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HOW TO PLAN, JUSTIFY AND GAUGE THE VALUE
      OF SOCIAL MEDIA MARKETING EFFORTS




Angie Schottmuller | @aschottmuller | SES San Francisco | Aug 14, 2012
MISSION: Define ROI or tangible business
  value to justify use of social media.
SOCIAL MEDIA:
 The intersection of technology
and social interaction to create,
   share, or connect online.
What is ROI?
Formula:
              (BENEFIT - COST) X 100
 ROI %
                      COST
Example:
               ($2000 - $500) X 100
  300%
                      $500
Seems easy enough...


So why is it so
 "impossible"?
77%          of businesses
lack sufficient resources
    for social media.

     Awareness Inc., State of Social Media Marketing, Jan 2012
70%        of businesses
 plan to expand social
media presence in 2012.

    Awareness Inc., State of Social Media Marketing, Jan 2012
Growing Types of Social Media...
•    Social Networks       •    Social Sign-on
•    Blogging              •    Geosocial Sites
•    Microblogging         •    Crowdfunding
•    Bookmarking           •    Social Ads
•    Media Sharing         •    Streaming Content
•    Discussion Forums     •    Social Gaming
•    Social Listening      •    sCRM
•    Review Sites          •    Wiki
•    Social Curation       •    Social Commerce
•    User-Generated Content
Top 3 Reasons Social Media
 ROI Measurement is Rare:

ü  Unclear Objectives
ü  Too Many Metrics
ü  Difficult ROI Measurement


   - eMarketer, 7 Guidelines of Achieving Social Media ROI, Feb 2010
Who's feeling the pressure?


   Yup.


                      Yeah!
                    BIG TIME.
So here's the plan:
q  Clarify and align objectives/tactics
q  Prioritize meaningful metrics
q  Simplify measurement
Strategic Planning Process
1.  Determine Scope          WHO?
2.  Gather Business Goals
3.  Define Mission/Purpose   WHY?
4.  Set Goals
5.  Define KPIs              WHAT?
6.  Choose Tactics
7.  Define Metrics           HOW?
Social Media <Scope> Strategic Plan 2012
MISSION           GOALS             TACTICS
WHY ARE WE        WHAT DO WE WANT   HOW WILL WE ACHIEVE
DOING THIS?       TO ACCOMPLISH?    OUR GOALS?
                  A                               ü  <Metric>
                                    <TACTIC>      ü  <Metric>
                      <GOAL>
                                                  ü  <Metric>
 <MISSION>            KPI:
                                    <TACTIC>      ü  <Metric>


                  B                               ü  <Metric>
                                    <TACTIC>      ü  <Metric>
                      <GOAL>
<SCOPE> Goals:                                    ü  <Metric>
                                    <TACTIC>      ü  <Metric>
                      KPI:
ü  <dept goal>
 A
ü  <dept goal>
 B                C                               ü  <Metric>
                                    <TACTIC>      ü  <Metric>
ü  <dept goal>
 C                    <GOAL>
ü  <dept goal>
 D                                                ü  <Metric>
                                    <TACTIC>      ü  <Metric>
                      KPI:
Step 1: Determine Scope
What aspect of the business will use social media?

             Marketing & PR             IT
                                                    Research &
                                                   Development

 Human Resources
                               SOCIAL                 Customer Service
                               MEDIA
         Sales

                                                Executives &
                                                Management
             Market Research


                                   See more: http://j.mp/6socialmedialisteners
FOCUS.
 You can only
wear one smart
lens at a time.
Step 2: Gather Business Goals
What are this year's [SMART] business goals?
(Specific to each scope)

CUSTOMER SERVICE: (Example)
•  Reduce average response time on inquiries
•  Improve average satisfaction rate
•  Reduce call volume costs via web self-
   service alternatives
START Here:



80% of marketers
incorrectly begin
with tactics
instead of goals.


