Buzz 2010 presentation

Social Business Justification & R.O.I.
olivieralainblanchard
@thebrandbuilder
Buzz 2010 Series
Washington, DC
18 August2010
#buzz2010

What do I do?
Training
Social Media Program Integration
for C-Suite executives,
Managers and organizations.
Consulting
- Brand Mgmt.
- Online Reputation Mgmt.
- Social Web & New Media
… and the blog.
Advisory Board Shenanigans

First Rule: The tools are the tools. The tools are not the thing.

Second Rule: Associations + NFPs are not like most businesses

First things first: …

Having “a presence” in Social Media
Is worthless unless you do something with it.

Your organizationdoesn’t plug into Social Media.
Social Media plugs into your organization.

Second…

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.)

Ways in which Social Media can help an association:
Outcomes
Net New Members, Increased Frequency of Donationsand Volunteerism,
Increased yield (average $ value per donation), added exposure
MemberSupport
Immediate feedback and response, positive impact in public forum, cost reduction,
Increased interactions, more varied interactions, portable resources (mobile)
Human Resources
Public Relations
Online Reputation Management, improved brand image via Social Web,
Clarification of purpose & value, Direct communication with public
MemberLoyalty
Increased interactions, better quality of interactions, deeper relationship with cause,
Increased trust in organization, increased mindshare of cause, greater values alignment

Brand Management: Momentum Drivers
Awareness
Do enough people know about us? Do enough people think about us?
Context
Do people think of us in the right way?
Value
Do people understand our value? What we offer?
Relevance
Do people appreciate our value to them?
Catalysts
Do people have a reason to think about us? To engage with us? To buy into us?

Leveraging Social Communications
Social media is there to drive,
amplify and reinforce all of these things:
Awareness
Context
Value
Relevance
Interactions
Transactions

Third: A note about vertical and lateral forces…

Vertical Engagement= Org + Individual
Program/campaign-based, on-message, limited.

Lateral Engagement = individual+ individual
This is how WOM and content really scale.

Fourth: Okay, now…

How do you rescue a fading brand?

What if this had nothing to do with Old Spice?

Facebook has over 500 MILLION users
Twitter now has over 100 MILLIONregistered users.
55,000,000 tweets per day.
37% of users tweet from their phones.
All talking to each other all day long.

But it doesn’t stop here.

What if this were your message?

What if this were your message?
The principles are the same.

Brand Management: Momentum Drivers
Awareness
Do enough people know about us? Do enough people think about us?
Context
Do people think of us in the right way?
Value
Do people understand our value? What we offer?
Relevance
Do people appreciate our value to them?
Catalysts
Do people have a reason to think about us? To engage with us? To buy into us?

Catalyst: What you do.

Reaction: What they do.
“We have to share this with friends.”

How can I leverage Social Media to impact x:
Outcomes
Net New Members, Increased Frequency of Donationsand Volunteerism,
Increased yield (average $ value per donation), added exposure
MemberSupport
Immediate feedback and response, positive impact in public forum, cost reduction,
Increased interactions, more varied interactions, portable resources (mobile)
Human Resources
Public Relations
Online Reputation Management, improved brand image via Social Web,
Clarification of purpose & value, Direct communication with public
MemberLoyalty
Increased interactions, better quality of interactions, deeper relationship with cause,
Increased trust in organization, increased mindshare of cause, greater values alignment

But all of that is mostly talk.
And talk doesn’t pay the bills
or change much of anything.

Organizations need to raise money
and/or get results.
Talk needs to impact behavior.

NOTHING AN ORGANIZATION DOES IS FREE.

1. Programs and campaigns take manpower.

2. … and technology.

3. And most importantly, time.

We have… rocks.
… all of which are limited resources.

These resources
=
100%
of your budget
These resources
generate
100%
of your outcomes
E-Marketing
Head Count
Advertising
I.T.
Inbound Call Center
Marketing
Sales Dept.
Accounting
Public Relations

Understand that a new
marketing program’s
funding doesn’t appear
out of thin air.:
Which buckets do we empty
to fill this new one?

Give me a good reason
why I should assign resources
to this thing.
The dragonwants to know how this will help the org.

It all starts with one question:
What are you trying to accomplish?
Define the objective FIRST.
THEN come up with the tactics.

