The CEO & CMO’s Guide to Social Media ROI   How Listening and Engagement Leads to a Better Social Media ROI               ...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROII   t’s well-accep...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIfirms (Fodor and Ho...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROI2      The importa...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIIt might seem disc...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROImeasures of succes...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIappropriate social...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIbrand, where and h...
The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIAbout MutualMindJo...
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MutualMind White Paper: Social Media ROI


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CEO and CMO's guide to social media ROI. This white paper provides a)overview of thought leadership on the topic social media ROI, b)shows how listening & engagement leads to ROI and c) provides recommendations on how to maximize impact of social media on your business

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MutualMind White Paper: Social Media ROI

  1. 1. The CEO & CMO’s Guide to Social Media ROI How Listening and Engagement Leads to a Better Social Media ROI $ )-. )+,THE CEO & CMO’S $ $%& ()* $& !"# !"#$%&()GUIDE TO "*$& +!SOCIAL MEDIA ROIHow Listening and EngagementLeads to Better Social Media ROI© 2011 MutualMind .......
  2. 2. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROII t’s well-accepted that social media can have a transformative effect on businesses. Wehear stories every day about how social mediaempowers companies to leap ahead of theircompetitors virtually overnight. But while manyorganizations are eager to profit from this newmedium, they often make the mistake of ap-proaching social media as though it followedthe same rules as other, more traditional mar-keting strategies. This leads many compa-nies to focus on metrics that are inaccu-rate, incomplete or simply irrelevant. Theelusive nature of social media’s ROI often re-sults in a distrust of social media.The reason for this challenge is clear. For mostorganizations, social media represents a newand unproven strategy, and aligning the expec-tations of the management, marketing and fi-nance teams is no small challenge. CEOs and Above: An analysis of traffic patterns for the phrasedirectors insist on receiving hard data, such as “social media ROI”. Source: MutualMindROI, before committing their resources. But convince management. And as marketingwithout an appreciation for the complex and departments around the world can attest,diverse insights to be gained from social me- without buy-in from the rest of the com-dia, it becomes difficult to reach a verdict on pany, social media campaigns may neversocial media’s viability or effectiveness in terms make it off the ground. If they do, they areof ROI. typically unfocused, underfunded, andSome choose to ignore the social media ROI ineffective. 1problem altogether, but It is important to un-derstand both the costs and potential value of ROI is more thancustomer interactions in social media. To help an equationweigh these values as a form of ROI, many The question of social media’s ROI re-marketers attempt to quantify the insights and mains popular in part because financialrelationships gained through social media concerns are so critically important to acampaigns, but often, these efforts do little to company’s well-being. In fact, 65% of© 2011 MutualMind 2
  3. 3. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIfirms (Fodor and Hoffman, 2009) indicated feel- problems that might arise in the greater demand to show ROI, with one in Among those companies that have seenthree marketers indicating that the demand was the most significant results with social“significantly greater” than in prior years. media, a report by Aberdeen Research In 2010 the term “ROI social media” (Zabin, 2009) found that only 32% made presented 2.5 million hits. The “increased revenue and other financial same search now, less than a year outcomes” a top priority. The majority of later, yields over 8.6 million results. successful social media campaignsWhile we understand the need to weigh the fi- focused on listening to and learningnancial repercussions before engaging with so- from their customers. And they are notcial media, doing so can be dangerously short- merely sitting back and monitoring thesighted. On the other hand, successful use of conversation. Over 82% of the highestsocial media has been proven to increase performing companies indicated that theybrand awareness and encourage far greater were actively involved in discussions withcustomer loyalty. One other non-financial ad- customers.vantage of social media is the reduction of The results