      DO NOT START Here:


                 Image credit: Jay Baer - http://j.mp/socialmediagoalfunnel
Step 3: Define SM Mission/Purpose
Why are we bothering with social media?
(Specific to each scope)

MARKETING: (Example)
To build an army of advocates that
in turn help build and maintain the
brand's position.
Step 4: Set Goals
What do we want to accomplish?
                  A

                      <GOAL>         Merge Mission with
 <MISSION>
                  B
                                     <Scope> Goals to
                      <GOAL>         create social media-
                                     specific Goals.
                  C
<SCOPE> Goals:
                      <GOAL>
ü  <dept goal>
 A
ü  <dept goal>
 B
                               Note: Some <scope> goals
ü  <dept goal>
 C                             may NOT be relevant for
ü  <dept goal>
 D                                   social media.
ALL time must be accounted for.

If what you're
working on doesn't
                       ABORT!
align to a goal.....
                       ABORT!
Strategic Planning:
Balanced Scorecard (BSC)
1-2 goals for each perspective.




                         1.    Customer
                         2.    Financial
                         3.    Learning & Growth
                         4.    Business Process
Step 5: Define KPIs
How will we measure goal success?
Examples:

OBJECTIVE       KPI MEASUREMENT
Awareness       % share of voice (SOV) for online mentions
Consideration   # of total "social" interactions
Leads/Sales     # of conversions driven from social media
Retention       # of repeat blog visitors
Advocacy        # of total positive mentions, reviews, or
                UGC shares
                        Image credit: DragonSearch http://j.mp/awarenessroi
More KPIs...
OBJECTIVE              KPI MEASUREMENT
Innovation      $ saved or generated as a result of social
                feedback
Market Research # of "focus groups" providing feedback
Customer        # of social support inquiries resolved
Service
Social PR       # of negative brand mentions resolved
                (Bonus: # converted to positive mentions)
HR Recruiting   # of candidates driven from social media

 Note: These KPIs are just examples. Select a metric that's most indicative of
                    progress for your organization's goals.
Social Media <Scope> Strategic Plan 2012
MISSION           GOALS
WHY ARE WE        WHAT DO WE WANT
DOING THIS?       TO ACCOMPLISH?
                  A                 Our planning
                      <GOAL>        progress thus far...
 <MISSION>
                      KPI:


                  B
                      <GOAL>
<SCOPE> Goals:
ü  <dept goal>
 A                    KPI:
                                    Remember:
ü  <dept goal>
 B                C                 Plan separate trees
ü  <dept goal>
 C                    <GOAL>        for each scope!
ü  <dept goal>
 D
                      KPI:
Step 6: Choose Tactics


     How will we
     accomplish our
     goals?
•  b




Balance risks: resources, technology, timing...
Understand & Chart How Social
 Channels Serve Your Goals...                      Insert
                                                 your goal
                                                  HERE!




                 @MagicLogix: http://j.mp/smmchannelsbygoal
Step 7: Define Metrics

     How will we
    measure tactic
       success?

      A safety net with
      multiple metrics
      would be nice...
Social Media <Scope> Strategic Plan 2012
MISSION           GOALS             TACTICS
WHY ARE WE        WHAT DO WE WANT   HOW WILL WE ACHIEVE
DOING THIS?       TO ACCOMPLISH?    OUR GOALS?
                  A                               ü  <Metric>
                                    <TACTIC>      ü  <Metric>
                      <GOAL>
                                                  ü  <Metric>
 <MISSION>                          <TACTIC>      ü  <Metric>
                      KPI:


                  B                               ü  <Metric>
                                    <TACTIC>      ü  <Metric>
                      <GOAL>
<SCOPE> Goals:                      <TACTIC>
                                                  ü  <Metric>
                      KPI:                        ü  <Metric>
ü  <dept goal>
 A
ü  <dept goal>
 B                C                               ü  <Metric>
                                    <TACTIC>      ü  <Metric>
ü  <dept goal>
 C                    <GOAL>
                                                  ü  <Metric>
ü  <dept goal>
 D                                  <TACTIC>
                      KPI:                        ü  <Metric>
Calculations
"ROI can only be calculated
  AFTER the investment has
yielded a return. It cannot and
    must not be estimated
 beforehand. Ever. Under any
        circumstances."
           ~Olivier Blanchard, @thebrandbuilder,
                          Social Media ROI [Book]
Why Measure SMM?
1. Justification/Feasibility
2. Value-Basis for Comparing Tactics
What we really need to do is:

  Cost-Benefit
 Analysis (CBA)
BENEFIT - COST = VALUE
             CBA: http://j.mp/costbenefitanalysis
Cost-Benefit Analysis
§    SM Labor                        §    Awareness
§    IT Labor                        §    Web Traffic
§    Tools & Software                §    Lead Generation
§    Opportunity Costs               §    Sales
§    Training                        §    Conversion
§    Risk                            §    Customer Retention
                                      §    Loyalty
                                      §    Advocacy
                                      §    Satisfaction
                                      §    Market Research
                     COST


                            BENEFIT
All that matters...




