I have spent the better part of the last few months doing one thing for clients: conducting Social Media Audits to help sell the need to engage socially to internal decision makers! I think it is a shame that a vast majority of my work revolves around using data, research, analytics and best practices to help companies sell the concept to 3 parties:
- Venture Capitalists
- Board Of Directors (many times the same as venture capitalists)
- C-Level Executives
Essentially taking away the risk factors and nail down everyone’s favorite term-ROI! Let’s call a spade a spade! ROI is the binky executives use to disguise fear! Fear of the unknown. Traditional marketing is pushing the message you want your constituents to read and know. Social Marketing is opening up the door of multiple channel communications between, in some circumstance, all the constituents involved with a brand. With the brand always being the centerpiece of those interactions. Social Media creates a solar system for a brand with multiple satellites of interaction channels, some large, some small.
I have signed NDA’s and am not by law able to show the work I have done for clients. But ultimately what we are working towards is removing the risk, educating and ultimately establishing the ROI. With that, here is the list of ROI avenues the organization can travel to see real ROI. Bear in mind, this is not your grandparents ROI. It is not always all about new revenue. There are thousands of blogs that exist that explain this ad nauseum, but it can’t hurt to have another!
ROI IN SOCIAL MEDIA AND SOCIAL NETWORKING:
- Market Research- Listen to your business constituents and competitors to listen, learn, engage and stay relevant. Have the pulse of your industry in your back pocket to reference whenever you need to.
- Customer/Partner Education- A knowledgeable prospect is more likely to become a customer. A knowledgeable customer is more likely to buy your new product.
- User Groups 2.0-Traditional user groups are evolving into social communities. Doing this helps fulfill multiple business objectives outlined in this list.
- Product Innovation- When you listen to your customers and innovate to their voice-you will win their business over and over again. Not to mention create better products in the long run. This is a proven case study of success.
- Business Intelligence & Competitive Analysis- Social Media allows you to open up channels to understand your business and competitors like never before. This intelligence has a value greater than any one sale or new lead.
- Peer‐Based Support, Education & Innovation- Let your peers and customers sell, educate and innovate for you. Collaboration drives all three and will let you shave your customer service, marketing and new product development costs.
- Thought leadership/Leads- Be the leader in your industry and you will develop serendipitous lead generation, new sales and new business opportunities that were not available before.
- Workplace Alignment, Communication & Training – Create a private community for your organization and another for your business partners. This will drive a culture of productivity and transparency. The end result is more bang for your buck from your work force, a birds-eye view of your business, knowledge retention (the baby boomers are retiring and with that their knowledge is disappearing-capture it now!), employee ideas (it is also advised to listen to your employees and innovate internal process to their voice). Listening and interacting builds employee loyalty.
- Brand Awareness & Affinity- When you engage, adapt, innovate and are an accessible organization (culture) your customers will come back to you over and over. New folks will take notice over your competitor that has a closed door policy. Same with your employees and business partners.
I have been successful at using data, industry research, competitive analysis, setting realistic benchmarks and layering in Social Analytics to make recommendations on how an organization should engage. Many times it is in 3 phases. I like to call them the safe phase (only after the education of the 3 groups above), the pilot phase and then finally the full assault phase. It works! But if we lived in a utopian society, the selling internally would end. As for case studies? Most case studies are intellectual property that organizations don’t want to share. Thus, I sign NDA’s constantly! Not to mention every engagement is vastly different. So piggybacking on someone elses success and hard work will not work. So please stop asking for case studies! I challenge all companies to come up with something unique and new to them and their industry. Push the envelope of creativity to engage social media in a way that has never been done before.
Please use this blog as you see fit. If it helps one company sell internally then I have done my job. Also, if there is a business objective I missed, please feel free to add it in the comments and I will add it to the list and give credit where credit is due. Again, I am simply doing this so that I can help the companies I consult to actually “do” their plans, not having to sell it to the higher ups who..lets face it…don’t really understand Social and real business objectives! That explains the incessant question “What’s the ROI?” There is way too much of a cross section of companies, large and small, that are in the same boat for it to be coincidence. The recession is turning; it is time for more action and less asking what the ROI? Engaging socially is simply not as simple as asking-what is the ROI?
