Olivier Blanchard Basics Of Social Media Roi

Olivier Blanchard
Olivier BlanchardPrincipal at BrandBuilder Marketing
Enough with,[object Object],the Social Media BS.,[object Object],Give me the realz.,[object Object],Social Fresh Conference // 24 August 2009,[object Object]
SOCIAL MEDIA IS NOT FREE.,[object Object]
1. It takes people.,[object Object]
2. It takes technology.,[object Object]
3. It takes time.,[object Object]
We have… rocks.,[object Object],… all of which are limited resources.,[object Object]
These resources,[object Object],=,[object Object],100%,[object Object],of your budget,[object Object],E-Marketing,[object Object],Each resource,[object Object],has a specific cost,[object Object],Head Count,[object Object],Advertising,[object Object],I.T.,[object Object],Inbound Call Center,[object Object],Each resource,[object Object],yields specific results,[object Object],Marketing,[object Object],Sales Dept.,[object Object],Accounting,[object Object],Public Relations,[object Object]
These resources,[object Object],generate,[object Object],100%,[object Object],of your business,[object Object],E-Marketing,[object Object],Losing  even 1% ,[object Object],of your budget’s efficiency ,[object Object],could seriously ruin ,[object Object],your day.,[object Object],Head Count,[object Object],Advertising,[object Object],I.T.,[object Object],Inbound Call Center,[object Object],Marketing,[object Object],Sales Dept.,[object Object],Accounting,[object Object],Public Relations,[object Object]
Okay fine. But if,[object Object], I’m going to take a chance,[object Object],on this social media thing,,[object Object],it had better make good business,[object Object],sense! Why should I allocate,[object Object],resources to it?,[object Object]
Reason #1:,[object Object],It will result in a cost reduction.,[object Object],Maybe in customer service?,[object Object],You mentioned something about,[object Object],business intelligence and,[object Object],market research?,[object Object],Reason #2:,[object Object],It will generate more revenue.,[object Object],I want more transactions, ,[object Object],more net new customers,,[object Object],more customer loyalty,,[object Object],etc.,[object Object]
Now go figure out what,[object Object],Program you have to cut,[object Object],to fund this Social Media thing.,[object Object],Remember that our bonuses,[object Object],are on the line.,[object Object]
Understand that a new,[object Object],Social Media program’s,[object Object],funding doesn’t appear,[object Object],out of thin air.:,[object Object],Which buckets do we empty,[object Object],to fill this new one?,[object Object]
SAY HELLO TO:,[object Object],Business Justification,[object Object],R.O.I.,[object Object]
R.O.I.,[object Object],RETURN,[object Object],ON,[object Object],INVESTMENT,[object Object]
THE R.O.I. EQUATION,[object Object],Investment,[object Object],Expectation of return,[object Object]
THE R.O.I. EQUATION,[object Object],(GAIN FROM INVESTMENT - COST OF INVESTMENT),[object Object],ROI =,[object Object],COST OF INVESTMENT,[object Object]
Truth about R.O.I.,[object Object],ROI is a business metric,,[object Object],  not a media metric.,[object Object],ROI is 100% media-agnostic.,[object Object],Only measuring digital or social won’t get you anywhere.,[object Object]
Reason #1:,[object Object],COST REDUCTION,[object Object],Reason #2:,[object Object],REVENUE GENERATION,[object Object],Remember what Mr. Bossman said…,[object Object]
I shrank my PR budget by 20%,[object Object],and my outbound call budget by 40%.,[object Object],Now I can afford a team of social media,[object Object],Rock stars. Can I get a hellz yeah?,[object Object],Okay, hotshot,,[object Object],You have your Social Media doohickey.,[object Object],Now I’d better see some real results!,[object Object],Or else… ,[object Object]
Woohoo!,[object Object],I have a job!!!,[object Object]
Dudes, we are ,[object Object],ON THIS!!!,[object Object],Let’s start engagin’!!!,[object Object],I call dibs on the,[object Object],Corporate blog.,[object Object]
Cool.,[object Object],ACCOUNTING,[object Object],One Month Later…,[object Object]
