Social Media ROI business measurement: @thebrandbuilder at #fusionmex

olivier alain blanchard@thebrandbuilder

Social Media:Business Measurement

Ways in which Social Media can help a business:Sales

Net New Customers, Increased Frequency of Transactions, promo exposureIncreased yield (average $ value per transaction), and product penetration

Customer SupportImmediate feedback and response, positive impact in public forum, cost reduction

Human ResourcesMore effective recruiting, online monitoring of employee behavior (risk management)

Public RelationsOnline Reputation Management, improved brand image via Social Web

Customer LoyaltyIncreased interactions, better quality of interactions, deeper relationship with brand,

Increased trust in brand, increased mindshare of brand, greater values alignment

Business IntelligenceKnow Everything. (No, really.)

Fact: Achieving spectacular results requires planning.

Funnels are good. Follow the ball.Funnels are good. Follow the ball.

Your company doesn’t need 1,000,000 followers.

Your company doesn’t need 1,000,000 followers.

Your company needs 10 – 1,000,000 new customers.

Conversions are gold.

SOCIAL MEDIA IS NOT FREE.

1. It takes skilled people.1. It takes skilled people.

2. It takes technology.2. It takes technology.

3. It takes time and effort.3. It takes time and effort.

… all of which are limited resources.… all of which are limited resources.

We have… rocks.

These resources=

100%of your budget

Head CountAdvertising

E-Marketing

Inbound Call Center

Sales Dept.Public Relations

MarketingI.T.

Accounting

These resourcesgenerate

100%of your business

Which buckets do we emptyto fill this new one?

Understand that a newSocial Media program’sfunding doesn’t appear

out of thin air.:

Okay fine. But if I’m going to take a chanceon this social media thing,

it had better make good businesssense! Why should I allocate

resources to it?

Reason #1:It will result in a cost reduction.

Maybe in customer service?You mentioned something about

business intelligence andmarket research?

Reason #2:It will generate more revenue.

I want more transactions, more net new customers,

more customer loyalty,etc.

Business Justification

SAY HELLO TO:

R.O.I.

R.O.I.RETURN ON INVESTMENT

THE R.O.I. EQUATION

Investment Expectation of return

ROI =COST OF INVESTMENT

(GAIN FROM INVESTMENT - COST OF INVESTMENT)

THE R.O.I. EQUATION

Truth about R.O.I.

ROI is a business metric, not a media metric.

ROI is 100% media-agnostic.

Only measuring digital or social won’t get you anywhere.

The idea with the most promise wins.

To prove it, you need a plan AND sound metrics.

Improvement + Cost Reduction Idea: Customer Service

Improvement + Cost Reduction Idea: Customer Service

- One CSR can handle several customers at once. - Customers don’t have to wait on hold.- “Accents” are no longer an issue.- Resolution times remain the same, but to thecustomer, they seem considerably shorter.- CSRs spend less time on each ticket.- 140 Characters keeps things simple.- Transparency of process = positive PR.- Added convenience for customers on the go.- Proactive Customer Service can generate loyaltyand capture market share. (Angry consumers could be a competitor’s customers.)- Even a 10% shift to twitter customer servicecould yield significant cost savings.- Run simulations and measure impact.

Other cost-reduction ideas:

Business Intelligence / Market Research

Increased Reach through SM = Lower CPI (cost per impression)

In-network recruiting = lower recruiting costs

Now, to generate more revenue…

Objectives should be specific.

F.R.Y.FREQUENCY, REACH, YIELD

Increase how often customers buy from us each monthIncrease the net number of transacting customersIncrease average spend per transactionEtc.

What if you aren’t “for profit?”

You still depend on some kind of revenue to function:Grants, funding, donations, membership fees, etc.

Same thing.

Revenue is revenue. Budgets are budgets. Money is money.

R.O.I. isn’t always the right question or focus:Sales

Focused on R.O.I.

Customer SupportNot typically focused on R.O.I.

Human ResourcesNot typically focused on R.O.I.

Public RelationsNot typically focused on R.O.I.

Customer LoyaltyR.O.I. helps measure customer loyalty (perceptions + activity)

Business IntelligenceNot typically focused on R.O.I.

SalesFocused on R.O.I.






R.O.I. isn’t always the right question or focus:

SalesFocused on R.O.I.






R.O.I. isn’t always the right question or focus:

Zero value, unless hype is your currency.

We’re doing Social Media! Woohoo!!!

The Problem.The Problem.

I’m a Social Media guru.Love isn’t about ROI, baby.Forget your greedy ways.

ROI is NOT:Return on InspirationReturn on InvolvementReturn on InnovationReturn on ImmersionReturn on ImaginationReturn on ImportanceReturn on InboundReturn on ImbecilityReturn on IgnoranceReturn on Incompetence

ROI is:Return on Investment.