Tactics don’t dictate the objective.
You know…
What this team really needs
Is more WOM!
NO

Objectives dictate tactics.
I need 3 more touchdowns
before half-time.
What are my options?
(How does WOM fit in?)
YES

Question #1:
Will it save me money?
Maybe in member support?
You mentioned something about
media costs and CPI?
Question #2:
Will it generate more revenue?
I want more volunteers,
more net new members,
more exposure,
etc.
Fact: Ultimately, the P&L drives business decisions.

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.

The Association version:
F.R.Y.
Increase how often members give us each month/year
Increase the net number of active members
Increase average “give” per “transaction”
Etc.

SAY HELLO TO:
Business Justification
R.O.I.

R.O.I.
RETURN
ON
INVESTMENT

THE R.O.I. EQUATION
Investment
Expectation of return

THE R.O.I. EQUATION
(GAIN FROM INVESTMENT - COST OF INVESTMENT)
ROI =
COST OF INVESTMENT

The 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.

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.

I’m a Social Media guru.
Love isn’t about ROI, baby.
Forget your greedy ways.
The Problem.

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
(How can I do more
with less?)
Reason #2:
REVENUE GENERATION
(How can I make more
of an impact?)
So once again, to be clear. This is R.O.I.

Let’s get people
Talking about us.
Dudes, we are
ON THIS!!!
Let’s start engagin’!!!
I’ll start crafting some
wicked blog posts and
online contests.

This rocks!
I never had it so
good!!!

Things happen in sequence.

Non-financial impact is not ROI (yet).
Too many agencies only measure here.

Types of non-financial impact
Customer complaints
Website Visitors
Impressions
Positive press
Click-throughs
YouTube views
Retweets
Coupons distributed
Visitors to a brick & mortar store
Positive WOM
Delivered emails
Negative press
Negative WOM
Employment applications
Blog comments
FaceBook friends
Social mention
Twitter followers

Yeah but…
What about
the P&L?
Monitoring to base…
Monitoring to base…
Our social mentions are wicked good!
The YouTube videos are scaling well.
Our blog even has comments!
We have liftoff!

Nope.
Anything?
Nada.
ACCOUNTING
Six Months Later…

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. How is it all helping grow the
Biz yo?

Financial vs. Non-financial Impact
Non-Financial
Financial
Are you converting this to this?

Or in your world…
Way cool!
Yeah. Sign us up.
Oh cool!
Weeeerd!
Are you converting this to this?

What a Social Media win looks like:

What a Social Media win looks like:
94,000 followers
Velocity: 8K to 66K in only 2 days
706,000 fans/likes
… sharing videos with friends on their wall
16,000,000 views
Most response videos >200,000 views
Facebook.com/oldspice

But will it “sell soap?”

(It already has.)
Sales of body wash up 107% in the last month.
(It’s a good start, but will it be enough to justify the campaign’s expense?)

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.

This is not the end of the line for you:
In your case (and unlike For Profit businesses,)R.O.I. is not where the narrative ends. R.O.I. is a means to an end.
Main non-financial objective(s)
Plant 3,000,000 new trees in the US
Reduce teen pregnancy in Chicago by 3% this year
Preserve historic neighborhoods in Baltimore
Increase local recycling by 300 tons per year
Send 300 cleanup volunteers to the Gulf for one week
Attract Google Fiber to your city

This is not the end of the line for you:
Enablement

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

Measuring transactional precursors
Office?
Museum?
Kiosk?

If you can, also look at # of transactions

If you can, also look at # of transactions
Sales?
Donations?
Other?

Also measure net new customers
NNC is a measure of effective reach,
not just media reach.

Also measure net new customers
Net new members
NNC is a measure of effective reach,
not just media reach.

Transaction data should be specific
F.R.Y.
How often customers transact. (transactions per month)
How many customers you are reaching. (net new customers)
How much they spend. ($ per transaction)

The Association version:
F.R.Y.
Increase how often members give us each month/year
Increase the net number of active members
Increase average “give” per “transaction”
Etc.

Step 5: Finally, look at Sales Revenue

Step 5: Finally, look at Revenue
Memberships?
Donations & Grants?
Sales?

Step 6: Overlay your data onto a timeline
activities
social data
web data
transactions
loyalty metrics
etc.

Step 7: Look for patterns
Impact
Uncertain Impact
Impact
Impact
No Impact
Before
After

Step 8: Prove & disprove relationships
How was this group
Touched by SM or WOM?
(And how was it not?)
Before
After

Finally, someone with some
real metrics for me to sink my teeth into!
Good job, Sparky! You done gewd!
Make the case for Social Media’s value.

