Easy Ways Retailers Can Measure ROI From Social Media Efforts

Easy Ways RetailersCan ROIMeasure From

Results and Lessons from 4 Likeable Retail Brands

Social Media Efforts3media

CONTENTS

EXECUTIVE SUMMARY ........................................................................................... 3

INTRODUCTION...................................................................................................... 3

SOCIAL MEDIA MEASUREMENT OVERVIEW ........................................................... 4

THREE EASY ROI METHODS FOR RETAIL BRANDS ................................................... 6

CASE STUDIES FROM 4 LIKEABLE BRANDS.............................................................. 6

Traditional ROI %: Cumberland Farms, Things Remembered, and The Company

Store ................................................................................................................... 6

Facebook Fan Value: Things Remembered ....................................................... 10

Coupon Redemptions: Midwestern convenience store .................................... 10

CONCLUSION ....................................................................................................... 10

ABOUT LIKEABLE MEDIA ...................................................................................... 12

WHITE PAPER | 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 2

www.likeable.com / 212.660.2458 / [email protected] / Copyright © 2012 Likeable Media

EXECUTIVE SUMMARY

Social Media Return on Investment (ROI) has

been on marketers’ minds for years. While

other marketing channels have relatively

consistent approaches to ROI, companies have

yet to land on an agreed upon method for

determining Social Media ROI. We developed

this paper to show how retail brands can

measure Social Media ROI using three easy

methods: Traditional ROI, Facebook Fan Value,

and Coupon Redemptions.

Each of the three methods is illustrated using

case studies from four Likeable retail brands.

Cumberland Farms created a Free-Chill-Zone-

Day that led to huge word-of-mouth success

with over half of sales attributed to Facebook.

Things Remembered carried out two

promotions that drew positive ROI – a well-

generated one-day social campaign for brides-

to-be and an in-store social promotion for

Facebook fans. The Company Store established

a presence on Pinterest and saw significant

sales in the first few months. Finally, a

Midwestern convenience store implemented an

ongoing weekly blast promotion through

Facebook and Twitter using unique price look-

up codes.

INTRODUCTION

Several studies have been released showing the

effects that social media has on consumer

behavior and sales. In April 2012, Forrester

Research released “The Facebook Factor,” a

report answering the question: How much more

likely are Facebook fans to purchase, consider,

and recommend brands compared with non-

fans? Using logistic regression modeling,

Forrester Research explored a variety of factors

that impact whether a consumer will consider,

purchase, or recommend a brand. The analysis

yielded the “Facebook factor” and proved that

Facebook fans

are much more

likely than non-

fans to consider,

purchase, and

recommend the

brands that they

engage with on

Facebook. In the case of Best Buy, Forrester

found that Facebook fans are about twice as

likely to purchase from Best Buy as non-fans.

Shortly after the Forrester Research report,

ComScore published in June 2012 “The Power

of Like 2: How Social Marketing Works,” a study

about the effectiveness of Facebook ads and

brand posts. In conjunction with Facebook,

purchase behavior for Facebook fans of brands

and friends of fans was analyzed against a

control group. In the case of Target, Facebook

fans who saw earned media messages in their

newsfeeds were 19 percent more likely to buy

products at Target than the group that did not

see the messages, and their friends were 27

percent more likely to do so. The study served

as an additional piece of evidence in order to

Figure 1 Forrester Research, April 2012

Facebook fans are

more likely than

non-fans to

consider, purchase,

and recommend

brands

http://blogs.forrester.com/gina_sverdlov/12-04-09-we_proudly_present_the_facebook_factor_forresters_facebook_impact_model_quantifies_the_impact_of_a_f

http://www.comscore.com/Press_Events/Presentations_Whitepapers/2012/The_Power_of_Like_2-How_Social_Marketing_Works

http://www.comscore.com/Press_Events/Presentations_Whitepapers/2012/The_Power_of_Like_2-How_Social_Marketing_Works



prove to marketers that social media can

deliver a measurable marketing ROI.

While the aforementioned studies involve

complex modeling and control groups,

measuring Social Media ROI can be simple.