GROW REVENUE
                                              IMPROVE
                    REDUCE COSTS            SATISFACTION




               Reference: Jim Sterne's book, Social Media Metrics
GROW REVENUE - SOCIAL METRICS
What can you impact via social?

•    # of QUALIFIED LEADS
•    # of NEW CUSTOMERS
•    # of REPEAT CUSTOMERS
•    % of CONVERSIONS

Social Proof Examples:
Star-ratings, reviews, user-shared
photos/videos, # comments, # shares

                                Image credit: http://j.mp/awarenessroi
GROW REVENUE - SOCIAL MEDIA ROI CASE STUDY


    Cars.com Online Reviews
Pages with reviews had:

• 16% higher conversion rate
• 100% more traffic driven to dealer
 sites


                           Case Study: http://j.mp/carscomsmmroi
GROW REVENUE - SOCIAL MEDIA ROI CASE STUDY


   CareOne Social Sales Support
Customers coming through social channels:

• 179% higher conversion rate to
 complete a consultation form

• 732% higher rate of completed first
 payment

                         Case Study: http://j.mp/careonesmmroi
REDUCE COSTS - SOCIAL METRICS
Quantify the equivalent value as if you had to
pay for these:
                                                How much
•  MEDIA VALUE                                    would a
                                               photo/video
    –  # of Website Visits (social referrals)   shoot cost?
    –  # of Online Mentions
    –  # of Articles / Social PR
    –  # of User-Shared Content (Photos, Videos, Testimonies)
•  WEB SELF-SERVICE
•  REQUIRED STAFF TO CUSTOMER RATI0
GROW REVENUE & REDUCE COSTS - SOCIAL MEDIA ROI CASE STUDY


              Old Spice Videos
Correlation impact of social buzz:

• 27% sales increase year on year
 (since original Mustafa campaign)

• 55%-107% sales increase during
 the social media campaign

                           Case Study: http://j.mp/oldspicesmmroi
SATISFACTION - SOCIAL METRICS
Survey users for feedback and crunch Lifetime
Customer Value (LTV) numbers.

•    % of POSITIVE SENTIMENT IN MENTIONS
•    AVERAGE % of STAR-RATINGS (EACH LEVEL)
•    CUSTOMER SATISFACTION SCORE
•    % WHO FOUND WHAT THEY WERE SEEKING
•    LIKELIHOOD TO RECOMMEND %
•    # REPEAT WEB VISITS / WEB RECENCY


                  Compute LTV with Avinash: http://j.mp/calculateltv
REDUCE COST & IMPROVE SATISFACTION - SOCIAL MEDIA ROI CASE STUDY


InfusionSoft Social Customer Service


• 1:72 to 1:172                      reduced agent
 to customer ratio

• 10% higher customer satisfaction

                         Case Study: http://j.mp/infusionsoftsmmroi
Multichannel can
add confusion...
Quantify "Social Attribution"
•    Web analytics tracking
•    URL shortener (e.g. Bit.ly)
•    Social-specific promo codes
•    Third party tool analytics (e.g. Bazaarvoice)
•    Online surveys (e.g. Foresee, KISS Insights)
•    A/B tests
•    ASK the customer!
ACTION PLAN
1.  Assessment - Analyze current state, include SWOT
2.  Strategy - Map out social media plan by scope
3.  Pitch - Present top ideas to IMF
4.  Prep - Secure resources, budget, tools, training, etc.
5.  Implement - Execute the plan (Abort if necessary)
6.  Review - Analyze activity & ROI using multiple metrics
7.  Optimize - Gathers insights and improve for the sequel
Only                                     It's time for
                                         YOU to lead


20% of
                                           the way.