of this approach speak forreputation risk for your brand. In this sense, themselves: these companies reported asocial media serves as an insurance policy for 75% increase in customer advocacy and a 78% increase in year-over-year customer retention. How might we learn from such performance? Companies that produce successful so- cial media campaigns are not superhu- man. Their success cannot be chalked up to experience (in fact, 44% of the top per- formers engaged with social media for the first time within the last 12 months: only 27% have been at it for more than two years.) Rather, these impressive cam- paigns have one thing in common: they focus on the customer first.Having accurate, up-to-the-minute keyword analysishelps uncover related questions and topics your cus-tomers are interested in. Source: MutualMind.© 2011 MutualMind 3
  4. 4. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROI2 The importance of listeningIn order to make the most of customer insight, relationships, which many companies have found to be their most valuable as- is critical to tap into the conversation your The reality is that today’s customer wantscustomers are already having. to feel that you are on their side. When a company treats social media merely as aThe ability to listen and learn from con- megaphone, consumers lose their trustsumers around the world is a strong ar- and respect for the brand.gument in favor of social media. By paying 3 You must win yourclose attention, you can quickly discover mis-understandings, service opportunities, potential customers’ trustpartnerships, competitive threats, and even the Consumers cannot simply be “advertisedspecific events, people and situations that mat- to” as they were in the past. Instead, theyter most to your audience. This knowledge demand to be active and willing partici-empowers your company to stay responsive pants in your brand. For this reason, it’s ofand relevant to their needs. vital importance that consumers bothWhen companies refuse to listen, the opposite trust and respect your intentions. No mat-happens. Approaching social media as just an- ter how large your organization is, yourother venue for broadcasting the corporate customers will interact with you one-on-message leads to a distorted view of what the one—and they must feel that your com-public thinks about and wants from your brand. pany cares about them.It also prevents building constructive, long-term Social Intelligence: A Key Competitive AdvantageA Fortune 100 company always needs up-to-date information about their competition—but whenlaunching a brand-new product, they need even more.By leveraging MutualMindʼs social intelligence system, one client was able to track key listeningmetrics and emerging trends across Facebook, YouTube and Twitter, and quickly adjusted their launchstrategy in response to insights about a competitors campaign.Monitoring the social web allowed the client to remain responsive to customer feedback and thecompetitive landscape. When mentions of a competing product flared up across social media, thecompany was able to act quickly and understand its source.Result: Arming the campaign with accurate and actionable data allowed the client to quickly uncoverits competitorʼs marketing strategies and tailor the campaign in response. These real-time insightsgave the company a complete picture of their customers, their competitors, and their campaignperformance, leading to a successful launch and a tremendous ROI.© 2011 MutualMind 4
  5. 5. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIIt might seem discouraging that customers For these reasons, it’s clear that beingnow have so much power, and that marketers able to accurately track customerare less able to control their relationship to the engagement—including their actions,brand. Rather than bemoaning their diminish- discussions and behaviors— is critical ining control over consumer awareness, many determining how to reach them.savvy marketers have discovered that custom- Know when to engage, and when toers still respond positively to a campaign that listen. The results will speak forinspires their engagement and empowers them build an authentic, personal experience withthe brand. Why? Because in social media, the customers are in control. 