Likeable Media compiled a number of case

studies in this report demonstrating three easy

ways for retail brands to better understand how

social media translates into real business value.

We will walk through the importance of social

media measurement, then highlight the

methods for measuring Social Media ROI for

retail brands, and finally dive into some retail

case studies that use each of the methods to

show a positive ROI.

SOCIAL MEDIA MEASUREMENT

OVERVIEW

Social media measurement continues to be a

top priority for marketers. According to the

2011

Marketing ROI

&

Measurement

Study in 2011

by Lenskold

Group, a

marketing ROI and measurement firm, 55% of

marketers surveyed responded that social

media measurement is a high priority. The top

reasons for its importance include:

the need to improve effectiveness

the need to improve integration

with other marketing

the pressure to report quantified

outcomes

We have written quite a bit on social media

measurement and have even produced an ROI

Best Practices eBook showing marketers:

how to best evaluate ROI on social

media networks

how to analyze metrics on specific

platforms

how measuring ROI is different for

each social media platform

Before marketers can measure anything or even

begin to establish Social Media ROI, we

recommend following these five simple rules:

Identify what success will look like

Do not measure everything

Understand that different metrics

matter to different people

55% of marketers

surveyed responded

that social media

measurement is a high

priority

Figure 2 ComScore, June 2012

Figure 3 Lenskold Group, 2011

http://www.lenskold.com/content/2011_ROI_study.html





http://www.likeable.com/blog

http://hub.likeable.com/download-free-roi?utm_campaign=Serena's-ROI-Blog-(May-14)&utm_source=Blog%20Post

http://hub.likeable.com/download-free-roi?utm_campaign=Serena's-ROI-Blog-(May-14)&utm_source=Blog%20Post

http://www.likeable.com/2011/08/5-rules-for-successful-social-media-measurement/



Do not rely on tools to provide the

analysis

Focus on the above four rules before

tackling Social Media ROI

The most important step above is to identify

ideal outcomes in order to measure results

comparatively.

What does success

look like? What are

you trying to

accomplish? What

is the return you are

after? Adding clarity to the term “success” will

help show progress. Without it, you will only be

showing results without any reference point.

In addition to identifying success, we reiterate

that for social media measurement do not only

focus on obtaining likes and follows. More

followers and likes do not directly translate into

a higher ROI for your brand. People are not

making purchasing decisions based on how

many likes a brand has. And the companies

bringing in the most revenue every year do not

necessarily have the most likes on their

Facebook pages.

Furthermore, with measurement, you cannot

and should not measure everything. It is so easy

to over-quantify in the space as there are easily

as many social media

measurement tools as

there are tactics. With

terms like “sentiment

analysis” and “net

promoter score”

being tossed around

everywhere, it is easy

to get persuaded into thinking you need to

measure everything. The reality is that you

really only need to measure what matters to

you and what will help craft a strategy moving

forward. One of the most basic rules of

measurement is to identify and articulate what

you want to measure.

Another way to improve your measurement

strategy is to tie your social activity with a web

analytics tool, such as Google Analytics. With

third-party tools, you can dive deeper into

metrics in meaningful ways such as:

Understand and improve your overall

social media results. You will not only

be able to report on social media

activity but how that activity translates

into more engaged visitors on your site,

more orders purchased, and more feed

subscribers, to name a few.

Track specific campaigns. See how

certain campaigns performed compared

with others when it comes to

acquisition, behaviors, and outcomes

on your website.

Once you identify what you want to measure

and have a strategy in place, demonstrating an

ROI for social media is attainable.

The next step is understanding the definition of

ROI. ROI is a common way for businesses to

evaluate success. This type of measurement for

social media specifically has been difficult to

grasp as many businesses are unsure how to

properly execute it. A look at Social Media ROI

helps businesses understand what is working

and what is not.

