Basics of Social Media ROI

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Basics of Social Media ROI

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By: satishece (22 month(s) ago)

Very good presentation and very valuable http://www.freshdls.com

 

By: Hilarious (23 month(s) ago)

great presentation

Presentation Transcript

Slide 1: 

Enough with the Social Media BS. Give me the realz. Social Fresh Conference // 24 August 2009

Slide 2: 

SOCIAL MEDIA IS NOT FREE.

Slide 3: 

1. It takes people.

Slide 4: 

2. It takes technology.

Slide 5: 

3. It takes time.

Slide 6: 

… all of which are limited resources. We have… rocks.

Slide 7: 

These resources = 100% of your budget Head Count Advertising E-Marketing Inbound Call Center Each resource has a specific cost Sales Dept. Public Relations Marketing I.T. Accounting Each resource yields specific results

Slide 8: 

These resources generate 100% of your business Head Count Advertising E-Marketing Inbound Call Center Sales Dept. Public Relations Marketing I.T. Accounting Losing even 1% of your budget’s efficiency could seriously ruin your day.

Slide 9: 

Okay fine. But if I’m going to take a chance on this social media thing, it had better make good business sense! Why should I allocate resources to it?

Slide 10: 

Reason #1: It will result in a cost reduction. Maybe in customer service? You mentioned something about business intelligence and market research? Reason #2: It will generate more revenue. I want more transactions, more net new customers, more customer loyalty, etc.

Slide 11: 

Now go figure out what Program you have to cut to fund this Social Media thing. Remember that our bonuses are on the line.

Slide 12: 

Which buckets do we empty to fill this new one? Understand that a new Social Media program’s funding doesn’t appear out of thin air.:

Slide 13: 

Business Justification SAY HELLO TO: R.O.I.

Slide 14: 

R.O.I. RETURN ON INVESTMENT

Slide 15: 

THE R.O.I. EQUATION Investment Expectation of return

Slide 16: 

ROI = COST OF INVESTMENT (GAIN FROM INVESTMENT - COST OF INVESTMENT) THE R.O.I. EQUATION

Slide 17: 

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.

Slide 18: 

Reason #1: COST REDUCTION Reason #2: REVENUE GENERATION Remember what Mr. Bossman said…

Slide 19: 

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 media Rock stars. Can I get a hellz yeah?

Slide 20: 

Woohoo! I have a job!!!

Slide 21: 

Dudes, we are ON THIS!!! Let’s start engagin’!!! I call dibs on the Corporate blog.

Slide 22: 

One Month Later… ACCOUNTING Cool.

Slide 23: 

Oh my! Look at all the new visitors to our website! and all of our FaceBook friends! Hot Damn, we even have comments on the blog! What about our Twitternets?

Slide 24: 

This rocks! I never had it so good!!!

Slide 25: 

Three Months Later… ACCOUNTING Cool.

Slide 26: 

Monitoring to base… Monitoring to base… Our Google Analytics are through the roof! Even our social mentions are wicked good! We have liftoff! Yeah but… What about the P&L?

Slide 27: 

Measuring media really rocks my world.

Slide 28: 

Six Months Later… ACCOUNTING Anything? Nope. Nada.

Slide 29: 

What kind of mood is The old man in today? Not good. He doesn’t care how many visitors the website gets, or how many eyeballs we estimate we’ve reached unless it means we’re selling more stuff.

Slide 30: 

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’t seeing it. We need to allocate resources where we can make money. It’s just business.

Slide 31: 

Darn it. This media measurement stuff isn’t working. We need to start tying this stuff to actual Business performance. Where to start? Let’s see… At the beginning?

Slide 32: 

Things happen in sequence.

Slide 33: 

Non-financial impact is not ROI (yet).