Great read Derek! I think the closest you can get to traditional sales/roi with social media is by “energizing” existing customers so they help sell each other. Which is something I know Forrester talks about.
We have coined a new phrase for ROI here at Tisha that we think really resonates ….
ROI is simply a Return On Ideas… Because that is the job of marketers today…. Show what happens from the idea. The end result never should be the money… that will always come… The benefit and success measurement comes from the fact the you we tasked with engaging the consumer with an idea…and you did it!
I love your “This isn’t your grandgather’s ROI”. It’s not your Father’s or even your brother’s ROI. Its very different.
I try to explain to clients that they can’t think of social media marketing in the same way that they think of “regular” marketing. It is a very different animal. The audience is different, the goals are different, and the commitment and frequency are different.
Its also hard for traditional marketers to even grasp the concept and value of social reach. When those case studies start popping up on Good Morning America, then the public will start to get it, In the meantime, the early adopters will continue the trailblazing.
Derek – Gutsy post.
The economy has companies examining ROI to the point of causing companies to be fearful of actually of taking calculated chances for success. The real ROI is actually staring organizations in the face. It is actually ROC Return on Customers or ROE = Return on Employees depending on whether the social networking investment is internal or externally focused. There are hard and fast ROI calculators out there. I had one that I could believe in at my last employer which could monetize the savings on both alumni and employee communities.
What many people looking at an investment in social networking/media/communities miss is that the train with the investment has left the station. They have already invested in obtaining your customers or employees. By investing in hosting the conversation, you manage the grapevine. That means the grapes, wine, juice, vines, and more are yours… not your competitors or future competitors. Leverage your customers for your brand promotion, product development, and quality feedback. Hey… the folks at P&G, Ford Motor Company, Bissel and many more do it?
I think the return question on “What is my ROI?” What is one customer, new idea, quality improvement worth to you in the court of public opinion?
I think the other way is to show people how they are already using web 2.0 in their personal lives already. Do you read reviews on Amazon prior to making a purchase? Do you ask your co worker for a dentist recommendation? Are you on Linked IN, facebook, twitter? What have you heard about wins with social networking?
What really needs to be communicated about our industry the famous FDR quote about Fear, “The only thing you have to fear is fear itself” I would add … also fear not having a good business plan and understanding of objectives is something to fear. However, it sounds like you are removing that with your in depth analysis of their program and opportunities for wins. Hang in there!
Thanks for all the great posts. I also think that while we are talking ROI I repost this post from Bazaar Voice: http://www.bazaarvoice.com/industryStats.html Great stats and points to use internally!
Industry Statistics
We continuously post the latest industry information here. In addition, you can read more than 30 success cases from our clients.
Keep up-to-date with Bazaarvoice. Sign up for email updates on new research, stats, and case studies.
Power of Word of Mouth
* “Person like me” still most trusted source for information about a company and, therefore, products. (Edelman Trust Barometer, November 2007)
* Recommendations from family and friends trump all other consumer touchpoints when it comes to influencing purchases, according to ZenithOptimedia. (AdAge, April, 2008)
* Recommendation is the number one reason for choosing a particular site. (Royal Mail’s Home Shopping Tracker Study, September 2007)
* Users who contribute product reviews or post messages visit sites nine times as often as noncontributors do. Contributors also make purchases nearly twice as often. (McKinsey & Co./Jupiter Media Metrix study, January 2002)
* Review users noted that reviews generated by fellow consumers had a greater influence than those generated by professionals. (comScore/The Kelsey Group, October 2007)
* Adult Internet users surveyed chose recommendations from friends as the one type of promotion they consider most worthwhile. (DoubleClick, May 2007)
* Consumers trust friends above experts when it comes to product recommendations (65% trust friends, 27% trust experts, 8% trust celebrities). (Yankelovich)
* Consumers say that word of mouth is still the number one influencer in their apparel (34.3%) and electronics (44.4%) purchases (Retail Advertising and Marketing Association/BIGresearch Study, November 2008)