4 Use frameworks to understand social media’s ROI As we’ve discussed, two of the biggestFortunately, marketers have grown in their abil- challenges in making social media suc-ity to drive direct action from customers. New cessful are a) aligning the expectations ofmedia tools allow companies to quickly build multiple departments and b) demonstrat-signature videos, multimedia offerings, crowd- ing the return/value of this investment.sourced creative projects, and online/offline Without a solid approach and communi-communities. These kinds of campaigns have cation across departments, many socialbeen shown to lead to an increased affinity for media metrics can be misinterpreted,and engagement with a brand. leading to confusion and a lack of claritySocial media also allows marketing teams to about ROI.identify and engage directly with key influenc- But there is a better way.ers and their audiences in order to leverage Rather than focusing exclusively on short-their authority and attention. Building trust in term profit and financial aspects of ROI,this way is remarkably cost-effective, but companies are better-served when theyproduces big results. In fact, nearly 90% of integrate their social media roadmapthe top performers in Aberdeen’s study build with frameworks that can capably ad-brand by seeking out thought leaders in social dress multiple timeframes, non-financialmedia.Above: An analysis of social media sentiment for the phrase “social media ROI”. Source: MutualMind© 2011 MutualMind 5
  6. 6. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROImeasures of success, and risk man-agement.We recommend using social mediaframeworks when planning andexecuting your social media strategy.Aligning to a solid framework greatlyimproves your ability to comparesocial media metrics on their ownterms, and provides a completepicture of your campaign’sperformance. Since frameworks actas guidelines, you must adapt them toyour organization’s needs. This is anadvantage as it forces you to think Above: Diagram of Augie Ray’s framework based on the Balanced Scorecard. Source: Forrester Research.through the specifics of your initiative.There are two frameworks that we feel are the company’s digital and created as- sets.worth studying. ✴ In the long-term, compare the con-The first is based on a well-known sumer perception of the brand withmethodology called the balanced scorecard. the ability of the company to weatherAugie Ray, former analyst at Forrester risk over time.Research, advocates evaluating a campaign in The second framework that weterms of its financial impact across both a recommend is by Jeremiah Owyang, anshort-term and a broader risk-management analyst at the Altimeter Group. Thisperspective, and evaluating the brand in terms framework differs from the balancedof the immediate value of its campaign assets scorecard: it focuses on using(such as a website, Fanpage, or Twitter stream) aswell as long-term shifts inconsumer interest andengagement.✴ In the short-term, con- sider the financial impli- cations (profit, cost re- duction, revenue) along with the value added to Above: Diagram of Jeremiah Owyang’s framework based on organizational roles. Source: The Altimeter Group.© 2011 MutualMind 6
  7. 7. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIappropriate social media metrics for each role able to develop the specific and relevantwithin the organization. Owyang believes that metrics needed to monitor your cam-each participant in the company requires paign. These metrics will be differentdifferent information to be effective: business for every organization: in order to showstakeholders, for example, need wholly and predict consumer engagement accu-different metrics from those of a C-level rately, they must be customized to yourexecutive, who in turn need different data from audience and your specific businessthose of marketers. Tailoring campaign metrics goals. Craft your metrics in order to an-to a range of perspectives and providing each swer a specific question, not merely torole with only the data they can use collect data. 6immediately helps companies make sense of acomplex social media strategy. Insist on actionableAnalyzing customer interest is often improperly data—from day one To develop a stronger understanding ofreduced to a numbers game: it’s tempting to campaign performance, we suggest di-focus on Facebook friends, Twitter followers, or viding your chosen metrics across a fewnewsletter subscribers to get a sense of cam- key objectives:paign performance. However, while these met-rics can certainly prove helpful in seeing a ✴ Brand Awareness: mentions ofcampaign’s scale, we encourage marketers to the brand, number of return visi- tors, social bookmarks, down-avoid over-reliance on them. Often, they tell loads.only part of the story. ✴ Brand Engagement: Followers,For instance, having more Twitter followers is Friends, and RSS subscribers, sur-certainly valuable, but if users do not take ac- vey respondents, @replies, pagetion, their number is irrelevant. This metric, on views, relevance of comments, and average ratings;its own, tends to be a poor predictor of overall ✴ Word of Mouth: number ofperformance. However, it becomes much more “Likes”, embeddings, retweets,useful when combined with metrics of con- number and quality of incomingsumer action, such as Retweets, @Replies, links, and references to the workwall posts and comments. across other media.5 By segmenting your social media metrics Engagement is more according to these objectives, you’ll than a number uncover a much clearer image of theIt is essential to know your customer and know channels your prospects prefer . Byhow and why they engage with your brand. By knowing what customers think of yourstudying your customers’ behavior, you’ll be© 2011 MutualMind 7