marketers measure
social media ROI.
  - eMarketer, 7 Guidelines of Achieving Social Media ROI, Feb 2010
KEY TAKEAWAYS
•  Define separate strategy for each scope/dept
•  Set clear objectives before picking tactics
•  Select high-level annual goal KPIs
   (resilient to tactical changes)
•  Use cost-benefit analysis (CBA) for justification
   and comparison
•  Focus on measuring the 3 key objective buckets
•  Recalculate CBA and ROI after implementation
"The impossible can
 become possible,
  IF... YOU'RE...
 AWESOME!"
          - Rhino [Disney's Movie, Bolt]
MISSION: Apply these tips and share this
   presentation, so your social media
     initiatives don't self-destruct!
Agent Angie Schottmuller
    @aschottmuller

           QUESTIONS?

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Social Media: ROI Possible

  • 1. HOW TO PLAN, JUSTIFY AND GAUGE THE VALUE OF SOCIAL MEDIA MARKETING EFFORTS Angie Schottmuller | @aschottmuller | SES San Francisco | Aug 14, 2012
  • 2. MISSION: Define ROI or tangible business value to justify use of social media.
  • 3. SOCIAL MEDIA: The intersection of technology and social interaction to create, share, or connect online.
  • 4.
  • 5. What is ROI? Formula: (BENEFIT - COST) X 100 ROI % COST Example: ($2000 - $500) X 100 300% $500
  • 6. Seems easy enough... So why is it so "impossible"?
  • 7. 77% of businesses lack sufficient resources for social media. Awareness Inc., State of Social Media Marketing, Jan 2012
  • 8. 70% of businesses plan to expand social media presence in 2012. Awareness Inc., State of Social Media Marketing, Jan 2012
  • 9. Growing Types of Social Media... •  Social Networks •  Social Sign-on •  Blogging •  Geosocial Sites •  Microblogging •  Crowdfunding •  Bookmarking •  Social Ads •  Media Sharing •  Streaming Content •  Discussion Forums •  Social Gaming •  Social Listening •  sCRM •  Review Sites •  Wiki •  Social Curation •  Social Commerce •  User-Generated Content
  • 10. Top 3 Reasons Social Media ROI Measurement is Rare: ü  Unclear Objectives ü  Too Many Metrics ü  Difficult ROI Measurement - eMarketer, 7 Guidelines of Achieving Social Media ROI, Feb 2010
  • 11. Who's feeling the pressure? Yup. Yeah! BIG TIME.
  • 12. So here's the plan: q  Clarify and align objectives/tactics q  Prioritize meaningful metrics q  Simplify measurement
  • 13. Strategic Planning Process 1.  Determine Scope WHO? 2.  Gather Business Goals 3.  Define Mission/Purpose WHY? 4.  Set Goals 5.  Define KPIs WHAT? 6.  Choose Tactics 7.  Define Metrics HOW?
  • 14. Social Media <Scope> Strategic Plan 2012 MISSION GOALS TACTICS WHY ARE WE WHAT DO WE WANT HOW WILL WE ACHIEVE DOING THIS? TO ACCOMPLISH? OUR GOALS? A ü  <Metric> <TACTIC> ü  <Metric> <GOAL> ü  <Metric> <MISSION> KPI: <TACTIC> ü  <Metric> B ü  <Metric> <TACTIC> ü  <Metric> <GOAL> <SCOPE> Goals: ü  <Metric> <TACTIC> ü  <Metric> KPI: ü  <dept goal> A ü  <dept goal> B C ü  <Metric> <TACTIC> ü  <Metric> ü  <dept goal> C <GOAL> ü  <dept goal> D ü  <Metric> <TACTIC> ü  <Metric> KPI:
  • 15. Step 1: Determine Scope What aspect of the business will use social media? Marketing & PR IT Research & Development Human Resources SOCIAL Customer Service MEDIA Sales Executives & Management Market Research See more: http://j.mp/6socialmedialisteners
  • 16. FOCUS. You can only wear one smart lens at a time.
  • 17. Step 2: Gather Business Goals What are this year's [SMART] business goals? (Specific to each scope) CUSTOMER SERVICE: (Example) •  Reduce average response time on inquiries •  Improve average satisfaction rate •  Reduce call volume costs via web self- service alternatives
