How  To  Make    A  Business  Case    for  Social  Media    

 

 Dr.  Natalie  L.  Petouhoff  @drnatalie  

www.DrNatalieNews.com  

We  are  going  to  explore  the  4  KEY  Steps  to  Making  a  Business  Case  

Step  1:  Define  Business  Benefits  &  Social  Strategy      – Start  with  one  simple  sentence  – Determine  ways  that  social  analysis  would  help  – Do  the  math  with  help  from  department  heads  

Step  2:  Examine  Project  Benefits,  Costs  and  ROI  Step  3:  Determine  AddiIonal  Benefits  Step  4:  Define  Risks  and  UncertainIes  

Using  A  Business  Case  Template:  

>3.5  Billion  pieces  of  content    Shared  /  Week    By  2020  à  450  Billion  business  transacIons  /  day  

How  can  we  make  sense  of  all  this?  

People are Acting on Content

 Aren’t  the  Benefits  obvious?  

CLEARLY,    PEOPLE  ARE  SHARING  MORE  THAN  EVER      SOCIAL  IS  HERE  TO  STAY.      SO  WHY  DO  WE  NEED  A  BUSINESS  CASE  FOR  THE  INVESTMENT  IN  SOCIAL  MEDIA  ANALYSIS?    

•  The first 2 phases driven by Innovators & Early Adopters

•  They don’t need business cases to adopt something

WHAT’S SHIFTING THE NEED FOR A

SOCIAL MEDIA BUSINESS CASE?

We’re in the “third wave” of social media.

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The  Third  Wave  is  Dominated  by  The  Early  Majority  Who  Are  PragmaMsts  –    

•  They  want  proof  •  Love  business  cases  

– Now  deep  insights  are  needed  –  Based  on  proprietary  market  research  technology  to:  

•  Know  More  •  Know  Why  •  Know  How  

Social  Media  Analysis  has  Evolved    

To  make  sound  business  decisions…  

Businesses  need  deep  insights  to  drive  business  acIons  – Who’s  talking  about  the  brand?  – What’s  being  said  about  the  products  &  services?  –  How  are  those  online  and  offline  conversaIons  between  customers  affecIng  the  business?  

– What  can  the  business  learn  from  these  conversaIons?  – What  can  the  business  learn  from  monitoring  their  compeIIon?  

The Business Case Creation Process: ���How to Justify an Initiative

Define   Gather   IdenMfy   Analyze   Choose   Implement  &  Measure  

Define  Project  

IdenIfy  &  Align  

Stakeholders  

Set  Goals,  Metrics  

Gather  Financial  Data  

Document  current  state  

Define  Problems  to  

Solve  

IdenIfy  benefits  

IdenIfy  costs  

IdenIfy  risks  

Create  business  case  

Analyze  Create  ROI  

Create  selecIon  criteria  

Produce  RFP  

Evaluate  vendors  

Select  soluIon  

Measure  baseline  before  

Measure  acer  for  ROI  

Refine  &  opImize  

Gain  consensus  

The components ���of a quality ���

business case ���– a template

 Table  of  Contents  1.  ExecuIve  Summary  

•  Background    

2.  Current  Business    •  Business  Problem  To  be  Solved    

3.  Proposed  Project  •  DescripIon/SoluIon  to  the  

Business  Problem    

4.  OpIons  EvaluaIon  Approach  •  Proposed  opIons    

5.  Investment  Analysis  •  Costs,  Benefits,  ROI  •  QuanIfy  /  Sell  the  Benefits    

6.  Risk  Analysis  &  MiIgaIon  •   Change  Management  /  Governance  

                   

   Poorly  communicaIng    

the  anIcipated  payback  /  benefits    of  a  project    

to  your  stakeholders—CxO’s,  Finance,  IT,  etc…          

Is  a  sure  bet  to  stop    your  projects  from  being  funded…  

 Even  projects  you  know    

would  strongly  benefit  the  company.  

BEGIN  BY  DISTILLING  THE  BUSINESS  CASE  INTO  A  SINGLE  SENTENCE:      

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“We  will  ___(DO  SOMETHING  =  Project)_____    to  improve  __(A  Business  SituaFon)________,      and  our  success  will  be  measured  by    _____(Benefits  as  Measure  by  Metrics)____,      which  is  worth  ___(A  Dollar  Value)________.”    

Example:    “We  will  use  social  media  monitoring  analysis      to  gain  strategic  insights,      And  our  success  will  be  measured  by  averFng  a  PR  crisis,      Which  is  worth,    on  average,  $2M  for  each  PR  crisis  averted.”    

