Social Media ROI Model

The Social Media ROI Model
Presented by: Jeff Mello
Founder, Evolution of Communication
Evolution of Communication LLC. © 2010 - Proprietary and Confidential, for use by intended client only
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Listen, Learn, and Engage
The ultimate goal of a company is to earn a profit.
Profits are earned by creating more revenue than expenses.
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Companies don’t like to waste money so there needs to be a measurement system in place to determine their Return on Investment (ROI)
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The Traditional Advertising ROI Model will not work as a social media measurement tool since it’s not designed to track the cause and affect of social media efforts on multiple departments within a company.
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The Traditional Advertising ROI Model is very linear and focuses primarily on the Sales Department…
ROI= Profits-Traditional Advertising Investment
Traditional Advertising Investment
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The Social Media ROI Model is a multi-dimensional measurement system to track how revenues are increased or expenses are decreased in multiple departments within a company.
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The Social Media ROI Model
Track how each department’s revenue or expenses are affected by social media
ROI
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Data Collection
Collect company data from the last year to establish an average to be used for comparison once the social media strategy begins
Valuable Data:
Sales figures from the last year
Website/Blog Traffic information
Customer acquisition models (Sales Funnel)
Conversion ratios
Monthly expense for each department
Monetary value placed on a new customer
Monetary value placed on an existing customer
The Traditional Media metrics currently being used
Consumer sentiment
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Data Analysis
The important part in data analysis is understanding the cause and affect your social media efforts have on increasing company profits.
Examples by Department:
Sales- Sales numbers don’t lie. Are they going up, down, or staying the same?
Customer/Product Support- Are customers turning to your company’s social media channels for support and therefore decreasing your call center volume? Opportunity for a decrease in call center expenses.
Marketing/PR- How are you able to get your company’s product or service message out to consumers through these social media channels? How is that message being received?
Corporate Communications- How does your messaging affect your corporate image amongst employees, stakeholders, influencers, and consumers? Does this image bolster your company credibility and potentially lead to increased sales, new employees, increased brand value, etc.? Perception is reality!
HR/Recruitment- Increased job candidates being funneled through social media has the potential to decrease job fair expenses or other expenses associated with corporate recruitment.
Research/Product Development- Are you listening to your consumer’s feedback about your product or service? Are you making improvements based on this information?
CRM- Are you engaging with your customers continuously to keep them in your sales funnel?
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What is your Engagement Value?
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Most companies spend most of their effort trying to gain new customers and neglect the ones they have.
Remember the Pareto Principle better known as the 80/20 rule as applied to business…80% of your company revenue will come from 20% of your customers! Keeping the Pareto Principle in mind you can quickly see how valuable engaging with an existing customer is to your company’s profits.
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Social Media does an incredible job at allowing your company to stay engaged with existing customers but what is the value of that engagement?
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Engagement Value- The value derived from utilizing social media to engage with your company’s existing customers and prevent them from switching to a competitor.
Example:
Your customer spends on average $1,200 per year. (Customer’s Monthly Value=$100)
Through your social media efforts you successfully handle 50 customer support issues in one month.
In theory you have saved $5,000 in business by engaging with your customers and solving their issues. (Engagement Value)
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Expect What You Inspect!
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Execution
You have all the pieces needed to implement your Social Media ROI Model so now it’s time to execute.
Collect the company data
Establish the baseline numbers to be used for comparisons in measuring the effectiveness of your Social Media efforts
Create the tracking forms by department
Study the incoming data
Pinpoint the correlation between desired departmental goals and your social media efforts
Make sure your social media efforts are achieving the desired goals
Adjust social media efforts where needed
Report findings and necessary changes needed to original social media plan
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For more details on Evolution of Communication please contact:
Jeff Mello
Founder, Evolution of Communication
p: 404-579-0911
e:jeffmello@evolutionofcommunication.com
w: http://evolutionofcommunication.com
f: http://www.facebook.com/evolutionofcommunication
t: @eoc_jeff
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Social Media ROI Model

by Evolution of Communication on Jul 07, 2010

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Social Media ROI Model — Presentation Transcript