* According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study’s respondents. (Nielsen, “Word-of-Mouth the Most Powerful Selling Tool”, October 2007)
* The two leading reasons people contribute content to social shopping sites are the need to feel part of a community (31%) and recognition from peers (28%). (IBM Institute for Business Value, August 2007)
* There were nearly 116 million US user-generated content consumers in 2008, along with 82.5 million content creators. Both numbers are set to climb significantly by 2013 (eMarketer, February 2009)
* Online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions. (“Social Networking Sites: Defining Advertising Opportunities in a Competitive Landscape,” JupiterResearch, March 2007)
* 86.9% of respondents said they would trust a friend’s recommendation over a review by a critic, while 83.8% said they would trust user reviews over a critic. (Marketing Sherpa, July 2007)
* Two thirds of UK social networkers (66%) are more likely to buy a product as a result of a recommendation, compared to 52 per cent of non-social networkers. (Royal Mail’s Home Shopping Tracker Study, September 2007)
* Tech decision makers give user-generated sites equal importance to traditional media sources when considering tech purchases. Decision makers consider their personal experience (58%) first when short-listing tech vendors, followed by word-of-mouth and industry analyst reports, tied at 51%. Advertising (17%) and direct marketing (21%) were listed as the least important information sources when short-listing possible vendors. (Study: “Tech Decision Maker,” Hill & Knowlton, January 2009)
Consumer Demand for Ratings and Reviews
* Online reviews are second only to personal advice from a friend as the driver of purchase decisions; user reviews are more influential than third-party reviews. (“Web users and web community,” Rubicon Consulting, Inc. October 2008)
* 81% of online holiday shoppers read online customer reviews (Nielson Online, December 2008)
* 86% of consumers read online business reviews before making purchasing decisions; 90% of whom say they trust these reviews. (Kudzu.com survey of 600 users, December 2008)
* The Trust in Advertising survey of 26,000+ found that Consumer Recommendations are the most credible form of advertising. (“Social Media Marketing: The Right Strategy for Tough Economic Times” Awareness, 2008)
* Nearly 49% of shoppers have made a purchase based on a recommendation through a social media property; respondents most relied on the following sources when making a purchase decision: 60.53% user reviews; 20.48% comparison charts; 15.41% editorial reviews; 3.58 shared shopping lists. (Razorfish, October 2008)
* Almost two-thirds (62%) of consumers read consumer-written product reviews on the Internet. (Deloitte & Touche, September 2007)
* When asked what sources of information they are “very likely” to consult before making a decision about their entertainment options, 62% named Web sites with user reviews as their top choice, even beating out a knowledgeable friend (59%). (Marketing Sherpa, July 2007)
* 46% of Britons now read online reviews or recommendations on a specific product before buying it and 32% are willing and able to publish a review online – but only 19% would be prepared to write a letter to a retailer. (1&1 Internet survey of 1600 consumers, December 2008)
* Seven in 10 (69%) consumers who read reviews share them with friends, family or colleagues, thus amplifying their impact. (Deloitte & Touche, September 2007)
* As of October 2008, almost half of US online adults read ratings and reviews at least once a month, and 19% post them. Nearly twice as many read reviews compared with 2007. (The Growth Of Social Technology Adoption, Forrester, October 2008)
* Nearly half (49%) of shoppers intend to do their holiday gift buying online (versus in-store), and 72% are planning to research products online prior to purchasing (vs. 65% in 2007). (“Mindset of the Multi-Channel Shopper Holiday Survey,” e-tailing group, October 2008)
* 74% agree-including 14% who strongly agree-that they choose companies and brands based on what others say online about their customer service experiences, the survey shows. (Society for New Communications Research, May 2008)
* 58.7% of shoppers said they used product reviews to make decisions. Reviews rated higher than clearance sale pages (56.4%) and featured sale pages (51.3%). (Shop.org, November 2007)
* Compared to a base group that didn’t read or contribute product reviews at all, people who read a review were 30% more likely to purchase a product and visitors who wrote a review were 80% more likely to convert, based on analysis across several Coremetrics clients. (Coremetrics, reported in BtoB, March 2007)
* Among the 46% of respondents who had posted or planned to post reviews about their online shopping experience, 88% said those reviews either were, or would be positive. (Nielson, 2007)
