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WEBINAR: ROI of Social Media: Myths, Truths and How to Measure
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Wondering if your social media initiative is providing value to your organization? Browse through Salesforce Radian6's March 29, 2012 webinar presentation, featuring Dr. Natalie Petouhoff and learn how to take your social media metrics and turn them into valuable information for your business.
Community Team at Salesforce Marketing Cloud
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WEBINAR: ROI of Social Media: Myths, Truths and How to Measure
- PRESENTS A WEBINAR WITH Dr. Natalie Petouhoff UCLA Director and Professor of the Social Enterprise Executive Education Courses and A Consultant/Analyst @drnatalie
- ARE YOUR SOCIAL MEDIA EFFORTS WORTH THE MONEY? Justifying the business case for listening & engaging on social media is a BIG question. And executives want bottom-line business answers.
- BUT IS CALCULATING SOCIAL MEDIA ROI EVEN POSSIBLE? Skeptics think social media is too “fluffy” to adequately measure return on investment (ROI) Would you calculate the ROI of a phone? Would you calculate the ROI of your mom? Would you calculate ROI of your pants?
- Social Media Myth #1 “Social media ROI cannot be calculated because there are too many unknowns…”
- TRUTH IS… Social business is still business… …and the business of business is increasing shareholder value.
- WHAT IS ROI? A NUMERICAL VIEW OF STRATEGY High ROI means executive approval for your initiative.
- DOES YOUR STRATEGY INCLUDE BUSINESS FUNDAMENTALS LIKE COST SAVINGS & REVENUE GENERATION… If your strategy includes… Reaching PR Better Enhanced objectives Consumer Brand faster, better, Insights… protection… cheaper… Increased Reduction in call awareness, center costs/ reach, relevance, increase in engagement… customer revenue Faster lead Decrease in generation/ customer churn/ increased lead inc customer lifetime value conversion rates Social media ROI predicts if you’ll reach the goal…
- Social Media Myth #2 “Would you calculate the ROI of putting phones on every desk in your company? smROI doesn’t have to calculated! ”
- HMMM…. Except businesses do… Evaluate productivity benefits vs. costs. And also the systems needed to support the business activities.
- TRUTH IS… There was a day when… Secretaries answered the phones and typed EVERYTHING for workers. Along came phone switches and desktop computers… Someone did ROI calculations for: Getting a company-wide phone switch and phones on every desk top. (Ask Nortel and Avaya…) And a computer on every desk. And apps to get your work done -- like email, word processing programs.
- Social Media Myth #3 Metrics = ROI
- KNOW WHAT ROI IS AND ISN’T Many people mistake social media data, metrics and Key Performance Indicators (KPIs) for ROI Metrics are used to measure: Reach, Relevance, Shares, Likes, Engagement, Purchases But that’s NOT ROI
- COLLECT SOCIAL MEDIA DATA, METRICS & KPIS Website analytics and marketing automation data help provide insight into what you’re doing right & how you can improve.
- TRUTH IS… Metrics are the like ingredients in a good recipe. They go into the ROI calculation, but they aren’t the finished dish.
- ROI VS. METRICS Return on Investment • Earned Media Value vs. Marketing Spend • Lead Value vs. Marketing Spend • Brand Equity Growth vs. PR Spend • Focus group vs. Social Media Monitoring or Community Activity Metrics Reach Metrics Relevance Metrics # of: # of: # of: News Releases Earned Media Placements Key Message Penetration Media Interviews Earned Media Impressions Earned Media Share Analyst Briefings Paid Media Impressions Share of Conversation Blogger Engagements News Release Downloads Word of Mouth Volume Blog Posts Analyst Report Mentions Click-Through Volume / Rate Video Posts Podcasts Web Site Page Edits
- ROI IS LIKE LOOKING AT AN ESCHER DRAWING It’s a complexity issue • Traditional business goals & metrics • Social media business goals and metrics • How social media affects traditional business
- THE STEPS FOR Social Media ROI? 1. An equation… ROI = Benefit - Costs x 100 Costs 2. Calculate Benefit & Costs. They are NOT metrics.
- THERE’S AN ROI OF ANYTHING THAT PROVIDES VALUE And there is an ROI of your mom, a phone and wearing pants http://www.flowtown.com/blog/what-is-the-roi-of-your-mom
- WHERE ARE WE WITH RESPECT TO BEING ABLE TO CALCULATE ROI OF SOCIAL MEDIA? Most marketers indicate social media measurement is a high priority & 48% feel pressure to report qualified outcomes of social media.