R.O.I. Case Study Brief: Association Launch
Problem:A new triathlon club with virtually no funding or resources wanted to grow large enough to start sponsoring and organizing events to promote the sport in its area.
Advertising was too expensive and local media weren’t targeted enough.
Solution: - Club officers leveraged personal networks to increase reach, and digital channels to share
content.
- Schedules, newsletters, photos, videos and other
content was packaged to be sharable online.
- Identified and exploited mid-level influencers,
evangelists, volunteers and socially-motivated members.
Result: Day 1 - 5 founding members
Day 30 - 48 members
Day 75 - 179 members
Day 120 - 291 members

Result: Starting budget – $120.
Membership $ - $25 apiece
 291 x $25 = $7,275
Corporate Sponsorships for first year:
 3 sponsors = $12,000
Within 4 months, the organization had generated
almost $20,000 in revenue/funding.
The club invested this funding into events/races, custom club/team uniforms, T-shirts, car decals
and other swag. We upgraded the website.
Phase 2: The club launched a series of youth triathlons to benefit various charities and research.
Participation soared. (We raised A LOT of money.)
A state Triathlon series was launched within the year.

We did this without Facebook, Twitter, MySpace, SMS or blogs.

Social Media tools didn’t exist yet
but the principles behind “Social” did.

We leveraged our social networks,
developed them with purpose,
engaged, recruited, promoted
and leveraged the ultimate app:
…?

People.

People.
(They come fully loaded.)

We were successful
in great part due to this:

We were successful
1. We had clear objectives.

We were successful
We had clear objectives.
We understood this:

We were successful
(We understood...)
Our activities supported our objectives.

We were successful
Some were not financial. Others were.
Our activities supported our objectives.
We measured success in terms of outcomes:
- Financial
- Non-financial

We were successful
Some were not financial. Others were.
Our activities drove to our objectives.
We measured success in terms of outcomes:
- Financial
- Non-financial
5. Without revenue, we were cooked.

Drinks for
Everybody!

http://smROI.net
Ask away.
Olivier Blanchard
864.630.7398
www.thebrandbuildermarketing.com
@thebrandbuilder(on Twitter)

And now, an exercise…

And now, an exercise…
Write down your organization’s
reason for being: …

2. Write down your principal objective.
What is the most important thing you want to accomplish. (Not financial)

2. … Now quantify this.
Give it a value. (Not $.)
Make it a specific target.

3. Now give me two more.

3. … Again, express them in terms of a specific value: Members, birds rescued, etc.

4. Now write down your 3 top financial objectives.

5. Write down how each financial objective plugs into your three main overall objectives.

R.O.I. = maximizing enablement
Enablement

How will you measure success every step of the way?

Measuring success: Defining metrics early
A leads to B leads to C leads to D...
?
?
?
?
?
Non-financial objective
?

?
?
?
?
?
Start here.
?
Define Metric/value.
What is my target?
How much $ do I need to do this?

Now move here.
My $ target is $x.
Where do I measure changes in $x?
What behaviors leads to this?
?
?
?
?
?
?

Now move here.
My targetsare X, Y and Z.
My metrics are M, N and O.
My channels are P, Q, R and S
What behaviors drive these targets?
?
?
?
?
?
?

Not here.
Measure here…
Plan first. Map out the route.
Identify relevant metrics every step of the way.

Your metrics
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.

Q: What is the 2012 objective?

(Not 5,000,000 fans on Twitter)

A: Re-election.

Get 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.

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)

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

To specifically drive

Can we increase our reach?

Second largest search engine in the world, only to Google
 Millions of people are content publishers now.
Facebook has over 500 MILLION users
Twitter now has over 100 MILLIONregistered users.
55,000,000 tweets per day.
37% of users tweet from their phones.
Don’t forget…
All talking to each other all day long.

Can we increase our reach?
YES.
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

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

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.

2
Ignore here.
1
Start here…
4
3
5
Connect the dots.

R.O.I. is a crucial link in the measurement chain.

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.
And please, no more of this.

http://smROI.net
Ask away.
Olivier Blanchard
864.630.7398
www.thebrandbuildermarketing.com
@thebrandbuilder(on Twitter)

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Buzz 2010 presentation

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