Social Media ROI and Measurement

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Lerarn how to develop a social media strategy with a focus on social media ROI and measurement. Presented to the American Marketing Association (AMA) DC Chapter.

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Social Media ROI and Measurement

  1. 1. SOCIALSTRATProfessional Social Media Strategy Social Media ROI Presented by: Terrance Barkan CAE
  2. 2. SOCIALSTRATProfessional Social Media Strategy Opening Thoughts! Do you need to use social media just to stay “at Par”, or do you plan to use social media to gain an advantage? Either way, it is important to measure your results!
  3. 3. SOCIALSTRAT Professional Social Media Strategy Social Media ROI is the most sought after, least understood business metric today! 58% of CEO’s name “ROI” as their single most important social media related goal. Most organizations are unable to measure their social media results. Too many managers equate revenue or the number of followers and “likes” with ROI. It is only half of the ROI equation!
  4. 4. SOCIALSTRATProfessional Social Media Strategy What do you want social media to do for your organization?
  5. 5. SOCIALSTRAT Professional Social Media StrategyHow is social media being used today? To improve the customer or member experience To grow and build a stronger brand To maintain organizational competitiveness To obtain new customers or members To increase sales of products and services To empower staff teams through better communication and transparency To drive real, measurable “ROI” (Return on Investment)
  6. 6. SOCIALSTRAT Professional Social Media StrategyWhat does a “Social Media Strategy” include?
  7. 7. SOCIALSTRAT Professional Social Media StrategyThe key elements to social media strategy are:• Social Media Goals• Measures and Objectives• Defined audiences (target groups)• Key messages and themes• IP and Content development strategy**• Identification of “Community Champions”• Inventory of technology tools and applications used• Implementation and measurement guidelines** **This includes social media policies and guidelines!
  8. 8. SOCIALSTRAT Professional Social Media StrategyThe key elements to social media strategy are:• Social Media Goals• Measures and Objectives• Defined audiences (target groups)• Key messages and themes• IP and Content development strategy**• Identification of “Community Champions”• Inventory of technology tools and applications used• Implementation and measurement guidelines** **This includes social media policies and guidelines!
  9. 9. SOCIALSTRAT Professional Social Media Strategy So how do you calculate “ROI”? (Revenue + Savings) – (Related Costs)ROI = (Related Costs)NOTE: ROI is expressed as a % of return over and above total directly related costs.
  10. 10. SOCIALSTRAT Professional Social Media Strategy “ROI” example. . .Revenue: 100 New Members @ $150 = $15,000 100 Registrations @ $750 = $75,000 Total = $90,000CostSavings: Reduced Print Advertising = $12,000DirectCosts: 50% of 1 full-time staff = $45,000 Applications and tools = $ 5,000
  11. 11. SOCIALSTRATProfessional Social Media Strategy How do you calculate “ROI”? (Revenue + Savings) – (Related Costs) ($90k + $12k) – ($50k)ROI = ($50k) (Related Costs) Result: $102k-$50k = $52K net benefit. $52k / $50 = 104% ROI
  12. 12. SOCIALSTRAT Professional Social Media Strategy How should you set Social Media ROI targets and measurements? Option 1. Calculate your current revenue per employee and then multiply times the number of social media FTEs to estimate needed revenues.Example: Annual Budget = 12 million Staff of 75 = $160k per FTE (per person) Goal = at least $160k in new revenue and/or cost savings per new FTE assigned to social media
  13. 13. SOCIALSTRAT Professional Social Media Strategy How should you set Social Media ROI targets and measurements? Option 2. Define a percentage ROI goal for the business (direct costs plus margin – 20%, 30%, 50%, 100%?) and calculate total costs allocated to social media.Example: Margin Goal = 50% Staff costs = $100k (incl. taxes, pension, etc.) Applications/IT = $50k Goal = Total costs of $150k X 50% margin goal = $75k, plus total costs or $225k in new revenues.
  14. 14. SOCIALSTRAT Professional Social Media Strategy How to calculate revenues and savings: Include / allocate all related revenues including higher retention rate, incremental sales for events, books, new members, and online products like webinars. Include any areas of cost savings = fewer mailings, reduced traditional marketing campaigns, print advertising or staffing allocated to social media (shift of costs from traditional areas to new media)
  15. 15. SOCIALSTRAT Professional Social Media Strategy Calculating revenues / gainsRetention rate calculationExample: Total members = 30,000 Retention rate = 85% (15% of current year members do not renew) New members needed to break-even = 4,500 If social media can influence your retention and recruitment rates by just 1% each, this equates to 300 more members retained and 45 more new members. At $100 per member = 345 X $100 = $34,500 gain
  16. 16. SOCIALSTRAT Professional Social Media Strategy Calculating revenues / gainsEvent registration calculationExample: Annual event of 3,000 registrants (90% members) Registration fees: Members = $750 Non-Members = $1,000 If social media can influence your registration rates by 5% (word of mouth included), this equates to 135 additional member and 15 non-member registrations. = (135 X $750) + (15 X $1,000) = $116,250 new revenue
  17. 17. SOCIALSTRAT Professional Social Media StrategyHow to calculatethe value of a “Like”By tracking conversion rates, you cancalculate the value of a "Like” or member. Most important, you need to track the origin of your business transaction!Many organizations are accumulating largenumbers of followers, but… What is the quality of the membership in the group? What is the quality of the conversation? How many non-members are converting to paid membership or products?