R.O.I. Confusion - A tale of operational silos

Engagement R.O.I.Different Focus + Different perspective

Reason #1:COST REDUCTION

Reason #2:REVENUE GENERATION

Remember what Mr. Bossman said…

Okay, hotshot,You have your Social Media doohickey.

Now I’d better see some real results!Or else…

I shrank my PR budget by 20%and my outbound call budget by 40%.

Now I can afford a team of social mediaRock stars. Can I get a hellz yeah?

Woohoo!I have a job!!!

Dudes, we are ON THIS!!!

Let’s start engagin’!!!

I call dibs on theCorporate blog.

One Month Later…One Month Later…

ACCOUNTING

Cool.

Oh my! Look at all the newvisitors to our website!

and all of our FaceBook friends!Hot Damn, we even have

comments on the blog!

What about ourTwitternets?

This rocks!I never had it so

good!!!

Three Months Later…Three Months Later…

ACCOUNTING

Cool.

Monitoring to base…Monitoring to base…

Our Google Analytics are throughthe roof! Even our social mentions

are wicked good!We have liftoff!

Yeah but…What about

the P&L?

Measuring mediareally rocks my

world.

Six Months Later…Six Months Later…

ACCOUNTING

Anything?

Nope.

Nada.

What kind of mood is The old man in today?

Not good.He doesn’t care how many visitors

the website gets, or how manyeyeballs we estimate we’ve reached

unless it means we’re sellingmore stuff.

But why?Our website is getting

mad hits, Jack!And we have 3,000 followers

on Twitter now!

I’m sorry, son.If your Social Media program

is generating revenue, we aren’tseeing it. We need to allocate

resources where we canmake money.

It’s just business.

Darn it.This media measurement

stuff isn’t working.

We need to starttying this stuff to actualBusiness performance.

Where to start?Let’s see…

At the beginning?

Non-financial impact = potential.

ROI = actualized potential.

Social Media Activity - Vertical/Lateral

Ultimately, Social Media activity has to positively impact customer behaviors and drive revenue in order to deliver R.O.I.

Financial vs. Non-financial Impact

Non-Financial

Financial Are you converting this to this?

Step 1: Establish a baseline

8% YoY Growth

Step 2: Create Activity Timelines

Step 3: Monitor impact on conversationsWhat are people talking about and where?Map topics, keywords, trends, links, etc.

Step 4: Measure transactional precursors

Measuring transactional precursors

If you can, also look at # of transactions

Also measure net new customers

NNC is a measure of effective reach,not just media reach.

Transaction data should be specific


How often customers transact. (transactions per month)How many customers you are reaching. (net new customers)How much they spend. ($ per transaction)

Step 5: Finally, look at Sales Revenue

Step 6: Overlay your data onto a timeline

activities

transactions

social data

web data

loyalty metrics

etc.

We overlaid all of our timelinesand noticed that since our social media

activities began, our website visits are up,our social mentions are also up, and

everyone seems to love us.

So is there a discernable pattern

in this?

Step 7: Look for patterns

Before After

Impact

ImpactImpact

No Impact

Uncertain Impact

Step 8: Prove & disprove relationships

Before After

How was this groupTouched by SM or WOM?

(And how was it not?)

Look for patterns

Before After

Impact

ImpactImpact

No Impact

Uncertain Impact

Prove & disprove relationships

Before After

How was this groupTouched by SM?

How longwill all this

analysis take? It’s all a processof elimination, really.

Isolating patterns, quantifying deltas,proving ad-hocs…

Then allwe have to do is

figure out what the cost savings and revenue gains

are, and plug them into the equation.

Oh wow.This R.O.I. thing

wasn’t at all aboutmeasuring media,impressions and

eyeballs!

First things first: Prove that Social Media worksFirst things first: Prove that Social Media works

ACCOUNTING

All things remaining the

same…

We may have proof ofconcept.

Hot damn!

So it turns out that our Social Media program is impacting

every aspect of our business excepttraffic in our brick and mortar stores.Can you get on that? Yeah. We need

to find out why we aren’t havingan effect there. Kthxbye.

Proper R.O.I. Analysis helps identify areas of improvementProper R.O.I. Analysis helps identify areas of improvement

Dudes, we are ON THIS!!!

Let’s start engagin’!!!

I’ll start crafting somewicked blog posts.

More store traffic.Roger that.

Drinks for Everybody!

And please, no more of this.And please, no more of this.

I’m a Social Media guru.Behold my army of followers.My personal brand is golden.

Only measurefollowers, fans, visitors,

downloads, click-throughs,mentions and web stats.

That’s Social Mediameasurement, baby!

Dig it.

“Increasing revenue” is too abstract.


How often customers transact. (transactions per month)How many customers you are reaching. (net new customers)How much they spend. ($ per transaction)

Strategy drives tactics - Tactics drive metrics

FREQUENCY

REACH

YIELD

How can we leverage Social Media to influence customers tobuy from us more often?How can we measure changes in this behavior?