What about our,[object Object],Twitternets?,[object Object],Oh my! Look at all the new,[object Object],visitors to our website!,[object Object],and all of our FaceBook friends!,[object Object],Hot Damn, we even have ,[object Object],comments on the blog!,[object Object]
This rocks!,[object Object],I never had it so,[object Object],good!!!,[object Object]
Cool.,[object Object],ACCOUNTING,[object Object],Three Months Later…,[object Object]
Yeah but…,[object Object],What about,[object Object],the P&L?,[object Object],Monitoring to base…,[object Object],Monitoring to base…,[object Object],Our Google Analytics are through,[object Object],the roof! Even our social mentions,[object Object],are wicked good!,[object Object],We have liftoff!,[object Object]
Measuring media,[object Object],really rocks my,[object Object],world. ,[object Object]
Nope.,[object Object],Anything?,[object Object],Nada.,[object Object],ACCOUNTING,[object Object],Six Months Later…,[object Object]
What kind of mood is ,[object Object],The old man in today?,[object Object],Not good.,[object Object],He doesn’t care how many visitors,[object Object],the website gets, or how many,[object Object],eyeballs we estimate we’ve reached unless it means we’re selling,[object Object],more stuff.,[object Object]
But why?,[object Object],Our website is getting ,[object Object],mad hits, Jack!,[object Object],And we have 3,000 followers,[object Object],on Twitter now!,[object Object],I’m sorry, son.,[object Object],If your Social Media program,[object Object],is generating revenue, we aren’t,[object Object],seeing it. We need to allocate ,[object Object],resources where we can,[object Object],make money.,[object Object],It’s just business.,[object Object]
Darn it.,[object Object],This media measurement,[object Object],stuff isn’t working.,[object Object],We need to start,[object Object],tying this stuff to actual,[object Object],Business performance.,[object Object],Where to start?,[object Object],Let’s see…,[object Object],At the beginning?,[object Object]
Things happen in sequence.,[object Object]
Non-financial impact is not ROI (yet).,[object Object]
Types of non-financial impact,[object Object],Customer complaints,[object Object],Website Visitors,[object Object],Impressions,[object Object],Positive press,[object Object],Click-throughs,[object Object],YouTube views,[object Object],Retweets,[object Object],Coupons distributed,[object Object],Visitors to a brick & mortar store,[object Object],Positive WOM,[object Object],Delivered emails,[object Object],Negative press,[object Object],Negative WOM,[object Object],Employment applications,[object Object],Blog comments,[object Object],FaceBook friends,[object Object],Social mention,[object Object],Twitter followers,[object Object]
Non-financial impact = potential.,[object Object]
ROI = actualized potential.,[object Object]
Reason #1:,[object Object],COST REDUCTION,[object Object],Reason #2:,[object Object],REVENUE GENERATION,[object Object],Remember what Mr. Bossman said…,[object Object]
I need proof that,[object Object],what we’re doing,[object Object],is actually working.,[object Object],Start with proof of concept.,[object Object]
Step 1: Establish a baseline,[object Object],8% YoY Growth,[object Object]
Baselines illustrate deltas (changes),[object Object],Is something happening here?,[object Object]
Step 2: Create Activity Timelines,[object Object]
Step 2: Create Activity Timelines,[object Object]
Step 2: Create Activity Timelines,[object Object]
Step 3: Look at Sales Revenue,[object Object]
Step 3: Also look at # of transactions,[object Object]
Step 3: Also measure net new customers,[object Object]
Transaction data should be specific,[object Object],F.R.Y.,[object Object],FREQUENCY, REACH, YIELD,[object Object],How often customers transact. (transactions per month),[object Object],How many customers you are reaching. (net new customers),[object Object],How much they spend. ($ per transaction),[object Object]
The latest numbers indicate,[object Object],that our YoY sales $ are up 60%.,[object Object],Our individual transactions have doubled,,[object Object],as have our transacting customers.,[object Object],Something’s working! ,[object Object],Groovy!,[object Object],Let’s figure out what.,[object Object]
