How to Make a Business Case for #Socialmedia Gain Social Media ROI with Crimson-Hexagon
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How to Make a Business Case for #Socialmedia Gain Social Media ROI with Crimson-Hexagon

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Often times creating a business case for any initiative - whether it is a social media initiative or a traditional business endeavor can be difficult. This slide deck walks you through the steps to ...

Often times creating a business case for any initiative - whether it is a social media initiative or a traditional business endeavor can be difficult. This slide deck walks you through the steps to make a business case in 4 steps so you can get the funding you need when you present your idea to your senior leadership team.

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    How to Make a Business Case for #Socialmedia Gain Social Media ROI with Crimson-Hexagon How to Make a Business Case for #Socialmedia Gain Social Media ROI with Crimson-Hexagon Presentation Transcript

    • How  To  Make    A  Business  Case    for  Social  Media        Dr.  Natalie  L.  Petouhoff   @drnatalie   www.DrNatalieNews.com  
    • We  are  going  to  explore  the  4  KEY  Steps  to   Making  a  Business  Case   Step  1:  Define  Business  Benefits  &  Social  Strategy       – Start  with  one  simple  sentence   – Determine  ways  that  social  analysis  would  help   – Do  the  math  with  help  from  department  heads   Step  2:  Examine  Project  Benefits,  Costs  and  ROI   Step  3:  Determine  AddiIonal  Benefits   Step  4:  Define  Risks  and  UncertainIes   Using  A  Business  Case  Template:  
    • >3.5  Billion  pieces  of  content    Shared  /  Week     By  2020  à  450  Billion  business  transacIons  /  day   How  can  we  make  sense  of  all  this?  
    • People are Acting on Content
    •   Aren’t  the  Benefits  obvious?   CLEARLY,     PEOPLE  ARE  SHARING  MORE  THAN  EVER       SOCIAL  IS  HERE  TO  STAY.       SO  WHY  DO  WE  NEED  A  BUSINESS  CASE   FOR  THE  INVESTMENT  IN   SOCIAL  MEDIA  ANALYSIS?    
    • •  The first 2 phases driven by Innovators & Early Adopters •  They don’t need business cases to adopt something WHAT’S SHIFTING THE NEED FOR A SOCIAL MEDIA BUSINESS CASE? We’re in the “third wave” of social media. 6
    • The  Third  Wave  is  Dominated  by  The  Early   Majority  Who  Are  PragmaMsts  –     •  They  want  proof   •  Love  business  cases  
    • –  Now  deep  insights  are  needed   –  Based  on  proprietary  market  research  technology  to:   •  Know  More   •  Know  Why   •  Know  How   Social  Media  Analysis  has  Evolved    
    • To  make  sound  business  decisions…   Businesses  need  deep  insights  to  drive  business  acIons   –  Who’s  talking  about  the  brand?   –  What’s  being  said  about  the  products  &  services?   –  How  are  those  online  and  offline  conversaIons  between   customers  affecIng  the  business?   –  What  can  the  business  learn  from  these  conversaIons?   –  What  can  the  business  learn  from  monitoring  their   compeIIon?  
    • The Business Case Creation Process: How to Justify an Initiative Define   Gather   IdenMfy   Analyze   Choose   Implement   &  Measure   Define   Project   IdenIfy  &   Align   Stakeholders   Set  Goals,   Metrics   Gather   Financial   Data   Document   current  state   Define   Problems  to   Solve   IdenIfy   benefits   IdenIfy  costs   IdenIfy  risks   Create   business   case   Analyze   Create  ROI   Create   selecIon   criteria   Produce  RFP   Evaluate   vendors   Select   soluIon   Measure   baseline   before   Measure   acer  for  ROI   Refine  &   opImize   Gain   consensus  
    • The components  of a quality  business case  – a template  Table  of  Contents   1.  ExecuIve  Summary   •  Background     2.  Current  Business     •  Business  Problem  To  be  Solved     3.  Proposed  Project   •  DescripIon/SoluIon  to  the   Business  Problem     4.  OpIons  EvaluaIon  Approach   •  Proposed  opIons     5.  Investment  Analysis   •  Costs,  Benefits,  ROI   •  QuanIfy  /  Sell  the  Benefits     6.  Risk  Analysis  &  MiIgaIon   •   Change  Management  /  Governance                      
    •     Poorly  communicaIng     the  anIcipated  payback  /  benefits     of  a  project     to  your  stakeholders—CxO’s,  Finance,  IT,  etc…           Is  a  sure  bet  to  stop     your  projects  from  being  funded…     Even  projects  you  know     would  strongly  benefit  the  company.  