* More than eight in ten (82%) of those who read reviews said that their purchasing decisions have been directly influenced by those reviews. (Deloitte & Touche, September 2007)
* 55% of surveyed Internet users consulted other people’s opinions online, making reviews the #1 resource for product research. (Avenue A/Razorfish “Digital Consumer Behavior Study,” October 2007)
* In a study of 2,000 shoppers, 92% deemed customer reviews as “extremely” or “very” helpful. (eTailing Group, 2007)
* 59% of their users considered customer reviews to be more valuable than expert reviews. (Bizrate, October 2007)
* 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. (Major consumer electronics retailer/iPerceptions study, January 2008)
* 81% consider the availability of customer reviews to be “very important” (33%)”somewhat important” (48%). (Major consumer electronics retailer/iPerceptions study, January 2008)
* 86.9% of respondents said they would trust a friend’s recommendation over a review by a critic, while 83.8% said they would trust user reviews over a critic. (MarketingSherpa, October 2007)
* 84% of consumers earning more than $150,000 annually visit sites where customers review and rate products and services including restaurants. (The Luxury Institute, April 2007)
* 71% of UK online shoppers seek out ratings and reviews. (NetExtract, 2007)
* 70% of online consumers said they use the Internet to research everyday grocery products. (Prospectiv, January 2008)
* 67% of UK consumers research products via the Internet before shopping in a store. (Accenture, April 2007)
* 91% of millionaires say they always or often look at reviews before buying luxury goods; 68% of ultra-affluent shoppers use consumer reviews. (Unity Marketing/Google study, reported in AdAge, October 2008)
* Mobile user-generated content will generate $5.7 billion worldwide in 2012, up from $576 million in 2007. (“Mobile Social Networking: Opportunities & Forecasts 2008-2013,” Juniper Research, October 2008)
* Satisfaction for those who recalled customer reviews on the retailers’ site is 10% higher than those who said there were no reviews offered. Loyalty increases, too: 7% higher likelihood to purchase online, 8% greater likelihood to purchase from the retailer next time they’re buying similar merchandise and 11% greater likelihood to recommend the site to others. (30 UK Online Retail Satisfaction Index, ForeSee Results, January 2008)
* 83% of shoppers said online product evaluations and reviews influenced their purchasing decisions. (Opinion Research Corporation, an infoGROUP company, July 2008)
* In an online survey of 4,000 consumers, 70% said they had done internet research on “everyday grocery products,” and 63% said they had done so for health and beauty products. (Prospectiv, 2007)
* 57.2% of U.S. toy purchasers are influenced by product reviews online. (Ad-ology Media Influence on Consumer Choice, Fall 2008)
Marketer Demand for Ratings and Reviews
* 79% of online UK retailers surveyed reported that the main benefit of consumer-generated rating and reviews was that they improved site conversion rates. (eMarketer, 2007)
* 68% of online marketers believe “media is in big trouble and will lose dollars to user-generated content.” (iMedia Connection, February 2008)
* 58% of the E-Commerce Guide 100 retailers implemented ratings and reviews in 2008, up from 50% in 2007; 24 percent sell by top-rated products. (e-tailing group’s 11th Annual Mystery Shopping Survey, January 2009)
* 84% of marketers agree that building customer trust will become marketing’s primary objective (1to1 Media survey of the 1to1 Xchange panel, April 2008)
* 43% of retailers have reviews – double in one year. (Marketing Sherpa, February 2007)
* 76% of US retailers said user-generated content would have a greater impact on their marketing goals in the near future. (SLI Systems/Zoomerang, November 2008)
* Of merchants who adopt customer reviews, 58% said improving customer experience was the most important reason for adding reviews to their sites, followed by building customer loyalty (47%), driving sales (42%), and maintaining a competitive advantage (37%). (eTailing Group, June 2008)
* By 2020, 84% of marketers agree that building customer trust will become marketing’s primary objective, and 82% agree that collaboration with customers will prevail over marketing. (1to1 Media survey of the 1to1 Xchange panel, April 2008)
* 11% of retailers reported a 20% or more overall increase in conversions as a result of adding reviews to their sites, 21% reported an 11% to 20% increase and 5% reported a 1% to 10% increase. (eTailing Group, June 2008)
* 81% of marketers surveyed say that their social media spending will meet or exceed their traditional advertising spending within the next 5 years. (TWI Surveys/Society for New Communications Research, November 2007)
