ROI on Social Media


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May 2, 2012 - BUS 450

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ROI on Social Media

  1. 1. ROI ON SOCIAL MEDIA what seems intangible can be measured Celeste Jhala, Kim Nguyen-Don Liam Ponton Tink Newman
  2. 2. What is the definition of ROI? Distinctions of ROI in Social Media Types of Returns for SM Calculating ROI Social Media Spend (SMS) mapping through uncharted space Defining Value ROI for Adaptive Sliding Canada Conclusion References AGENDA
  3. 3. DEFINITION making the new frontier less nebulous Traditional The ratio of money gained or lost on an investment relative to the amount of money invested Context of social media Value gained relative to the resources invested
  4. 4. Creating Successful Return audience/content balance, establishing clear goals, listening online, finding a unique voice, producing compelling content, and evaluating performance regularly DISTINCTION Setting the right course Creating vs. Measuring Return "In order to get a return, you must first make the right investment"
  5. 5. 5 TYPES OF RETURNS searching for meaningful information 1. Tangible returns 2. Community Building 3. Lead Generation 4. Brand Equity 5. Process Efficiency
  6. 6. Products clothes, food, electronics Donations money, non-perishable food, baby products 1. TANGIBLE RETURNS Measuring what you find
  7. 7. 2. COMMUNITY BUILDING the world watches in expectation intangible return humanistic customer loyalty trust relationship building impressions Focusing on: who you want to nuture the problems they face their top priorities their worries how to deliver message to them How should we: reccommend actions demonstrate the product or service identifying incentives
  8. 8. 1. Conversation not campaign 2. Sales & Marketing as a team 3. An ideal customer profile 4. A universal lead definition 5. An effective lead management process 6. A Foundational database 7. Integrated multi-modal tactics 8. Consistent lead nurturing 3. LEAD GENERATION exploring new corners of our universe
  9. 9. 4. BRAND MANAGEMENT representing your cause with reliability 1. Tangible and intangible characteristics 2. Supports and maintains the constructed brand identity 3. Create a sense of trust between the company and its patrons 4. ompanies must uphold what is known as ‘culture of transparency’
  10. 10. 5. PROCESS EFFICIENCY Some maintenance required Collaborative Process: (Dell IdeaStorm) -collecting feedback and using it to tweak process designs Process Discovery and Analysis: (IBM) - key stakeholders & customers are drawn into the communication loop Real-time Monitoring: (Translink) -Companies embed social systems to monitor their business in real time -replacing the ‘snail mail’ system Satisfaction Updates: (Telus) -Users can have a multi faceted connection with product/service providers ensuring enhanced satisfaction
  11. 11. CALULATING ROI using tools for new discoveries Measuring our ROI for 2 weeks 1. Calculate how much money you spent on social media 2. Calculate your social media returns ROI = Investment Return – Social Media Spend / Social Media Spend
  12. 12. How much money/time you are spending on social media Example: Adaptive Sliding Invest $20/hr on social media SMS = $20/hr x 1 hr/day x 7 days/week x 2 weeks SMS = $280 SOCIAL MEDIA SPEND so many opportunities - only so many hours
  13. 13. CUSTOMER LIFETIME VALUE the lasting impact How much a customer is worth (the contributors, evangelists) Example: Adaptive Sliding Customer = $50 CLV = $50 x (12 Facebook contributors + 27 Twitter contributors) CLV = $1,950
  14. 14. NEW CUSTOMER VALUE finding territories that have benefit How much a new customer is worth (Twitter followers, Facebook likes, non-contributors) Example: Adaptive Sliding Customer = $10 NCV = $10 x (144 Twitter followers + 45 FB likes) NCV= $1,890
  15. 15. How much you are saving by using social media? Example: Adaptive Sliding Customer Service Value CSV = $10 x (144 Twitter followers + 45 FB likes) CSV= $1,890 NCV = $100 NCV= $100 CUSTOMER SERVICE VALUE without it - all else fails
  16. 16. IMPRESSION VALUE if there is nothing to learn - why come back? Example: Adaptive Sliding Impressions = $1/customer [(Facebook + Twitter followers) x 5]/100 x $1 IV = (189/100) x 1 IV = 9.45
  17. 17. ADAPTIVE SLIDING CANADA observing and connecting with others ROI = Investment Return ( 2944.5) – Social Media Spend (number of hours spent on SM (280)) / Social Media Spend (Total number of hours spent on SM (280)) *Investment Return (IR) = (50/10 x Number of New Customers (189)) + Impression Value (9.45) + Customer Value Via Social (1890) + New customer value (100) Investment Return (IR) = 2944.5 Adaptive sliding ROI ($) = 9.5:1
  18. 18. Importance of defining the desired return from social media activities Calculating ROI on social media is possible and relevant. CONCLUSIONS profitting at the end of the day
  19. 19. REFERENCES Brito, M. (2011). Using Social Media to Solicit Product Feedback and Innovation. Retrieved March 10, 2012 from: Chandler, S. (2011). Social BPM: Gateway to Enhanced Process Efficiency. Retrieved March 10th 2012 from: Carroll, Brian. (2006). Eight Critial Success Factors for Lead Generation. Retrieved March 18, 2012 from Harr, E. (2012). 5 Simple Steps to Measure Social Media ROI. Retrieved March 16, 2012 from Hibbard, C. (2010). How IBM Uses Social Media to Spur Employee Innovation. Retrieved March 10, 2012 from: SIFE Hunger Army. (2012). #SIFEHungerArmy. Retrived from March 14, 2012 from!/SIFEHungerArmy Social Shopper. (2012). Social Shopper Vancouver. Retrieved from March 15, 2012 from Strella, R. (2012). Steps to Achieving Social Media ROI. Retrieved March 13, 2012 from The Jersey Score. (2012). Jersey Score. Retrieved from March 15, 2012 from!/thejerseyscore The Salvation Army. (2012). The Salvation Army. Retrieved from March 16, 2012 from!/salvationarmy Wink Beauty Lounge. (2012). Products. Retrieved from March 13, 2012 from Wink Beauty Lounge. (2012). Wink Beauty GroupInc. Retrieved March 13, 2012 from!/Winkbeauty