Touched by SM or WOM? (And how was it not?)
    • Look for patterns Before After Impact Impact Impact No Impact Uncertain Impact
    • Prove & disprove relationships Before After How was this group Touched by SM?
    • How long will all this analysis take? It’s all a process of elimination, really. Isolating patterns, quantifying deltas, proving ad-hocs… Then all we have to do is figure out what the cost savings and revenue gains are, and plug them into the equation.
    • Oh wow. This R.O.I. thing wasn’t at all about measuring media, impressions and eyeballs!
    • First things first: Prove that Social Media works ACCOUNTING All things remaining the same… We may have proof of concept. Hot damn!
    • So it turns out that our Social Media program is impacting every aspect of our business except traffic in our brick and mortar stores. Can you get on that? Yeah. We need to find out why we aren’t having an effect there. Kthxbye. Proper R.O.I. Analysis helps identify areas of improvement
    • Dudes, we are ON THIS!!! Let’s start engagin’!!! I’ll start crafting some wicked blog posts. More store traffic. Roger that.
    • Drinks for Everybody!
    • And please, no more of this. I’m a Social Media guru. Behold my army of followers. My personal brand is golden. Only measure followers, fans, visitors, downloads, click-throughs, mentions and web stats. That’s Social Media measurement, baby! Dig it.
    • “ Increasing revenue” is too abstract. F.R.Y. FREQUENCY, REACH, YIELD How often customers transact. (transactions per month) How many customers you are reaching. (net new customers) How much they spend. ($ per transaction)
    • Strategy drives tactics - Tactics drive metrics FREQUENCY REACH YIELD How can we leverage Social Media to influence customers to buy from us more often? How can we measure changes in this behavior? How can we leverage Social Media to acquire net new customers? How can we measure increased reach and conversions? How can we leverage Social Media to influence customers to spend more per transaction? How can we measure changes in this behavior?
    • I just figured out how to increase deodorant sales by about 9% without adding a single new customer! FREQUENCY
    • REACH
    • What a Social Media win looks like: Facebook.com/oldspice 94,000 followers Velocity: 8K to 66K in only 2 days 16,000,000 views Most response videos >200,000 views 706,000 fans/likes … sharing videos with friends on their wall Convert net new viewers into net new transacting customers.
    • But will it “sell soap?”
    • Sales of body wash up 107% in the first month. (It’s a good start, but will it be enough to justify the campaign’s expense?) (It already has.)
    • YIELD I know how to increase yield!!! Let them eat cake!
    • Awareness Run through it logically. Awareness Campaign* Retweet Join club Share Etc. Altered Purchasing Behavior Track appropriate metrics Create a “take the challenge” page where users log their product purchase. CRM captures that data at point of sale. Same store sales increase but market share remains the same. Etc.
    • Measurement should not be a religion. Adapt: Measure what makes sense.
    • First things first: Campaigns Media spend Attention
    • Campaigns are microcycles, not a strategy. On their own, campaigns work, but have a limited value.
    • This is the goal. Campaigns on their own rarely do this. Social Equity = stronger bond with customers
    • Every campaign supports the growth of your community. Use campaigns to drive a larger strategy.
    • What’s your next move? Use campaigns to drive a larger strategy. You are here
    • What’s your next move? Use campaigns to drive a larger strategy. Plateau.
    • What’s your next move? Use campaigns to drive a larger strategy. Campaign.
    • What’s your next move? Use campaigns to drive a larger strategy. Increase.
    • What’s your next move? Use campaigns to drive a larger strategy. Plateau.
    • Where is your attention? Use campaigns to drive a larger strategy. Use social media to enhance key business functions to sustain value and engagement. Use campaigns to jump-start a specific metric.
    • Ask away. Olivier Blanchard 864.630.7398 www.thebrandbuildermarketing.com @thebrandbuilder (on Twitter) FIND OUT MORE AT SMROI.NET
    • But wait… there’s more!
    • Measuring success: Defining metrics early ? ? ? ? ? Non-financial objective ? A leads to B leads to C leads to D...
    • Measuring success: Defining metrics early ? ? ? ? ? Non-financial objective ? Start here. Define Metric/value. What is my target? How much $ do I need to do this?
    • Measuring success: Defining metrics early ? ? ? ? ? Non-financial objective ? Now move here. My $ target is $x. Where do I measure changes in $x? What behaviors leads to this?
    • Measuring success: Defining metrics early ? ? ? ? ? Non-financial objective ? Now move here. My targets are X, Y and Z. My metrics are M, N and O. My channels are P, Q, R and S What behaviors drive these targets?
    • Plan first. Map out the route. Identify relevant metrics every step of the way. Measure here… Not here.
    • Now start from the beginning. 1. Baseline. 2. Timeline… You planned from outcome to catalyst. Now measure from catalyst to outcome. R.O.I. = financial metrics within this process. Your metrics
    • Q: What is the 2012 objective?
    • (Not 5,000,000 fans on Twitter)
    • A: Re-election.
    • Main non-financial objective(s) Get re-elected in 2012
    • Q: What is my most important resource?
    • A: Campaign funding. ( It enables everything.*) * Understand your business and its mechanics. If you don’t, you are flying blind.
    • Main non-financial objective(s) My $ target is $x. Where do I measure changes in $x? What behaviors leads to this?
    • Q: How does Social Media fit in?
    • A: Above all else, it yields campaign contributions.
      • A: How it yields campaign contributions.
      • Directly through vertical engagement
      • Indirectly, through lateral engagement (WOM + peer influence)
    • Main non-financial objective(s)
    • Let’s plug-in F.R.Y., just for fun.
    • Can we increase the frequency of contributions?
    • Note: Most Obama For America online supporters gave little, but they gave often. Frequency was a key factor in the O4A strategy.
    • Can we increase the frequency of contributions? YES. Increase frequency of interactions Ask more often Update swag more often Repeat message more often Engage more often SM is more cost effective than paid media
    • Main non-financial objective(s) To specifically drive
    • Can we increase our reach ?
    • Second largest search engine in the world, only to Google Twitter now has over 100 MILLION registered users. 55,000,000 tweets per day. 37% of users tweet from their phones. All talking to each other all day long. Facebook has over 500 MILLION users  Millions of people are content publishers now. Don’t forget…
    • Can we increase our reach ? YES. Be everywhere. Seed and grow our channels Help our supporters share content Ask our fans to share content Arm our fans with tools Make our reach strategy clear Vertical + Lateral engagement
    • Main non-financial objective(s) To specifically drive
    • Can we increase our Yield ?
    • Can we increase our Yield ? YEP! Foster depth of engagement Develop and build loyalty Increase involvement of fans Understand the value of timing Build clarity of purpose Ask when we need to ask
    • Main non-financial objective(s) To specifically drive
    • Because the objectives dictate the tactics...
    • … the objectives also dictate the metrics.
    • The metrics are the vital signs of your program.
    • Every measurement you take has its place and tells its part of the story.
    • 4 2 5 3 Start here… Ignore here. 1 Connect the dots.
    • R.O.I. is a crucial link in the measurement chain.
    • Ask away. Olivier Blanchard 864.630.7398 www.thebrandbuildermarketing.com @thebrandbuilder (on Twitter) http://smROI.net