getting an roi from social media
DESCRIPTION
How to find an ROI on social media packed with case studies explaining how at Prohibition we prepare our detailed reports for each client.TRANSCRIPT
How to get an ROI from social mediaBy @chris_nortonBlog: www.chrisnorton.biz
Thursday 6th March 2014
Today’s agenda
• 8am–8.40am: Getting an ROI on social
media
• 8.40am-9am: Breakfast and networking
• 9am-9.30am: Google Analytics master
class
• More than fifteen years’ digital comms
experience. Set-up the UK’s first Online PR
agency in 2007
• Listed in Brand Republic’s top 30 marketing
bloggers in the world and just published the
official CIPR social media handbook
• Winner of several “Best Use of Social Media”
Awards
• Associate lecturer at Leeds Metropolitan
University on Digital Comms.
Chris Norton - MD
Prohibition services
Traditional PR
• Media relations
• News manufacturing campaigns
• Media training
• Insight and strategy
• Crisis communications
• Internal communications (e.g.
newsletters)
• Sponsorship management
Social media/online PR
• Social media strategy development
• Social Media Audits/Measurement
• Social community management
• Creative social campaigns
• Blogger relations programmes
• Community creation and development
• Content marketing initiatives
• Viral seeding
Client experience
Let’s start with a definition
In business, the purpose of the "return on
investment" (ROI) metric is to measure,
per period, rates of return on money
invested in an economic entity in order to
decide whether or not to undertake an
investment.
An example ROI Calculation
Applying this to social media
Easy, right?
WRONG!
Applying this to social media
Why?
• The higher up the sales funnel, the harder it
is to measure ROI
• Also, social media is not just about sales, it’s
about awareness
• With so many metrics to measure, where do
you start?
• 88% of marketing professionals didn’t
feel they could accurately
measure the effectiveness of their
social media campaigns. (Forbes)
• 52% said social media ROI was their
biggest frustration. (Forbes)
• Currently, 96% measure number of fans
and followers, 89% measure traffic,
84% measure mentions, 55% track
share of voice, and 51% track sentiment
The good news is…you’re not alone
• Fearing what it will say about
company effectiveness
• Lacking the right tools, will or
resource to collect data
• Failing to understand which data
is relevant
• Having the data but not knowing
where to begin
Source: Social Media Today
WHY are companies not measuring it?
Think of it like this…
‘The weight of a television set has nothing at all to do with the clarity of its picture. Even if you measure to a tenth of a gram, this precise data is useless.
Measuring nothing (with great accuracy)
A person's Klout scoreor the number ofTwitter followers shehas probably doesn'thave a lot to do withhow much influenceshe actually has.
Don’t be too quick to judge
So if you’re purely
looking for an
immediate
increase in your
sales.
Sell, sell, sell
The death of social ROI?
Some analysts claim:
• ROI in social media is no longer en
vogue
• ROI metrics are in decline
• Social media ROI is dying a death
However, to accept this 100%, is a
cop out.
Source BI Intelligence
ROI: Difficult, but not
impossible.
The good news…
• First of all, don’t always think of social media in terms ofsales.
• Tie in social media with your business goals – which ofthese can social media support?
• Build Brand Awareness?
• Improve customer satisfaction?
• Drive web traffic to your site?
• Create an engaged community of advocates?
• Grow your Customer Database?
• Boost Sales?
No one-size-fits-all
Once you have decided on your social media goals,
you need to decide which metrics you will use to
measure them.
• Website / blog traffic — (referral source is a social media channel)
• Website registrations — email marketing campaign
• Increase subscribers, followers, fans, +1s
• Increased engagement score
• Increase positive sentiment
• Organic search rankings
• Increased sales
• Increased leads
• Increase cost savings
• Increase number of mentions
• Decrease customer service inquiries
BUT – these numbers alone are not ROI!
Measure, measure and measure
0
1000
2000
3000
4000
5000
6000
7000
November December January
Can you now assign a financial value to each of these
goals?
• Sometimes this is possible – but not always
• Let’s look at where this IS possible
…Now we can look at ROI
Direct Sales
Social media and direct sales
We know social media can drive direct sales
• Consider a unique way people can buy from you that is exclusive to your social
media channels. E.g. a promo code, specific landing page or coupon available
only through Google+
• Then, track the sales that are generated through those initiatives. This is the
one place you can calculate true ROI.
Social media and direct sales
Dell Outlet
• The company’s yearly return on Tweets is $3.25m
SM Case Study - direct sales
Ultralase
‘engagement
marketing’
• Average treatment
worth £5,000
• Average of 40-60
conversations per
month.
• 4-6 bookings as a
result of SM.
Customer Service
Social media and customer service
Social media increasingly used
as a customer service channel,
and there’s huge benefits.
• 71% of consumers who experience a quick and
effective brand response on social media are likely
to recommend that brand to others. (NM Incite)
• Customers will spend 21% more if they receive
good customer service via social media
(Sentiment)
• The average number of people a social customer
will tell about a good customer experience: 42 but
a bad experience: 53. (American Express)
Social media and customer service
Social Customer service also presents
a good opportunity to calculate ROI
• What are the costs saved on customer
service via social media?
• Cost of dealing with a traditional
customer service enquiry via call centre
• Satisfaction rating
• How does dealing with that same issue on
social media vary?
Social media and customer service
Infusionsoft case study
• A web-based provider of marketing automation
software for SMEs.
• Social Customer Service was driven by
a frustration in how ineffective many of the
contact centre technologies were
• In 2011, the company had approximately 1
customer service agent for every 55
customers and a 77% customer satisfaction
rating
• Two years later, that ratio was 1 agent to 172
customers-- and with a 87% customer sat rating.
Traffic
Web traffic
Social media can be a huge
driver of web traffic. Not only
that, but it’s QUALITY traffic.
• Consumers are 71% more likely to
make a purchase if they arrive on
a website from a social network
(Frost & Sullivan 2013)
• 70% of active social network users
are already active online shoppers
(Nielson)
Traffic is money
Ask the right questions to estimate
the value of each click
• How many referrals are your social
media efforts driving to your website?
• How much do you already spend
on PPC?
• What is your average conversion
rate?
• What is your average basket size?
Student Wire - Our challenge
Summary of social media interaction
3,519 Likes on
11.2k Twitter
Followers
265 Pins and 17Boards on
252 Pinterest Followers
Strong community of students
Student Wire – In Summary
• All social media channels grew by more than 500%
• Sales increased by more than 600%
• Student Wire ranks 1st on Google for Online
Student Magazine
• Web referrals from all channels are increasing
month on month
• More than 300 articles have been written with 30
writers
What about consumer’s time?
Much of social media is about brandawareness and advocacy.
• If you genuinely value consumer engagement,then this is an obvious place to start toconsider an ROI
• Each time friends share a brand experience,they invest time and trust in theirrelationships.
• Each brand touch-point between thoseconsumers represents a commercial valuethat you’d have paid for through conventionalmedia channels
How could you apply this model to yourbusiness?
Consumer’s time
• No single metric for social ROI
• The devil is often in the detail
• Think laterally about how you can attribute monetary value to social activity
• Constantly adapt and evolve your measurement to suit
• Clearly defined goals and outcomes are key
• And of course produce a final insight report on the total impact of the initiatives. Success? Failure? Repeat? Or Rethink?
• Also get your head around Facebook/YouTube,Google+ Insights,Google Analytics, Sysomos, Follower Wonk, Tweet Reach, LeadForensics, Twitalyzer, Kred, Klout, Peer Index, Sprout Social and somany more.
And finally….