* 56% of UK website owners say that user-generated content lifts conversion levels; 77% say it increases traffic; and 42% say it increases the average spend on site.(eConsultancy survey of 360 website owners across all sectors, November 2008)
* Dave Seifert of Bass Pro Shops noted at a Shop.org round table discussion that Top Rated Products were “the #1 merchandising technique ever utilized on their site.” (Bass Pro Shops, June 2008)
* After their order, PETCO asked customers, “What online tool most influenced your purchase decision?” The #1 answer was product ratings and reviews, with site search coming in a distant second. (PETCO, June 2007)
* The Shop.org State of Retailing Online study, conducted by Forrester Research, found only 26% of the 137 top retailers surveyed offered customer ratings and reviews, but 96% of them ranked customer ratings and reviews as an effective or very effective tactic at driving conversion. (Forrester, 2007)
Consumer Demand for Ask & Answer™
* 76% of online shoppers surveyed report that content is insufficient to complete research or purchase online “always, most often or some of the time.” (eTailing Group, June 2007)
* Online businesses lose as many as 67% of consumers due to a lack of online product information. (Allurent, January 2008)
* 83% of online shoppers would make purchases if sites offered increased interactive elements. (Allurent, January 2008)
* One in four (24.5%) shoppers said they left a store because of a lack of assistance. (Shop.org, November 2007)
* 90% of UK shoppers surveyed said they wish they could communicate directly with businesses – using live chat, forums or call-me-back facilities – via their websites; one in three require it from the UK businesses they currently use. (1&1, October 2007)
* 42% of consumers said they prefer being able to find the answers they need online on their own if they had a question or wanted help while shopping online. (Harris Interactive, May 2007)
* The share of traffic to question-and-answer Web sites has more than doubled from 2007 to 2008 (HitWise, 2008)
* Yahoo Answers had 25.3 million visits in February 2008 (comScore Media Metrix, March 2008)
* 68% of consumers trust “people like me” first for product advice. (Edelman Trust Barometer, January 2007)
* 42% of 1,179 online consumers surveyed have left a site without purchasing multiple products because they couldn’t get a question answered about one of the products in their shopping cart; 41% decided not to make a planned purchase because they couldn’t readily find a piece of information about the product or service. (JupiterResearch, September 2007)
Conversion Results
* MarketingExperiments tested product conversion with and without product ratings by customers. Conversion nearly doubled, going from .44% to 1.04% after the same product displayed its five-star rating. (MarketingExperiments Journal, July 2007)
* 79% of online UK retailers surveyed reported that the main benefit of consumer-generated rating and reviews was that they improved site conversion rates. (eMarketer, 2007)
* Online shoppers who look at TripAdvisor reviews on the Hayes & Jarvis site book trips at double the rate of online shoppers who have not seen the TripAdvisor reviews, based on first four months after launch. (TripAdvisor, January 2008)
* Shoppers who browsed the site’s new “Top Rated Products” page, which features products rated most highly by customers, had a 59% higher conversion rate than the site average and spent 16% more per order than other browsers of products. (Bass Pro Shops, June 2008)
* Shoppers who browsed the site’s “Top Rated Products” page, which features products rated most highly by customers, had a 49% higher conversion rate than the site average and 63% more per order than other site shoppers. (PETCO, June 2007)
* Giving shoppers the ability to sort products within a category by customer rating led to a sales increase of 41% per unique visitor. (PETCO, June 2007)
Average Order Value Results
* Consumers were willing to pay between 20 to 99% more for a 5-star rated product than for a 4-star rated product, depending on the product category. (comScore/Kelsey, October 2007)
* Top-rated products site navigation path featuring 4- and 5-star products in each category delivered 35% higher conversion and 40% higher average order value. (Bazaarvoice, June 2007)
* Reviews usage drives higher spending: 27% of users report an increase of 5-10%; almost 7% report an increase of 20%+. (Avenue A/Razorfish “Digital Consumer Behavior Study,” October 2007)
User-generated Content Beyond the Web
* 64% of Social Researchers (those who refer to user-generated content when shopping) research products online more than half the time, no matter where they ultimately buy the product (store, Web, catalog, etc.). (eTailing Group, June 2007)
* Online consumers are becoming precision shoppers. For every $1 in online sales, the Internet influenced $3.45 of store sales. (eMarketer, 2007)