How can we leverage Social Media to acquire net new customers?How can we measure increased reach and conversions?

How can we leverage Social Media to influence customers to spend more per transaction?How can we measure changes in this behavior?

I just figured out how to increase deodorant sales

by about 9% without adding a single new

customer!

FREQUENCY

REACH

What a Social Media win looks like:

Facebook.com/oldspice

94,000 followersVelocity: 8K to 66K in only 2 days

16,000,000 viewsMost response videos >200,000 views

706,000 fans/likes… sharing videos with friends on their wall

Convert net new viewersinto net new transacting customers.

But will it “sell soap?”

Sales of body wash up 107% in the first month.(It’s a good start, but will it be enough to justify the campaign’s expense?)

(It already has.)

YIELD I know how to increase yield!!!

Let them eat cake!

Awareness

Run through it logically.

AwarenessCampaign*

RetweetJoin club

ShareEtc.

Altered PurchasingBehavior

Track appropriate metrics

Create a “take the challenge” page where users log their product purchase.CRM captures that data at point of sale.Same store sales increase but market share remains the same.Etc.

Measurement should not be a religion. Adapt: Measure what makes sense.

First things first: Campaigns

Media spendAttention

Campaigns are microcycles, not a strategy.

On their own, campaigns work, but have a limited value.

This is the goal. Campaigns on their own rarely do this.

Social Equity = stronger bond with customers

Every campaign supports the growth of your community.

Use campaigns to drive a larger strategy.

What’s your next move?


You are here



Plateau.



Campaign.



Increase.



Plateau.

Where is your attention?


Use social media to enhance key business functions to sustain value and engagement.

Use campaigns to jump-starta specific metric.

Ask away.

Olivier Blanchard864.630.7398www.thebrandbuildermarketing.com@thebrandbuilder (on Twitter)

FIND OUT MORE AT SMROI.NET

But wait… there’s more!

Measuring success: Defining metrics early

? ? ?? ?

Non-financial objective?

A leads to B leads to C leads to D...


? ? ?? ?

Non-financial objective?Start here.

Define Metric/value.What is my target?How much $ do I need to do this?


? ? ?? ?


Now move here.My $ target is $x.Where do I measure changes in $x?What behaviors leads to this?


? ? ?? ?


Now move here.My targets are X, Y and Z.My metrics are M, N and O.My channels are P, Q, R and SWhat behaviors drive these targets?

Plan first. Map out the route.Identify relevant metrics every step of the way.

Measure here…

Not here.

Now start from the beginning. 1. Baseline. 2. Timeline…You planned from outcome to catalyst.Now measure from catalyst to outcome.

R.O.I. = financial metrics within this process.

Your metrics

Q: What is the 2012 objective?

(Not 5,000,000 fans on Twitter)

A: Re-election.

Main non-financial objective(s)Get re-elected in 2012

Q: What is my most important resource?

A: Campaign funding. (It enables everything.*)

* Understand your business and its mechanics. If you don’t, you are flying blind.

Main non-financial objective(s)

My $ target is $x.Where do I measure changes in $x?What behaviors leads to this?

Q: How does Social Media fit in?

A: Above all else, it yields campaign contributions.

A: How it yields campaign contributions.1.Directly through vertical engagement

2.Indirectly, through lateral engagement (WOM + peer influence)


Let’s plug-in F.R.Y., just for fun.

Can we increase the frequency of contributions?

Note: Most Obama For America online supporters gave little, but they gave often. Frequency was a key factor in the O4A strategy.

Can we increase the frequency of contributions?

YES.Increase frequency of interactionsAsk more oftenUpdate swag more oftenRepeat message more oftenEngage more oftenSM is more cost effective than paid media


To specifically drive

Can we increase our reach?

Second largest search engine in the world, only to Google

Twitter now has over 100 MILLION registered users.

55,000,000 tweets per day.

37% of users tweet from their phones.

All talking to each other all day long.All talking to each other all day long.

Facebook has over 500 MILLION users

Millions of people are content publishers now.

Don’t forget…

Can we increase our reach?YES.Be everywhere.Seed and grow our channelsHelp our supporters share contentAsk our fans to share contentArm our fans with toolsMake our reach strategy clearVertical + Lateral engagement



Can we increase our Yield?

Can we increase our Yield?

YEP!Foster depth of engagementDevelop and build loyaltyIncrease involvement of fansUnderstand the value of timingBuild clarity of purposeAsk when we need to ask



Because the objectives dictate the tactics...

… the objectives also dictate the metrics.

The metrics are the vital signs of your program.

Every measurement you take has its place and tells its part of the story.

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Start here…

Ignore here.1

Connect the dots.

R.O.I. is a crucial link in the measurement chain.

Ask away.

Olivier Blanchard864.630.7398www.thebrandbuildermarketing.com@thebrandbuilder (on Twitter)

http://smROI.net