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.
WEBINAR: ROI of Social Media: Myths, Truths and How to Measure
1. PRESENTS A WEBINAR WITH
Dr. Natalie Petouhoff
UCLA Director and Professor of the Social Enterprise
Executive Education Courses and A Consultant/Analyst
@drnatalie
2. 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.
3. 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?
4. Social Media Myth #1
“Social media ROI cannot be
calculated because there are
too many unknowns…”
5. TRUTH IS…
Social business is still business…
…and the business of business is
increasing shareholder value.
6. WHAT IS ROI? A NUMERICAL
VIEW OF STRATEGY
High ROI means executive approval for
your initiative.
7. 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…
8. Social Media Myth #2
“Would you calculate the ROI
of putting phones on every
desk in your company?
smROI doesn’t have to
calculated! ”
10. 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.
12. 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
13. 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.
14. TRUTH IS…
Metrics are the like ingredients in a good recipe.
They go into the ROI calculation,
but they aren’t the finished dish.
15. 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
16. 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
17. THE STEPS FOR Social
Media ROI?
1. An equation…
ROI = Benefit - Costs x 100
Costs
2. Calculate Benefit & Costs.
They are NOT metrics.
18. 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
19. 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.
20. MARKETERS ARE UNSURE HOW TO
CALCULATE SOCIAL MEDIA ROI
Less than 20% of marketers can calculate the ROI of
Social Media
21. 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.
22. 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
23. 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:
24. ISN’T IT INTERESTING THAT A
WHOLE INDUSTRY GREW WITHOUT
CLEAR BUSINESS CASES FOR SOCIAL MEDIA?
25. THE EARLY MAJORITY ARE
PRAGMATISTS
They need assurances.
They dislike unpredictability.
They are hard to win over.
26. 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
27. 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
28. HOW DO THOSE GOALS COMPARE TO
SOCIAL MEDIA GOALS?
Apply SMART methodology to all business objectives:
Specific
Measurable
Actionable
Realistic
Timed
30. 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
31. 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.
32. 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!
33. 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
34. 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