- MARKETERS ARE UNSURE HOW TO CALCULATE SOCIAL MEDIA ROI Less than 20% of marketers can calculate the ROI of Social Media
- WHAT’S SHIFTING THE NEED FOR SOCIAL MEDIA ROI? Justifying ROI is becoming more important now that we’re in the “third wave” of social media. The first two phases were driven by the Innovators and Early Adopters; they don’t need business cases to adopt something.
- SOCIAL IS JUST IN SOME BRANDS’ BLOOD Some brands forge new ground by actively making social media part of their cultural DNA. OTHERS WANT PROOF BEFORE THEY TAKE THE LEAP
- SOCIAL MEDIA ADOPTION HAPPENED QUICKLY Companies jumped into social media without extensive ROI calculations There wasn’t any real business analysis. It happened because the boss said so, or because a social media PR disaster could cost much more. Examples:
- ISN’T IT INTERESTING THAT A WHOLE INDUSTRY GREW WITHOUT CLEAR BUSINESS CASES FOR SOCIAL MEDIA?
- THE EARLY MAJORITY ARE PRAGMATISTS They need assurances. They dislike unpredictability. They are hard to win over.
- PRAGMATISTS OFTEN BECOME EVANGELISTS Get the Early Majority to see what the innovators and Early Adopters saw. Loyal once they become “sold” on an idea. They influence others through WOM channels, especially the Late Majority
- HOW DO WE GET STARTED DOWN THE ROAD OF SOCIAL MEDIA ROI? ALIGN BUSINESS GOALS WITH SOCIAL MEDIA STRATEGY To be successful in social, you need to determine why you’re doing it and what strategic objectives you’re trying to reach
- HOW DO THOSE GOALS COMPARE TO SOCIAL MEDIA GOALS? Apply SMART methodology to all business objectives: Specific Measurable Actionable Realistic Timed
- THE SOCIAL MEDIA ROI EQUATION
- A SOCIAL ROI EXAMPLE Sea World San Antonio launched a social media campaign for their new “Journey to Atlantis” ride: • Identified top roller coaster enthusiast bloggers and forum participants • Shared construction videos & photos from start to finish • Treated them like VIPs, inviting the American Coaster Enthusiasts to be the first to ride the new coaster
- THE RESULTING ROI? BENEFIT: Using a survey and formula that applies a value to each visitor to the park, Sea World was able to attribute more than $2.6 million in revenue from people who heard about the ride through the Internet. COST: The total costs for the campaign, for people, process and technology was $44,000. ROI = 2,600,000 – 44,000 x 100 = 5809% ROI 44,000 For each dollar spent, $58.09 of value was added to the bottom line.
- CALCULATING SOCIAL MEDIA ROI IS POSSIBLE! There isn’t one answer for how & what to measure in social media – the metrics to evaluate your success in social are as unique as your business. Prove social media efforts are providing value to your organization by taking the plunge and start crunching your own numbers today. Go forth & measure!
- ADDITIONAL ROI RESOURCES Video: How To Build a Business Case for Social Media http://www.youtube.com/watch?v=_59iJrYanw0&feature=relmfu Video: How To Calculate the ROI of Social Media http://www.youtube.com/watch?v=UhUO30VRN1M&feature=relmfu Video: How Social Media Benefits the Whole Company http://www.youtube.com/watch?v=e1SfQaMSbH0&feature=relmfu Ebook: ROI of Social Media: Myths, Truths & How To Measure http://www.radian6.com/resources/library/roi-of-social-media-myths-truths-and-how-to-measure/ Infographic: ROI: Are Your Social Media Efforts Worth the Money? http://www.radian6.com/resources/library/roi-of-social-media-infographic/ White paper: Calculating the ROI of Social Media http://www.salesforce.com/social-crm/?lbt=/form/pdf/socialcustservice_roi.jsp&d=70130000000G5cI&lbh=600&lbw=510
- PRESENTS A WEBINAR WITH Dr. Natalie Petouhoff UCLA Director and Professor of the Social Enterprise Executive Education Courses and A Consultant/Analyst @drnatalie
Editor's Notes
- If you have joined us you probably want to know how your social media initiative could or wouldor is providing value to your organization. So today we are going to take a look at some of the things that you may have heard on this topic and how you can begin to tackle it
- Justifying the business case for listening & engaging on social media is a BIG question. And if you are developing or expanding a social media initiative, executives at some point in the process want bottom-line business answers. You might not need them to get started, as there seems to be some acceptance that you have to have a Twitter and FB account…But if you want to do more than the super basics…You either need now or in the future a way to benchmark and track progress to determine to show if your company’s involvement in social media is getting you closer to your business goals.