  8. 8. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIbrand, where and how they communicate it, The world’s top-performing brands havehow strongly they feel, and where they are found that access to comprehensive,impacted by your message, you will be able to actionable data makes the differencebuild a more engaging and constructive between an informed decision and a wilddialogue with them. This can help identify guess.important and necessary shifts in your product Which would you choose?strategy, resource allocation, or customerservice. Key Takeaways7 Staying responsive in social mediaEvery company’s social media strategy is dif- • ROI determination is both an art and a science: you’ll need to combine quantitative and qualitative metrics.ferent, leaving little room for a “one-size-fits-all” • Establish metrics for your social mediacomparison. When beginning a social media ROI: it is imperative to know how wellcampaign, it’s important to ensure that you the strategy is working. At the samehave relevant metrics and the measurement time, overanalyzing only complicates matters. Use a best-in-class analyticscapability to identify what is and isn’t working. system to rapidly focus on relevant Without frequent assessment and review, results cannot be adequately ex- • There isn’t a “silver bullet” or a formulaplained or adjusted. You must be ready to react that works for everyone, so it’s essentialquickly in order to stay on top of consumer to tie metrics to your specific businessconcerns, put out public-relations fires, and objectives. Make sure your teamschase down new ideas. This ability to rapidly develop metrics that are specific, measurable, and meaningful to youriterate is essential to navigating social media’s goals.unique challenges—and to grasping its uniqueadvantages. • Employ solid frameworks such as role- specific metrics or the BalancedMarketing effectively means making good Scorecard in order to achieve cohesiondecisions at every turn. But as technology and among your teams and create a unifiedsocial frameworks evolve at such high speeds, social media’s become easy to make poor or even • An ROI for social media can becatastrophic choices due to a lack of usable calculated, but isolating its effects candata. Without a system that provides be challenging. Plan for measurementactionable analytics, your ability to iterate, track from the start, and be ready to rapidlyor predict profit in the modern marketplace iterate your approach. Make sure yourbecomes much harder. campaign produces actionable data from day one.© 2011 MutualMind 8
  9. 9. The CEO & CMO’s Guide to Social Media ROIHow Listening and Engagement Leads to a Better Social Media ROIAbout MutualMindJoin the conversation your customers are already having.MutualMind brings detailed, up-to-the-minute measurements and analysis to your entire socialmedia campaign, giving you the clear, actionable insights your business needs to leap ahead.Built from the ground up to empower campaigns of all sizes, MutualMind’s proprietary softwaremaps consumer sentiment across the Web, filters out the noise, and delivers relevant metrics andinformation directly to you.MutualMind’s proprietary social intelligence engine integrates both listening and engagementinsights with built-in, best-in-class tools for managing multiple social channels, one-clickengagement and followup, team-based collaboration, and social customer relationshipmanagement.To learn more about how your business can unlock the social web, visit References Armano, David. (2009) The Collective Is the Focus Group: Norton, Dr. David P. and Kaplan, Dr. Robert S. (1996) The Revolutionizing ROI Through “Return On Insight”. http:// Balanced Scorecard: Translating Strategy into Action. Boston, MA: Harvard Business School Press. Group Owyang, Jeremiah. (2010, December 13) Framework: The Blanchard, Olivier. (2011) Social Media ROI: Managing and Social Media ROI Pyramid. Measuring Social Media Efforts in Your Organization. blog/2010/12/13/framework-the-social-media-roi-pyramid/ Indianapolis, IN: Que. Ray, Augie. (2010). The ROI of Social Media Marketing. http:// Fodor, Marek and Hoffman, Donna. (2010) Can You Measure the ROI of Your Social Media Marketing? Cambridge, MA: MIT roi_social_media_marketing_more_dollars_and_cents Sloan Management Review. Zabin, Jeff. (2009). The ROI on Social Media Marketing: Why It Lenskold Group (2009). 2009 Lenskold Group / MarketSphere Pays to Listen to Online Conversation. Boston, MA: The Marketing ROI and Measurements Study. Manasaquan, NJ: Aberdeen Group. Lenskold Group.© 2011 MutualMind 9