To put simply, Social Media ROI is a measure of

efficiency. The common and traditional financial

formula many use to calculate ROI is:

Adding clarity to

the term success

will help show

progress

With

measurement,

you cannot and

should not

measure

everything

http://www.likeable.com/2012/05/how-to-feel-luckyer-optimizing-your-social-strategy-with-google-analytics/

http://www.likeable.com/2012/05/how-to-feel-luckyer-optimizing-your-social-strategy-with-google-analytics/



Benefits typically refer to revenue, sales, or

savings from a campaign. Cost estimates are

usually the sum of the outcomes in the

following three areas:

People: The number of people who

worked on the campaign x amount they

spent on campaign x their hourly rate

Process: Any creative and marketing

costs

Technology: Any costs associated with

technology, systems, etc.

If an ROI result shows 250%, we can interpret

this as for every dollar spent on the campaign,

$2.50 in value was added to the bottom line. To

increase ROI, benefits ultimately need to grow

while costs and investments are held constant.

The higher the ROI, the more efficient and

effective the social media campaign. Where

marketers seem to

struggle is not on the

investment input –

that is easy to obtain

and plug in – but

rather the return

variable as it is far

more difficult to

quantify the benefits of social media.

THREE EASY ROI METHODS FOR

RETAIL BRANDS

Measuring Social Media ROI does not have to

be difficult. We have outlined three methods

using four case studies from Likable retail

brands that marketers can apply to show the

effectiveness of their marketing efforts. These

methods include:

Traditional ROI %

Facebook Fan Value

Redemptions

Each of these approaches is manageable,

valuable, and simple.

Using a traditional ROI % is as simple as

plugging in the investment amount spent on the

social media campaign, and the sales generated

from such, into the ROI equation. This method

is useful when the campaign or marketing

efforts in question have some sort of tracking

method, whether web tagging or a unique

product look-up (PLU) code for in-store

purchases.

Using the value of a Facebook fan is another

great way to measure Social Media ROI. By

devising promotions solely for Facebook fans,

retail brands can track their activities vs. non-

fans and validate if fans are more likely to

purchase (and by how much) than non-fans.

Finally, in addition to sales data, showing the

number of code redemptions as a result of the

social campaign or marketing also helps

measure the effectiveness.

CASE STUDIES FROM 4 LIKEABLE

BRANDS

TRADITIONAL ROI %: CUMBERLAND

FARMS, THINGS REMEMBERED, AND THE

COMPANY STORE

The following case studies illustrate how

positive ROI results can be obtained using the

traditional equation: ROI = (benefit – cost) /

cost %. Acquiring sales data that is directly tied

The higher the

ROI, the more

efficient and

effective the

social media

campaign



to a social campaign can be accomplished by

presenting unique passwords or codes to

customers during the purchase process.

Cumberland Farms

WHO: Cumberland Farms, a 50 year old

northeast gas station and convenience store.

The company bought Gulf Oil’s gas stations and

trademark in the Northeast back in 1986 and

now has 600 stores in 11 states.

WHAT: Major changes to the store design and

layout as well as increases in fuel consumption

were occurring around the time of the

promotion. During this time, Cumberland Farms

was trying to reach too many audiences.

However, they did appear to have a passion

product in their frozen beverage– the Chill Zone

product with very little promotion. Previously,

the company had been solely focused on

traditional media to drive sales. Likeable Media

recognized there was an opportunity to

leverage the passion for the product to drive

offline sales through many inactive advocates.

As a result, the “Mix Up Yours” campaign was

born.

A well-executed engagement strategy grew an

active community from no fans to over 150,000,

and a subsequent Free-Chill-Zone-Day

Challenge propelled the campaign into an

enormous Word of Mouth marketing success.

The Free-Chill-Zone-Day Challenge arose from

fans posting that they wanted more free Chill

Zone products. As a result, Cumberland Farms

responded with a challenge promoted only on

Facebook: if the fan base reached 50,000 Likes

within 22 days, a Free Chill Zone Day would take

place.

HOW: A Facebook password was needed in

order to redeem the drink. Cashiers then

recorded those who used the password during

transactions and as a result, sales numbers

could ultimately be tied to this promotion.

Using the investment dollars that were put into

the promotion and the revenue that was

generated from such, the ROI was calculated.