Slide 34: 

Types of non-financial impact Website Visitors Click-throughs Visitors to a brick & mortar store Positive press Positive WOM Negative press Negative WOM Customer complaints Employment applications Retweets FaceBook friends Blog comments Social mention YouTube views Twitter followers Impressions Delivered emails Coupons distributed

Slide 35: 

Non-financial impact = potential.

Slide 36: 

ROI = actualized potential.

Slide 37: 

Reason #1: COST REDUCTION Reason #2: REVENUE GENERATION Remember what Mr. Bossman said…

Slide 38: 

I need proof that what we’re doing is actually working. Start with proof of concept.

Slide 39: 

Step 1: Establish a baseline 8% YoY Growth

Slide 40: 

Baselines illustrate deltas (changes) Is something happening here?

Slide 41: 

Step 2: Create Activity Timelines

Slide 42: 

Step 2: Create Activity Timelines

Slide 43: 

Step 2: Create Activity Timelines

Slide 44: 

Step 3: Look at Sales Revenue

Slide 45: 

Step 3: Also look at # of transactions

Slide 46: 

Step 3: Also measure net new customers

Slide 47: 

Transaction data should be specific F.R.Y. FREQUENCY, REACH, YIELD How often customers transact. (transactions per month) How many customers you are reaching. (net new customers) How much they spend. ($ per transaction)

Slide 48: 

The latest numbers indicate that our YoY sales $ are up 60%. Our individual transactions have doubled, as have our transacting customers. Something’s working! Groovy! Let’s figure out what.

Slide 49: 

Step 4: Measure transactional precursors

Slide 50: 

Step 4: Measure transactional precursors

Slide 51: 

Step 4: Measure transactional precursors

Slide 52: 

We overlaid all of our timelines and 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?

Slide 53: 

Step 5: Overlay all timelines activities transactions social data web data loyalty metrics etc.

Slide 54: 

Step 6: Look for patterns Before After Impact Impact Impact No Impact Uncertain Impact

Slide 55: 

Step 7: Prove relationships Before After How was this group Touched by SM?

Slide 56: 

How long will all this analysis take? It’s all a process of elimination, really. Isolating patterns, quantifying deltas, proving ad-hocs… Then all we have to do is figure out what the cost savings and revenue gains are, and plug them into the equation.

Slide 57: 

ROI = COST OF INVESTMENT (GAIN FROM INVESTMENT - COST OF INVESTMENT) THE R.O.I. EQUATION

Slide 58: 

THE R.O.I. EQUATION Investment Expectation of return

Slide 59: 

Oh wow. This R.O.I. thing wasn’t at all about measuring media, impressions and eyeballs!

Slide 60: 

First things first: Prove that Social Media works ACCOUNTING All things remaining the same… We may have proof of concept. Hot damn!

Slide 61: 

So it turns out that our Social Media program is impacting every aspect of our business except traffic in our brick and mortar stores. Can you get on that? Yeah. We need to find out why we aren’t having an effect there. Kthxbye. Then use what you know to make it work better.

Slide 62: 

Dudes, we are ON THIS!!! Let’s start engagin’!!! I’ll start crafting some wicked blog posts. More store traffic. Roger that.

Slide 63: 

Finally, someone with some real metrics for me to sink my teeth into! Good job, Sparky! You done gewd!

Slide 64: 

So I guess Social Media is going to stick around a little while longer after all, isn’t it? Yessir. Looks like our budget is safe for now.

Slide 65: 

Drinks for Everybody!

Slide 66: 

Olivier Blanchard Principal, BrandBuilder Marketing 864.630.7398 www.thebrandbuildermarketing.com @thebrandbuilder (on Twitter) www.smroi.net

Slide 67: 

Slideography Slide # Source 3, 9, 10, 11, 18-31, 37, 38, 48, 52, 56, 59-65 4 6 UFO (TV series) http://ufoseries.com/ 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 Kim Jong Il puppet, from “Team America” http://blogs.rockymountainnews.com/bridget/kimjongil.jpg