* 90% of those surveyed say they have a better overall shopping experience when they research products online before shopping in-store. (Harris Interactive, October 2007)
* 92.5% of adults said they regularly or occasionally research products online before buying them in a store. (BIGresearch, November 2008)
* Nearly one out of every four Internet users (24%) reported using online reviews prior to paying for a service delivered offline. (comScore/The Kelsey Group, October 2007)
* More than three-quarters of review users in nearly every category reported that the review had a significant influence on their purchase, with hotels ranking the highest (87%). (comScore/The Kelsey Group, October 2007)
* 97% of those surveyed who said they made a purchase based on an online review said they found the review to have been accurate. (comScore/The Kelsey Group, October 2007)
* Consumers who shop online for digital cameras and TVs spend 10% more on in-store purchases than consumers who do not search online. (ChannelForce for Yahoo Search Marketing, July 2007)
Email Campaign Results
* Email study: PETCO realized a 5X increase in email click-through rates by including relevant ratings and reviews content in the campaign promotion. (PETCO, June 2007)
* Top rated product email drive 46% higher revenue per email in A/B test. (Golfsmith, June 2007)
Search Engine Optimization Results
* In a study of a major electronics retailer site of 30,000 monthly natural language search visitors, converted 60% more often, spent 50% more, and viewed 82% more pages than search visitors to other pages. (Bazaarvoice case study with major electronics retailer)
* In a study of online UK retailers, 59% reported that the consumer-generated activity leads to better search engine optimization. (eMarketer, 2007)
Return Rates and Customer Satisfaction
* During the 2007 holiday season, consumers who recalled seeing customer reviews on a Web site reported 9% higher customer satisfaction levels, were 9% more likely to make a purchase and 8% more likely to purchase the next time they came to that site. (ForeSee Results, January 2008)
* Reviews drive 21% higher purchase satisfaction and 18% higher loyalty. (Foresee Results Study, January 2007)
* Online UK retailers reported improved customer retention and loyalty by 73% once they implemented consumer-generated rating and reviews. (eMarketer, 2007)
* Products with reviews have a 17% lower return rate than those without reviews. (Bazaarvoice PETCO Case Study, 2007)
* Products with 50+ reviews have a return rate that is half of those with fewer than five reviews. (Bazaarvoice PETCO Case Study, 2007)
* One study from IBM Institute for Business Management shows that while those adults in the UK who use social networking do so to attain a feeling of community, 17% of the adults surveyed say they do so because they like to participate with brands they favor. (IBM, August 2007)
Evolution of Advertising and Media
* 75% of people don’t believe that companies tell the truth in advertisements. (Yankelovich)
Search
* SearchVoice study: of 30,000 monthly SearchVoice visitors, they convert 60% higher, spend 50% more and viewed 82% more pages. (Major electronics retailer case study, August 2008)
* The ability to refine site search results by customer rating led to 22% more sales per unique visitor on a same-session basis and 41% more sales per visitor on a multi-session basis. (Bazaarvoice)
Syndication
* RSS study: Burpee measured a 43% higher click-through on RSS feeds with reviews than without. (Burpee, December 2007)
I agree that ROI is used as a cop-out. Social media is viral. It can start with a single person, and balloon and balloon into thousands, hundreds of thousands, even millions. Sometimes it takes time. But each step is exponentially growing your exposure. Eventually, it will far exceed any “ROI” estimates you have been given. It is an inevitability, the only unknown is the time it takes to get there. Bottom line is, there are no guarantees in life, and in business more so.
Great White Parts-boating parts, electronics and more.
Excellent Read. I’ve recently embarked on a social media immersion process – and have been wrestling with methodolgies around ROI – beyond sales. Thanks.
wow – very interesting post. I love the comment about Return on Ideas! So very true.. A good majority of CEOs & Board of Directors are just looking at the hard numbers, and finding it difficult to measure the value of social media. I am sure the economy is not helping matters, but they are missing out on the “User Group 2.0″ – these are the future/current consumers. Your list of ROIs are fantastic.
Okay, so why am I going to invest in social media when I could take other actions that have more measurable results?
I see the value in trying new things such as social media, but there has to be some kind of quantitative standard to determine whether something worked or not/achieved its objectives.
How can you manage what you cannot measure?
