Social media ROI

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Michael Taggart (head of social at http://www.mrm-london.com) explains what financial ROI is and how you can demonstrate it to your business.

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Social media ROI

  1. 1. Michael TaggartHead of digital and socialMRMTwitter: @michael_taggartBlog: mrm-london.com
  2. 2. What is R.O.I.? ROI =(Final value – starting value) starting value
  3. 3. Now with carrots20 x 5x 3 (or 300%) 5x
  4. 4. Examples of non-financial outcomes• Increase in website visitors and/or time spent on the website• Change in the ratio of positive/negative brand mentions• Increase in Twitter followers or Facebook fans• Increase in requests for product information• A 20% increase in subscriptions to the e-newsletter• A 200% increase in YouTube video downloads• 15 comments on the latest blog post
  5. 5. Examples of financial outcomes• A 15% reduction in customer service costs by shifting a portion of customer service activity to Twitter• A 12% increase in online sales during a Facebook campaign• A decrease in cost per impression from £2.55 per person per mention of brand to £1.22 by leveraging social media channels• £500,000 in sales attributed to new customers acquired through Facebook.
  6. 6. Gary Vaynerchuck tv.winelibrary.tv Twitter $15,000 on direct marketing = 200 customers $7,500 on bill board advertising = 300 customers $0 (except time) on Twitter = 1,800 customers
  7. 7. Petco.compet supplier Reviews Return rate for products with reviews = 20% lower Return rate for products with 25+ reviews = 45% lower …saving on shipping, restocking, and customer service costs
  8. 8. Ford Explorer Facebook Customers who went to the website via a Facebook page = 30% more sales than those who went straight to website
  9. 9. Dell Computers Twitter Sales directly attributable to links on Twitter in 2009 = $3,000,000
  10. 10. Nick Bamford, IFA Informed Choice Blog, Twitter Blog about HSBC mis-selling + Twitter syndication = national media coverage
  11. 11. Sequence of events between Initial investment and gainInvestment Nonfinancial Financial Action Reaction (£) impact impact (£) Strategy and Tweets, RTs, Brand awareness, More customers… tactics comments, product sentiment spending more… ‘likes’, online reputation, more often (ie.campaign) loyalty, downloads (financial ROI) share of voice,
  12. 12. Sequence of events between Initial investment and gainInvestment Nonfinancial Financial Action Reaction (£) impact impact (£) This is great but it’s not where financial impact lives
  13. 13. Sequence of events between Initial investment and gainInvestment Nonfinancial Financial Action Reaction (£) impact impact (£) This is great but it’s It’s here!!! not where financial impact lives
  14. 14. Start with “why?”
  15. 15. Start with “why?” Enhance branding/awareness Protect reputationEnhance public relations Improve loyalty/retentionBuild community Enhance customer service Facilitate research & development Drive sales and leads
  16. 16. Showing a return• Overall objectives – what do you want to achieve?• Identify metrics• Set an intelligent measurable goal• Activity• Measure – the ‘return’ is successful achievement of the goal
  17. 17. Showing a financial return: FRY (© Microsoft)• Frequency (increase in frequency of transaction by customers)• Reach (net increase in customers)• Yield (increase in how much customers spend)
  18. 18. Step 1: Create Activity Timelines
  19. 19. Step 2: Impact on conversations
  20. 20. Step 3: Measuretransactional precursors Loyalt y Trust Rep Awarenes s
  21. 21. Step 2: Look at Sales(or another FRY outcome)
  22. 22. Step 5: Overlay all timelines activities social data web data transactions loyalty metrics etc.
  23. 23. CONTACT Michael Taggart, MRMEmail: michael.taggart@mrm-london.comTwitter: @michael_taggartBlog: www.mrm-london.comTel: 020 3326 9913Mob: 07780 008939
  24. 24. AttributionAll images used under Creative Commons licence:SLIDES 1: digitalsherpa.com http://digitalsherpa.com/2011/02/24/7-metrics-you-cant-ignore-in-social-media-content-marketing/SLIDE 2: http://www.completesolutioninc.com/return-on-investment/SLIDE 3: http://www.flickr.com/photos/36248441@N02/3346436761/lightbox/

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