Step 4: Measure transactional precursors,[object Object]
Step 4: Measure transactional precursors,[object Object]
Step 4: Measure transactional precursors,[object Object]
We overlaid all of our timelines,[object Object],and noticed that since our social media,[object Object],activities began, our website visits are up,,[object Object],our social mentions are also up, and,[object Object],everyone seems to love us. ,[object Object],So is there a,[object Object], discernable pattern,[object Object],in this?,[object Object]
Step 5: Overlay all timelines,[object Object],activities,[object Object],social data,[object Object],web data,[object Object],transactions,[object Object],loyalty metrics,[object Object],etc.,[object Object]
Step 6: Look for patterns,[object Object],Impact,[object Object],Uncertain Impact,[object Object],Impact,[object Object],Impact,[object Object],No Impact,[object Object],Before,[object Object],After,[object Object]
Step 7: Prove relationships,[object Object],How was this group,[object Object],Touched by SM?,[object Object],Before,[object Object],After,[object Object]
How long,[object Object],will all this,[object Object],analysis take?,[object Object],It’s all a process,[object Object],of elimination, really.,[object Object],Isolating patterns, ,[object Object],quantifying deltas,,[object Object],proving ad-hocs…,[object Object],Then all,[object Object],we have to do is,[object Object],figure out what the cost ,[object Object],savings and revenue gains,[object Object],are, and plug them ,[object Object],into the equation.,[object Object]
THE R.O.I. EQUATION,[object Object],(GAIN FROM INVESTMENT - COST OF INVESTMENT),[object Object],ROI =,[object Object],COST OF INVESTMENT,[object Object]
THE R.O.I. EQUATION,[object Object],Investment,[object Object],Expectation of return,[object Object]
Oh wow.,[object Object],This R.O.I. thing,[object Object],wasn’t at all about,[object Object],measuring media,,[object Object],impressions and,[object Object],eyeballs!,[object Object]
All things remaining the same…,[object Object],We may have ,[object Object],proof of,[object Object],concept.,[object Object],Hot damn!,[object Object],ACCOUNTING,[object Object],First things first: Prove that Social Media works,[object Object]
So it turns out that our ,[object Object],Social Media program is impacting,[object Object],every aspect of our business except,[object Object],traffic in our brick and mortar stores.,[object Object],Can you get on that? Yeah. We need,[object Object],to find out why we aren’t having,[object Object],an effect there. Kthxbye. ,[object Object],Then use what you know to make it work better.,[object Object]
More store traffic.,[object Object],Roger that.,[object Object],Dudes, we are ,[object Object],ON THIS!!!,[object Object],Let’s start engagin’!!!,[object Object],I’ll start crafting some,[object Object],wicked blog posts.,[object Object]
Finally, someone with some,[object Object],real metrics for me to sink my teeth into!,[object Object],Good job, Sparky! You done gewd!,[object Object]
So I guess Social Media,[object Object],is going to stick around a little while,[object Object],longer after all, isn’t it?,[object Object],Yessir.,[object Object],Looks like our budget,[object Object],is safe for now.,[object Object]
Drinks for ,[object Object],Everybody!,[object Object]
Olivier Blanchard,[object Object],Principal, BrandBuilder Marketing,[object Object],864.630.7398,[object Object],www.thebrandbuildermarketing.com,[object Object],@thebrandbuilder(on Twitter),[object Object],www.smroi.net,[object Object]
Slideography,[object Object],Slide #			Source,[object Object],3, 9, 10, 11, 18-31, ,[object Object],37, 38,  48, 52, 56,,[object Object],59-65,[object Object],4,[object Object],6,[object Object],UFO (TV  series) ,[object Object],http://ufoseries.com/,[object Object],http://www.minnpost.com/stories/2008/06/18/2282/this_doesnt_compute_as_more_women_enter_scientific_fields_their_numbers_in_computer_science_are_declining,[object Object],Kim Jong Il puppet, from  “Team America”,[object Object],http://blogs.rockymountainnews.com/bridget/kimjongil.jpg,[object Object]
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