Rhonda, thank you for your post. If you create real business objectives, set benchmarks you can in fact track it. My challenge to you is to click on the “Social Analytics” link in the blog. I can set you up with a demo and think about utilizing that tool only after building a strategy with real ROI benchmarks and then tell me it is not measurable. I am willing to bet you wont be able to.
I have clients doing it successfully right now. However, the education process on the who, what, how and why prior to measuring is the sticking point.
Pauline nailed it: “What is one customer, new idea, quality improvement worth to you in the court of public opinion?” These are the questions that need to be asked, not what is the ROI.
Thank you again for your input and let me know if you would like to chat further.
See the question needs to be turned around and asked back at the prospective company. Well, Mr CEO/VC… I am glad you asked that because it was on my list of questions to ask you.. “What do you want your ROI to be?” What are the business goals you want to achieve with engaging with your customers/partners/clients/employees by leveraging social networking and community applications and strategies? Only when we understand the metrics that are looking to be changed can we dive into them can we talk about what your ROI. It is there but different for every company. Let’s find it together!!!!
Derek – well done. As you know, I’m a big fan of ROI, especially when it comes to anything “social.” Thank you for breaking out the list of ways that companies can benefit, it should be a helpful resource going forward.
Best,
Aaron | @aaronstrout
[...] ROI In Social Media & Social Networking – Lets Call A Spade A Spade!’ [...]
[...] There is usually one vital element missing: Business. What’s the point or the end game? Well, I found a unique blog which makes sense of all this stuff and actually brings a side of sense and reality to social media. [...]
[...] There is usually one vital element missing: Business. What’s the point or the end game? Well, I found a unique blog which makes sense of all this stuff and actually brings a side of sense and reality to social media. [...]
1. Venture Capitalists
2. Board Of Directors (many times the same as venture capitalists)
3. C-Level Executives
I’m not sure why you feel it is a shame that you have to convince these people. They are the ones with the money. They are the ones whose job is on-the line if the company isn’t making money.
I have no problem with taking calculated risks. [Disclaimer: my role at this company is employee/sales]. Our website isn’t the prettiest, but it generates sales through good rankings on SEs. I thought, surely PPC ads would increase sales since the site already proved it could make $. After spending about $3000 and no extra sales we realized something was amiss. That was measurable. My time would have been better spent working on better rankings.
That is the question I ask with Social Marketing. 1) Will it make $?. Money, not theories pay the bills. If there isn’t money in the checking account, I don’t get paid. 2) Will it make more money $ than time spent on other activities. I had a record sales month so far and the month isn’t even over. None of the sales contributing to my record had anything do to with efforts past or present from the internet. They all came from clients generated from my past, traditional marketing efforts. That is what goes through my mind when I wonder about jumping into the Social Marketing scene.
Chris, then the answer is for you to look as SM as a supplement to what is working. Think big, but start small. As you have success with social media scale upwards and cut in other places when it makes sense. Not knowing a bit about your business, I cant make recommendations. Although I can say that “link juice” is a common goal with social media, and you alluded to “better rankings”.
Okay, I will be on vacation for about two weeks. I’ll start small in July, and report back.
I will do my best to track some good metrics, but ultimately, hopefully report some true dollar figures. I realize social media as with any internet efforts are not a quick return so I will look at a period through 90-days and then 6-months and see where we are.
Sound fair? cd :O)
I have been looking for these figures for a while. Glad I came across this information. Suprising results too.
I sell only one product, an effective learn-it-yourself deep meditation course. So there is no way to show ratings, 5-star or otherwise. I’ve thought about SM, but cannot imagine how to use it in practice. I have lots of testimonials, but they’re useless if I can’t drive folks to my site. I’m nonprofit/volunteer and cannot afford standard big-bucks marketing. Any ideas?
David, I would start a wordpress blog on your site in addition to testimonials. Start writing about what you know – your value proposition. Then create a profile within Onlywire.com and ping.fm and share each piece of content out and tag each post with the keywords you would want to rank for in Google. Hope it helps. The cost is nothing more then your time. Also, be sure to join other conversations around your industry and share really valuable ones in ping.fm and onlywire. Let me know if you have questions.
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Hi there could I quote some of the content here in this entry if I link back to you?
Of course. Ping me, I will get you some link love back.
Hi buddy would it be ok if i took some info from here to use on one of our websites? cheers mate
Sure, jsut be sure to link me back with the credit.