RESULTS: In addition to the goal being reached

in 10 days, the campaign:

Had 50% of sales directly tied to

Facebook

Figure 4 Facebook wall post and cover photo for Cumberland Farms

Figure 5 A Cumberland Farms store during the Free Chill Zone Day

WHITEPAPER | 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 8


Increased Chill Zone redemption rates

by 20% in the first year and 23% in the

second year

Overall, the Mix Up Yours campaign generated

a 228% in ROI for Cumberland Farms. While

the sales information is proprietary and cannot

be disclosed, the following formula was used to

determine the ROI:

Things Remembered

WHO: Things Remembered is the nation's

largest and most prominent retailer of

personalized gifts with 600 retail stores in 48

states.

WHAT: Summer is the busy season for

weddings. Things Remembered wanted to

celebrate brides-to-be and offer its Facebook

fans an opportunity to attend exclusive events

at their local retail store. Attendees were given

a free personalized gift, private shopping, and

received expert advice by simply showing their

“engaged” Facebook status in stores via their

smartphones or a print-out. This one day only

social campaign run through Likeable Media

was promoted starting two weeks prior to the

event via frequent Facebook and Twitter

content, Facebook ads, and one email blast.

HOW: Since a free personalized gift was given

away as part of the promotion, cashiers were

able to record all transactions that included

such and thus all revenue tied to this promotion

was recorded. Using the investment that was

put into the promotion as well as the revenue

numbers generated, the ROI for this campaign

was calculated.

RESULTS: For the one day promotion, Things

Remembered saw some notable outcomes:

53% of all stores had a transaction that

included the free gift

Of the stores that did have a

transaction, the average store pulled in

one additional transaction and one

third of stores had additional sales on

top of the free offer

23.6% of the revenue increase for this

day compared to the same day last

year came from sales related to this

promotion

Overall, the Bride to Be Promotion had a 670%

ROI. While the sales information is proprietary

and cannot be disclosed, the following formula

was used to determine the ROI:

Figure 6 Facebook tab and ad used in the Brides-to-Be Promotion

ROI = Benefits – Cost Cost

ROI = 670%


ROI = 228%



The Company Store

WHO: The Company Store, founded in 1911,

manufactures quality down and bedding

essentials. With a limited number of retail

stores, The Company Store relies on most of its

sales from its website and catalog.

WHAT: Pinterest is one of the fastest growing

social media sites according to “The 2012 Digital

Marketer: Benchmark and Trend Report” from

Experian Hitwise. The Company Store saw a

great opportunity to use Pinterest to increase

traffic to its website and ultimately drive sales

given that:

The demographics of Pinterest users

are also the key demographics for

customers of The Company Store.

According to ComScore, around 68% of

Pinterest users are women and 27% are

between the ages of 25-34. The

Company Store recognized Pinterest as

a prime opportunity to target their

demographic on a network that they

were already using.

Many design bloggers interested in The

Company Store products were already

using Pinterest and had been for a long

time. Launching a profile on Pinterest

would be a great way for the bloggers

to share The Company Store boards,

pins, etc.

The Company Store relies on orders

mainly from its website and catalogue.

This further proved the need to have a

presence on Pinterest as this site would

presumably drive additional visits and

sales to the website.

HOW: The Company Store used Likeable Media

to develop its Pinterest profile and boards. By

using a web analytics tool, sales generated from

customers coming from Pinterest were

documented. Incorporating the investment that

was put into maintaining the Pinterest account

as well as sales tied from the site into the ROI

formula, the ROI for this campaign was

calculated.

RESULTS: In its first 2 months on Pinterest, The

Company Store had:

35 boards on Pinterest with more than

600 total followers

Over 29,500 visits to its website driven

from Pinterest

Significant sales from Pinterest

Overall, Pinterest has driven a 224% ROI for

The Company Store. While the sales

information is proprietary and cannot be

disclosed, the following formula was used to

determine the ROI.

