Social Media ROI : Where is the money, honey?

$ 5000000

$4500000

ROIfor

Social Media

Why Social Media??General questions asked by executives when introduced to Social Media:

Why should I invest my valuable resources in Social Media?

What business impact it will have on my business?

What will be ROI in terms and time and resources invested?

What are the key metrics to follow for measuring ROI in terms of engagement, sales, brand loyalty and customer retention?

Types of Social Media ROI..

Revenue Generation

• Increase in number of new customers

• Increase customer retention

• Increase in how much people spend

• Increase in how often people spend

Cost Reduction

• Saving on product development cost

• Saving in research costs

• Saving on transaction costs

• Saving on technology or business costs

ROIMeasurement

Source: http://tomfishburne.com/2012/02/social-media-roi.html

It is difficult to measure social media ROI…….……

But have to find it……..

Things happen in sequence

Non financial Impact does not directly translate in ROI but necessary for business and financial impact

Investment in Social media:

Time, People and Money$$$$

Non-financial Impact

Business Impact

Financial Impact

$$$$

The sequence explained

Non-financial Impact •Brand Awareness•Brand engagement•Word-of-mouth

Business Impact•Increased revenue through new customers•Reduced advertising cost•Reduced customer service costs•Reduced product design cost

Financial Impact•Revenue Generation•Cost Reduction

$$$$

What the survey says…

58 % says that social media campaigns helps in generating more revenue but only 41% thinks that it reduces cost.

3 steps to

Social Media

ROI

•Measure the Conversion rate •Have

the increased number of visitors also increasing number of transactions?

Step 1

•Measure Cost reduction through customer engagement•Have

the increased followers and interactions decreasing the PR and CRM costs?

Step 2

•Measure the Financial Impact•How the

revenues and profits moving with social presence?

Step 3

3 Steps

Step 1: Conversion Rate

www.brandbuilder.wordpress.com

Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb0

2000

4000

6000

8000

10000

12000

14000

16000

18000

0

10000

20000

30000

40000

50000

60000Transactions

No. of Vistitors

Months

Tran

sacti

ons

No.

of V

isito

rs

Social media management campaign was launched in September.

As shown in graph:Customer transactions has increased along with increase in no. of visitors

Before Social Media Since Social Media

Step 2: Cost Reduction

Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb0

10000

20000

30000

40000

50000

60000

70000

80000PR Costs

CRM Costs

Followers

Conversations

MonthBefore Social Media Since Social Media

The number of followers and conversations have increasedWith Social media program.

As shown in graph:PR and CRM costs have first decreased and then increased due to increasing revenue. Overall, Both PR and CRM costs have decreased in proportion to sales revenue.

www.brandbuilder.wordpress.com

Step 3: Financial Impact

Mar AprMay Jun Jul Aug Sep Oct Nov Dec Jan Feb0

2

4

6

8

10

12

14

16

18

REVENUE (Millions)COSTS (Millions)PROFITS (Millions)

Before Social Media Since Social Media

www.brandbuilder.wordpress.com

The revenue has increased proportionally more than the cost. Thus increasing profit by the use of social media management

Now you may want to be more Social...

Dildar SinghSocial Media Analyst, Inrev Systems.E-mail: karan@in-rev.comM.no. : 08943400766

Reference

Slide No. Source1 http://www.accountservonline.com/Resources.html

2 http://hr2012.wordpress.com/2011/08/01/top-10-donts-for-hr-metrics/, http://searchengineland.com/acquisition-marketers-and-the-seo-roi-dilemma-70926, http://www.inflexion-point.com/Blog/bid/81928/Why-you-may-need-to-redefine-your-competition,http://www.winceron.com/BusinessApplications.aspx, http://businesstraining.com

5 http://tomfishburne.com/2012/02/social-media-roi.html

12,13,14 www.brandbuilder.wordpress.com

15 http://socialmediatoday.com/vanessa-dimauro/428672/social-mindhttp://www.lystproject.com/2012/03/01/what-in-the-heck-is-a-twitter/

Social Media Monitoring Platform Visit : www.simplify360.com for FREE Demo

If you make customers unhappy in the physical

world,

they might each tell 6 friends. 

If you make customers unhappy on the Internet,

they can each tell 6,000 friends.

- JEFF BEZOS

Social Media Management SAAS Infrastructure

Visit : www.simplify360.com for FREE Demo

If you make customers unhappy in the physical world,

they might each tell 6 friends.

If you make customers unhappy on the Internet,

they can each tell 6,000 friends.

- JEFF BEZOS