  • 18. START Here: 80% of marketers incorrectly begin with tactics instead of goals. DO NOT START Here: Image credit: Jay Baer - http://j.mp/socialmediagoalfunnel
  • 19.
  • 20. Step 3: Define SM Mission/Purpose Why are we bothering with social media? (Specific to each scope) MARKETING: (Example) To build an army of advocates that in turn help build and maintain the brand's position.
  • 21. Step 4: Set Goals What do we want to accomplish? A <GOAL> Merge Mission with <MISSION> B <Scope> Goals to <GOAL> create social media- specific Goals. C <SCOPE> Goals: <GOAL> ü  <dept goal> A ü  <dept goal> B Note: Some <scope> goals ü  <dept goal> C may NOT be relevant for ü  <dept goal> D social media.
  • 22. ALL time must be accounted for. If what you're working on doesn't ABORT! align to a goal..... ABORT!
  • 23. Strategic Planning: Balanced Scorecard (BSC) 1-2 goals for each perspective. 1.  Customer 2.  Financial 3.  Learning & Growth 4.  Business Process
  • 24. Step 5: Define KPIs How will we measure goal success? Examples: OBJECTIVE KPI MEASUREMENT Awareness % share of voice (SOV) for online mentions Consideration # of total "social" interactions Leads/Sales # of conversions driven from social media Retention # of repeat blog visitors Advocacy # of total positive mentions, reviews, or UGC shares Image credit: DragonSearch http://j.mp/awarenessroi
  • 25. More KPIs... OBJECTIVE KPI MEASUREMENT Innovation $ saved or generated as a result of social feedback Market Research # of "focus groups" providing feedback Customer # of social support inquiries resolved Service Social PR # of negative brand mentions resolved (Bonus: # converted to positive mentions) HR Recruiting # of candidates driven from social media Note: These KPIs are just examples. Select a metric that's most indicative of progress for your organization's goals.
  • 26. Social Media <Scope> Strategic Plan 2012 MISSION GOALS WHY ARE WE WHAT DO WE WANT DOING THIS? TO ACCOMPLISH? A Our planning <GOAL> progress thus far... <MISSION> KPI: B <GOAL> <SCOPE> Goals: ü  <dept goal> A KPI: Remember: ü  <dept goal> B C Plan separate trees ü  <dept goal> C <GOAL> for each scope! ü  <dept goal> D KPI:
  • 27. Step 6: Choose Tactics How will we accomplish our goals?
  • 28. •  b Balance risks: resources, technology, timing...
  • 29. Understand & Chart How Social Channels Serve Your Goals... Insert your goal HERE! @MagicLogix: http://j.mp/smmchannelsbygoal
  • 30. Step 7: Define Metrics How will we measure tactic success? A safety net with multiple metrics would be nice...
  • 31. Social Media <Scope> Strategic Plan 2012 MISSION GOALS TACTICS WHY ARE WE WHAT DO WE WANT HOW WILL WE ACHIEVE DOING THIS? TO ACCOMPLISH? OUR GOALS? A ü  <Metric> <TACTIC> ü  <Metric> <GOAL> ü  <Metric> <MISSION> <TACTIC> ü  <Metric> KPI: B ü  <Metric> <TACTIC> ü  <Metric> <GOAL> <SCOPE> Goals: <TACTIC> ü  <Metric> KPI: ü  <Metric> ü  <dept goal> A ü  <dept goal> B C ü  <Metric> <TACTIC> ü  <Metric> ü  <dept goal> C <GOAL> ü  <Metric> ü  <dept goal> D <TACTIC> KPI: ü  <Metric>
  • 33. "ROI can only be calculated AFTER the investment has yielded a return. It cannot and must not be estimated beforehand. Ever. Under any circumstances." ~Olivier Blanchard, @thebrandbuilder, Social Media ROI [Book]
  • 34.
  • 36. What we really need to do is: Cost-Benefit Analysis (CBA) BENEFIT - COST = VALUE CBA: http://j.mp/costbenefitanalysis
  • 37. Cost-Benefit Analysis §  SM Labor §  Awareness §  IT Labor §  Web Traffic §  Tools & Software §  Lead Generation §  Opportunity Costs §  Sales §  Training §  Conversion §  Risk §  Customer Retention §  Loyalty §  Advocacy §  Satisfaction §  Market Research COST BENEFIT