    • BEGIN  BY  DISTILLING  THE  BUSINESS   CASE  INTO  A  SINGLE  SENTENCE:       13   “We  will  ___(DO  SOMETHING  =  Project)_____     to  improve  __(A  Business  SituaFon)________,       and  our  success  will  be  measured  by     _____(Benefits  as  Measure  by  Metrics)____,       which  is  worth  ___(A  Dollar  Value)________.”    
    • Example:     “We  will  use  social  media  monitoring  analysis       to  gain  strategic  insights,       And  our  success  will  be  measured  by  averFng  a  PR   crisis,       Which  is  worth,     on  average,  $2M  for  each  PR  crisis  averted.”     14  
    • IN  ALL  SINGLE  SENTENCE  EXAMPLES…       This is the foundation of your business case and keeps the effort focused! AND -- You may find that you can garner benefits in other departments You can add additional sentences to your business case YOU PUT A STAKE IN THE GROUND: i.e. – you say how you intend to use the social media analysis to produce specific business results… 15  
    • Example:      “We  will  use  social  media  monitoring  analysis       to  gain  real-­‐Fme  market  research  &  insights,       and  our  success  will  be  measured  by       increased  consumpFon  (sales)  &  marketshare,       which  is  worth     5%  increase  in  sales  equaling  $2M.”     16  
    • BENEFITS  FIT  INTO  “5”  BUCKETS:   To  get  more  benefit,  make  friends  in  other  departments!   17      Revenue    Tech  investment  leads  to       incremental  revenue      Sales,  Mktng    Measured  in  incremental   gross  margin      User  ProducMvity    Tech  investment  leads  to   streamlined  efficiencies    Department  Head,  and       End  User;  Customer   Service,  Product   Development…    Increased  worker  output,   cost  saving      Asset  ProtecMon    Tech  investment  protects   against  potenMal  for  loss  or   exposure    PR,  Risk  Mgt,  Security,  IT    Measured  as  potenMal   direct  /  indirect  cost   avoidance      Compliance    Tech  investment  complies  with   gov't  regulaMons    Legal  Affairs,      Regulatory    Measured  as  direct  cost   avoidance      Capital  Efficiency    Tech  investment  allows  for   reuse  &  increased  output  for   exisMng  capital    Finance,  IT,  Dept.  Heads    Measured  as  increased   output  per  capital   investment,  direct  cost   avoidance    Benefit  Bucket                  Value    Depts.   Measurement  
    • HERE’S  THE  HARD  PART…   DO  THE    MATH  -­‐-­‐-­‐-­‐         QuanMfy  each  benefit  idenMfied!   18   What’s  necessary?     •  Understanding  actual  departmental  funcIons,  costs  and   their  benefit(s)     •  Make  friends  with  Finance  and  Quality   •  Can’t  get  to  the  math  for  ROI  without  it   •  Get  input  from  departmental  head(s)  to  discuss   operaIonal  costs  and  social  analysis  opportuniIes   •  Vet  with  other  departments  –  part  of  the  change   management  process  –  so  down  the  line  you  don’t  get   resistance  
    • HOW  TO  QUANTIFY  A  BENEFIT   19   Example  quesMons  to  ask  yourself  /  Dept.  Heads     when  quanMfying  a  benefit:   Q:  What’s  the  benefit  of  having  social  media  analysis  in  PR?   A:  Geong  deep  insights  on  brewing  issues  could  help  to  prevent  the  need  to  have   PR  damage  control     Q:    What  were  the  costs  associated  with  PR  damage  control?   A:    Decreased  shareholder  value,  cost  of  effort  to  restore  brand  equity,  resource/ PR  agency  overIme  costs,  irreparable  damage  to  brand         Q:    What  benefit  bucket  does  averted  PR  damage  control  belong  to?   A:    Cost  avoidance  fits  into  Asset  ProtecIon  benefit  bucket     Therefore,  Social  Media  monitoring  analysis,  from  a  PR  perspecIve,    is  protecIng  assets:    i.e.  earnings  &  shareholder  value  …  