- You might have heard that social media ROI can’t be calculated, but you can track things. Or that the ROI of social media is that you will be in business in 5 years, or that social media ROI is that your customer satisfaction score went up 5 points because of your online community. Or why would you calculate the ROI of social media, would you calculate the value of putting your pants on in the morning or of your mom. People who tend to say this are the early adopters and innovators and they inherently get that there is value to social media…And while some of these statements might make you chuckle and others might seem like they are true, they don’t really help you in a business meeting with peers and executives who want real business answers. So how do you speak intelligently about a field where people are comparing the ROI of wearing pants to the ROI of social media?This and more are part of the challenges of this topic
- If you are a skeptic about social media, it may seem like an unstructured stream of consciousness. Why would you dive into something that seems immeasurable? And without a way to obtain benchmarks, how could you tell when something works? How could you track the progress and gather the right metrics or do more of the right things? And how do you know when to stop doing the wrong things? How could you articulate the business case for social media? So one of the first myths about social media is that there are too many unknowns so it not possible to calculate it
- The truth is Social media or social business is still business and that means we have to look at increasing shareholder value- we have to increase sales/revenue and or dec costsIf you are on the front lines doing social media, you may be witnessing your customers making purchase decisions based on what other customers write in reviews or clicking on your deal links in Twitter. You may be seeing that the sentiment towards your brand went from being pretty negative, to now more favorable because you are reaching out to unhappy customers and making things right. You might be gaining share of voice online over your competitors or seeing that customer advocacy for the brand is building online with key influencers and brand advocates.
- ROI is a numerical representation of the improvements to your businessYou are either inc revenue or dec costsAnd a positive and high ROI means that you can get executive approval to grow your initiativeA negative ROI means that you might want to reconsider how you are going about things…And you might not have a CEO that is asking for this.But I typically work with clients that have been doing social media for 1-4 years and people are asking them- where’s the beef? Are we selling cans of soda?You want more money-- to do what?
- So if the myth you are facing is that there are too many unknowns… ask yourself…Does your strategy include any of these business goals?Reaching PR objectives – like awareness, reach, relevance and engagement- faster, better and cheaper?Are you looking for higher marketing conversion rates?Are you increasing sales revenue and margin?Are you decreasing customer churn or inc customer lifetime value?Are you reducing calls to the call center?Are you able to catch a PR or brand disaster before it blows up into a crisis?Social media can do all of these things… if you do it right… and Social media ROI can predict – based on what you are doing- if you’ll reach your business goalsSo the truth is – while there are some unknowns… if you set up your business goals properly and measure the right things- there are enough knowns that you can show a return on your investment
- ROI is not metrics, but you need metrics to measure business value of an initiative, whether it’s driven by social media or not. Start by benchmarking current business metrics, then measure changes after adding social media to the mix.
- Depending on your industry, pull metrics like:Website registrations/downloads Average engagement/handle time Online sales/donation volume Sales/revenue growth Market share Earned Media Value vs. PR Spend Lead Value vs. PR SpendService Agent SalariesAverage Number of Customer Service Questions Answered in the Online Community
- If you are a vendor, it’s the largest market and If you are in an org or selling to an brand… this is who you will have to convince social media matters to business…
- If you are a vendor, it’s the largest market and If you are in an org or selling to an brand… this is who you will have to convince social media matters to business…
- If you are a vendor, it’s the largest market and If you are in an org or selling to an brand… this is who you will have to convince social media matters to business…
- Typical Business Goals• Increase brand awareness • Drive leads in the pipeline • Drive traffic to website • Reduce customer service cost • Improve customer satisfaction • Improve customer retention and loyalty • Increase sales
- Typical Social Media Business Goals Find out what customers and prospects are saying about your company via social media monitoring Gather competitive intelligence Engage with customers and prospects online Build thought-leadership through sharing relevant content Maximize your audience on social channels Support existing sales and marketing campaigns Support recruiting and retention efforts Build an online community to provide support and advocacy
- Benefits might include reduction in the amount spent on customers service agents through deflected callsCosts might include money spent on processes like marketing and technology, such as software and implementation
- If you have joined us you probably want to know how your social media initiative could or is providing value to your organization. And you might have heard a range of things on social networks, on webinars or at conferences questioning why you would calculate the return on investment (ROI) of social mediaSo today we are going to take a look at some of the things that you may have heard on this topic and how to tackle it
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