  • 38. All that matters... GROW REVENUE IMPROVE REDUCE COSTS SATISFACTION Reference: Jim Sterne's book, Social Media Metrics
  • 39. GROW REVENUE - SOCIAL METRICS What can you impact via social? •  # of QUALIFIED LEADS •  # of NEW CUSTOMERS •  # of REPEAT CUSTOMERS •  % of CONVERSIONS Social Proof Examples: Star-ratings, reviews, user-shared photos/videos, # comments, # shares Image credit: http://j.mp/awarenessroi
  • 40. GROW REVENUE - SOCIAL MEDIA ROI CASE STUDY Cars.com Online Reviews Pages with reviews had: • 16% higher conversion rate • 100% more traffic driven to dealer sites Case Study: http://j.mp/carscomsmmroi
  • 41. GROW REVENUE - SOCIAL MEDIA ROI CASE STUDY CareOne Social Sales Support Customers coming through social channels: • 179% higher conversion rate to complete a consultation form • 732% higher rate of completed first payment Case Study: http://j.mp/careonesmmroi
  • 42. REDUCE COSTS - SOCIAL METRICS Quantify the equivalent value as if you had to pay for these: How much •  MEDIA VALUE would a photo/video –  # of Website Visits (social referrals) shoot cost? –  # of Online Mentions –  # of Articles / Social PR –  # of User-Shared Content (Photos, Videos, Testimonies) •  WEB SELF-SERVICE •  REQUIRED STAFF TO CUSTOMER RATI0
  • 43. GROW REVENUE & REDUCE COSTS - SOCIAL MEDIA ROI CASE STUDY Old Spice Videos Correlation impact of social buzz: • 27% sales increase year on year (since original Mustafa campaign) • 55%-107% sales increase during the social media campaign Case Study: http://j.mp/oldspicesmmroi
  • 44. SATISFACTION - SOCIAL METRICS Survey users for feedback and crunch Lifetime Customer Value (LTV) numbers. •  % of POSITIVE SENTIMENT IN MENTIONS •  AVERAGE % of STAR-RATINGS (EACH LEVEL) •  CUSTOMER SATISFACTION SCORE •  % WHO FOUND WHAT THEY WERE SEEKING •  LIKELIHOOD TO RECOMMEND % •  # REPEAT WEB VISITS / WEB RECENCY Compute LTV with Avinash: http://j.mp/calculateltv
  • 45. REDUCE COST & IMPROVE SATISFACTION - SOCIAL MEDIA ROI CASE STUDY InfusionSoft Social Customer Service • 1:72 to 1:172 reduced agent to customer ratio • 10% higher customer satisfaction Case Study: http://j.mp/infusionsoftsmmroi
  • 47. Quantify "Social Attribution" •  Web analytics tracking •  URL shortener (e.g. Bit.ly) •  Social-specific promo codes •  Third party tool analytics (e.g. Bazaarvoice) •  Online surveys (e.g. Foresee, KISS Insights) •  A/B tests •  ASK the customer!
  • 48. ACTION PLAN 1.  Assessment - Analyze current state, include SWOT 2.  Strategy - Map out social media plan by scope 3.  Pitch - Present top ideas to IMF 4.  Prep - Secure resources, budget, tools, training, etc. 5.  Implement - Execute the plan (Abort if necessary) 6.  Review - Analyze activity & ROI using multiple metrics 7.  Optimize - Gathers insights and improve for the sequel
  • 49. Only It's time for YOU to lead 20% of the way. marketers measure social media ROI. - eMarketer, 7 Guidelines of Achieving Social Media ROI, Feb 2010
  • 50. KEY TAKEAWAYS •  Define separate strategy for each scope/dept •  Set clear objectives before picking tactics •  Select high-level annual goal KPIs (resilient to tactical changes) •  Use cost-benefit analysis (CBA) for justification and comparison •  Focus on measuring the 3 key objective buckets •  Recalculate CBA and ROI after implementation
  • 51. "The impossible can become possible, IF... YOU'RE... AWESOME!" - Rhino [Disney's Movie, Bolt]
  • 52.
  • 53. MISSION: Apply these tips and share this presentation, so your social media initiatives don't self-destruct!
  • 54. Agent Angie Schottmuller @aschottmuller QUESTIONS?