Figure 7 The Company Store’s profile on Pinterest


ROI = 224%

http://go.experian.com/forms/experian-digital-marketer-2012

http://go.experian.com/forms/experian-digital-marketer-2012



FACEBOOK FAN VALUE: THINGS

REMEMBERED

The next case study shows how positive ROI

results can be measured using the value of a

Facebook fan. Showing sales data directly tied

to Facebook fans can be attained by asking

customers to show their fan status (for a special

deal perhaps) during the check-out process and

would ultimately be recorded during the

purchasing process.

Things Remembered

WHO: Things Remembered is the nation's

largest and most prominent retailer of

personalized gifts with 600 retail stores in 48

states.

WHAT: Things Remembered wanted to offer

Facebook fans the opportunity to earn double

rewards on purchases through an in-store

promotion. The goals were simple:

Increase Facebook Fans

Drive sales

Customers needed to like Things Remembered

on Facebook on their mobile device while in the

store to receive the double rewards. The

promotion ran from October 31, 2011 - January

16, 2012 across all 600 retail stores.

HOW: Upon checkout in stores, customers

showed the cashiers that they “liked” Things

Remembered on Facebook using their mobile

phones. For all transactions during the

promotion period, the cashiers would record

whether or not the purchaser was a Facebook

fan of Things Remembered.

Sales during this period were then ultimately

tied to the Facebook fan factor.

RESULTS: The campaign was a huge success and

showed some impressive outcomes:

20% of buyers liked Things

Remembered on Facebook during the

promotion time period.

63% of Facebook fans were new to the

company.

Overall, Facebook fans purchasing during the

promotion time period had a 35% higher

Average Dollar Sale (ADS) than non-fans.

COUPON REDEMPTIONS: A MIDWESTERN

CONVENIENCE STORE

The final case study shows how ROI can be

measured using codes redeemed from social

campaigns. Sales data directly tied to social

sites can be achieved by providing unique codes

for fans/followers that they can use during the

check-out process.

Figure 8 Mobile version of Facebook page for Things Remembered



A Midwestern Convenience Store

WHO: Company with chain of convenience

stores in the Midwest.

WHAT: To reward Facebook fans and Twitter

followers and ultimately increase sales, the

Midwestern convenience store created an on-

going promotion with Likeable Media by giving

out free items weekly on Facebook and Twitter.

Using the unique price look-up (PLU) code,

customers would tell it to the cashier or show it

on their phone in order to receive the item.

HOW: A different code was provided via Twitter

and Facebook posts each week for the

promotional item. Once in store, the customer

would provide the code to the cashier upon

check-out and the cashier would then record it

in the system. All transactions using the unique

PLU code were therefore tracked.

RESULTS: With the promotion blasts, the

Midwestern convenience store has seen 56,173

codes redeemed that are tied directly to

Facebook and Twitter just in the span of one

year.

CONCLUSION

We have laid out three easy methods for retail

brands to measure Social Media ROI: Traditional

ROI %, Facebook Fan Value, and Coupon

Redemptions. Use these methods and follow

the approaches taken in the case studies to

understand and show how social media

translates into real business value and how

campaigns can demonstrate a positive ROI. Of

course, everything should tie back to your core

business goals.

Figure 9 Example of promotion post on brand’s Facebook page

Likeable Media is an award-winning, global social media and word of mouth marketing firm with a focus on the creation of compelling content. Likeable Media has worked with over 200 brands such as The Company Store, Things Remembered, Omaha Steaks, 1800flowers.com, Quality Dairy, Cumberland Farms, The Pampered Chef, Pendaflex, Ritani, Verizon, and Logitech. Likeable Media is recognized as one of Facebook's top 90 Preferred Developer Consultants, and is the only agency to win three consecutive WOMMY awards from the Word of Mouth Marketing Association (WOMMA). Likeable Media was named #118 and #146 in 2011 and 2012, respectively, on the Inc 500 Fastest-Growing U.S. Companies. Likeable consists of Likeable Media, as well as the corporate training program, Likeable U, and the small business software product, Likeable Local.

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Want to learn more? www.likeable.com

[email protected]

About Likeable Media

For more information on how social media can drive ROI for your brand, please email Mallorie Rosenbluth at [email protected].

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Easy Ways Retailers Can Measure ROI From Social Media Efforts