  18. 18. SOCIALSTRAT Professional Social Media StrategyHow to calculate the value of a “Like”Conversion calculationExample: 2,418 members in an open group, of which 100 join as a member: 100 X $150.00 = $15,000 Assuming your conversion rate stays constant, each new member to the group is worth $ 6.20 ea. ($15,000 / 2,418 members = $6.20) NOTE: This is NOT ROI, it is only revenue! Q. How much are you investing to acquire each member?
  19. 19. SOCIALSTRAT Professional Social Media StrategyHow to calculate the value of a “Like”Conversion calculation If you are allocating 25% of a person at a cost of $20,000 to manage this group, you have a loss of $5,000. i.e. You are losing $2.07 for each participant! Therefore it is important to: a. Track all related revenue b. Control the costs allocated for the revenue realized!
  20. 20. SOCIALSTRAT Professional Social Media StrategyHow to track your social media campaigns? Use URL shortening and tracking tools for each campaign AND channel. Just like with your email campaigns, test and measure to see which messages and channels deliver the best results. Track the results for each message/channel to message reach and impact.
  21. 21. SOCIALSTRAT Professional Social Media StrategyHow to track your social media campaigns? Example: URL www.assc.org/meeting/registration/
  22. 22. SOCIALSTRAT Professional Social Media StrategyHow to track your social media campaigns? Example: URL www.assc.org/meeting/registration/ Twitter: http://bit.ly/zVSlEi Facebook: http://bit.ly/xPcwH1 LinkedIn: http://bit.ly/TestQWE Email: http://bit.ly/TestMailZ
  23. 23. SOCIALSTRAT Professional Social Media StrategyHow to track your social media campaigns?
  24. 24. SOCIALSTRAT Professional Social Media Strategy URL Shortening and Tracking Tools www.Bit.ly www.Budurl.com www.hootsuite.com**Note: Can be used send status updates to LinkedIn, Facebook and Twitter at the same time and will shorten your URL’s
  25. 25. SOCIALSTRAT Professional Social Media Strategy Additional Tracking Tools Google Alerts – http://www.google.com/alerts Tracks online mentions of keywords. Includes blogs and online articles. Recommend to track:  Organization name, acronyms, products and trademarks  Key personnel (volunteer and staff leadership)  Competitor names and products  Industry key topics
  26. 26. SOCIALSTRAT Professional Social Media Strategy Additional Tracking Tools TweetDeck– http://www.tweetdeck.com Tracks use of Twitter including mentions and keywords.
  27. 27. SOCIALSTRAT Professional Social Media StrategyHow do you currently measure the effectiveness of your current marketing and communications efforts? Compare results from social media versus:  Email marketing  Print advertising  Direct Mail  Exhibitions and live events  ? What is your cost per customer for each of these alternatives?
  28. 28. SOCIALSTRAT Professional Social Media Strategy Creating content, the hidden value in social media communities! New sources of value Are you able to mine the social media data and content to come up with new products and services? (Include this value in your calculation.) Can you use social media to improve (reduce) customer complaints?
  29. 29. SOCIALSTRATProfessional Social Media Strategy How to improve Social Media ROI ?  Who are your best customers today? Use data!  Understand how your customers are using social media?  Understand who are your “super connected” customers?
  30. 30. SOCIALSTRATProfessional Social Media Strategy % of Non-Use
  31. 31. SOCIALSTRAT Professional Social Media Strategy65% of your least networked members haveonly 26% of all community connections . . .
  32. 32. SOCIALSTRAT Professional Social Media StrategyJust 6% of your ultra networked members have 23% of all community connections !
  33. 33. SOCIALSTRAT Professional Social Media Strategy “Private” Social Networking ToolsEngagement is the objective andmeasurement gives you the tools you need to drive results…
  34. 34. SOCIALSTRAT Professional Social Media Strategy Leverage existing dataYou already have a lot of member demographicand business data in yourmembership or customer database…
  35. 35. SOCIALSTRAT Professional Social Media Strategy…but it doesn’t “talk’ with external social media platforms!This is the key difference between “Public” and “Private” social networking platforms
  36. 36. SOCIALSTRAT Professional Social Media StrategyA “private” social network also gives youmore control over content and branding
  37. 37. SOCIALSTRAT Professional Social Media StrategyHow do social media projects fail? No clear objectives No clear measurements No one person accountable No budget or resource allocation No sustainable business model (ROI) No integration into AMS / CRM database
  38. 38. SOCIALSTRATProfessional Social Media Strategy Make sure you succeed!  Clear objectives  Clear measurements  One person accountable  Budget & resource allocation  Sustainable business model &ROI  Integration into AMS / CRM database
  39. 39. SOCIALSTRAT Professional Social Media StrategyMemo to the CEOThe ability to define, measureand communicate the valueof social media is critical!See a sample“Memo to the CEO” at:http://budurl.com/SROI(pdf copy available as well!)
  40. 40. SOCIALSTRATProfessional Social Media Strategy Social Media ROI Q&A
  41. 41. SOCIALSTRAT Professional Social Media Strategy Resource MaterialResources and Reference Material Social Media Surveys http://budurl.com/SMsurvey Social Media Blog http://budurl.com/SMBlogs Social Media Resource Page http://budurl.com/SMResource Social Media & Strategy Books http://budurl.com/BookReviews
  42. 42. SOCIALSTRAT Professional Social Media StrategyWe help you get from point “A” to point “B”!
  43. 43. SOCIALSTRATProfessional Social Media Strategy Questions? More info at www.socialstrat.org

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