    • PR  Crisis  Recovery  ROI   CALCULATION   •  What  is  the  cost  of  a  PR  Crisis  Recovery?   •  Impact  to  annual  revenue  /shareholder  value?   •  Revenue  lost  /  week    during  PR  Crisis?   •  Length  of  PR  Crisis  without  social  media   monitoring?   •  Length  of  PR  Crisis  with  social  media   monitoring?   •  Cost  to  restore  corporate  brand  reputaIon  /   equity?   =   –     x  100   •  People:  Staff  Salary  (exisIng)   •  Process:  Training  to  use  the  system     (3  days)   •  Technology:  Social  Analysis    Plarorm   ROI   On  average  research  shows:   Benefit:  $2M  to  restore  the  brand’s  reputaIon   Investment:  (1  year)  =  $5,000/mo  x  12  =  $60K   ROI  =  $2M  –  $60K    x  100  =  566%  ROI                    $60K  
    • 4  KEY  Steps  to  Making  a  Business  Case   Step  1:  Define  Business  Benefits  &  Social  Strategy       – Start  with  one  simple  sentence   – Determine  ways  that  social  analysis  would  help   – Do  the  math  with  help  from  department  heads   Step  2:  Examine  Project  Benefits,  Costs  and  ROI   Step  3:  Determine  AddiIonal  Benefits   Step  4:  Define  Risks  and  UncertainIes     Using  the  Business  Case  Template:  
    • Examples:   Use  Cases  For     Social  Media  Monitoring  Analysis   22  
    • Consumer Brands: Measuring Intent Use Case: How does consumer behavior respond to corporate actions or other events? Business Application: Change activities based on impact; investigate correlations with other data sources.
    • Advertisers: Campaign Effectiveness Use Case: To what extent did a specific campaign meet its objectives? Business Application: Design future campaigns accordingly; gain visibility into elements of ROI.
    • B2B: Consumer Views on Industry Trends Use Case: What risks or opportunities exist in industry-level conversations? Business Application: Determine whether / how to participate in high profile issues.
    • TV Media: Fine Tune Promotional Content Use Case: What programming elements drive passion from fans online? Business Application: Design or tweak promotional content in order to highlight most engaging topics to audiences.
    • Brand Audit - PR Use Case SAMPLE CLIENT: A $200B global innovator that puts “imagination to work” to make a better world (Crimson Hexagon serves 16 divisions) QUESTION: What is happening to our brand? Develop a framework for social media crisis analyses & communications by analyzing three crisis affecting the brand over a 9-month period: 1 OFFSHORING JOBS TO CHINA TAX BREAKS IN A BAD ECONOMY 2 NUCLEAR ENERGY SAFETY CONCERNS 3
    • INSIGHTS and ANSWERS ANALYTIC FINDINGS: A.  Meaningful negative sentiment over horizon B.  Greater negativity toward tax issues vs. outsourcing vs. nuclear energy concerns C.  Bigger crisis was one of politics, not a single event, impacting brand perception relative to competition “I don’t think there is any question that the audit had a real impact on how people understand the brand… It’s fair to suggest that Crimson Hexagon has had a hand to play in our re-positioning." CLIENT FEEDBACK: A C B UNEXPECTED UNEXPECTED, UNINTENDED
    • How  to  make  a    business  case  for     Social  Media  Monitoring  Analysis   Dr.  Natalie  L.  Petouhoff   @drnatalie   www.DrNatalieNews.com   THANK  YOU