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IN  ALL  SINGLE  SENTENCE  EXAMPLES…      

This is the foundation of your business case and keeps the effort focused! AND -- You may find that you can garner benefits in other departments You can add additional sentences to your business case

YOU PUT A STAKE IN THE GROUND: i.e. – you say how you intend to use the social media analysis to produce specific business results…

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Example:      “We  will  use  social  media  monitoring  analysis      to  gain  real-­‐Fme  market  research  &  insights,      and  our  success  will  be  measured  by      increased  consumpFon  (sales)  &  marketshare,      which  is  worth    5%  increase  in  sales  equaling  $2M.”    

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BENEFITS  FIT  INTO  “5”  BUCKETS:  To  get  more  benefit,  make  friends  in  other  departments!  

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   Revenue    Tech  investment  leads  to      incremental  revenue  

   Sales,  Mktng    Measured  in  incremental  gross  margin  

   User  ProducMvity    Tech  investment  leads  to  streamlined  efficiencies  

 Department  Head,  and      End  User;  Customer  Service,  Product  Development…  

 Increased  worker  output,  cost  saving  

   Asset  ProtecMon    Tech  investment  protects  against  potenMal  for  loss  or  exposure  

 PR,  Risk  Mgt,  Security,  IT    Measured  as  potenMal  direct  /  indirect  cost  avoidance  

   Compliance    Tech  investment  complies  with  gov't  regulaMons  

 Legal  Affairs,      Regulatory    Measured  as  direct  cost  avoidance  

   Capital  Efficiency    Tech  investment  allows  for  reuse  &  increased  output  for  exisMng  capital  

 Finance,  IT,  Dept.  Heads    Measured  as  increased  output  per  capital  investment,  direct  cost  avoidance  

 Benefit  Bucket                  Value    Depts.   Measurement  

HERE’S  THE  HARD  PART…  DO  THE    MATH  -­‐-­‐-­‐-­‐        

QuanMfy  each  benefit  idenMfied!  

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What’s  necessary?    •  Understanding  actual  departmental  funcIons,  costs  and  

their  benefit(s)    •  Make  friends  with  Finance  and  Quality  •  Can’t  get  to  the  math  for  ROI  without  it  •  Get  input  from  departmental  head(s)  to  discuss  

operaIonal  costs  and  social  analysis  opportuniIes  •  Vet  with  other  departments  –  part  of  the  change  

management  process  –  so  down  the  line  you  don’t  get  resistance  

HOW  TO  QUANTIFY  A  BENEFIT  

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Example  quesMons  to  ask  yourself  /  Dept.  Heads    when  quanMfying  a  benefit:  

Q:  What’s  the  benefit  of  having  social  media  analysis  in  PR?  A:  Geong  deep  insights  on  brewing  issues  could  help  to  prevent  the  need  to  have  PR  damage  control    Q:    What  were  the  costs  associated  with  PR  damage  control?  A:    Decreased  shareholder  value,  cost  of  effort  to  restore  brand  equity,  resource/PR  agency  overIme  costs,  irreparable  damage  to  brand  

     Q:    What  benefit  bucket  does  averted  PR  damage  control  belong  to?  A:    Cost  avoidance  fits  into  Asset  ProtecIon  benefit  bucket    

Therefore,  Social  Media  monitoring  analysis,  from  a  PR  perspecIve,    is  protecIng  assets:    i.e.  earnings  &  shareholder  value  …  

PR  Crisis  Recovery  ROI  CALCULATION  

•  What  is  the  cost  of  a  PR  Crisis  Recovery?  •  Impact  to  annual  revenue  /shareholder  value?  •  Revenue  lost  /  week    during  PR  Crisis?  •  Length  of  PR  Crisis  without  social  media  

monitoring?  •  Length  of  PR  Crisis  with  social  media  

monitoring?  •  Cost  to  restore  corporate  brand  reputaIon  /  

equity?  

=   –     x  100  

•  People:  Staff  Salary  (exisIng)  •  Process:  Training  to  use  the  system    

(3  days)  •  Technology:  Social  Analysis    Plarorm  

ROI  

On  average  research  shows:  Benefit:  $2M  to  restore  the  brand’s  reputaIon  Investment:  (1  year)  =  $5,000/mo  x  12  =  $60K  

ROI  =  $2M  –  $60K    x  100  =  566%  ROI                    $60K  

4  KEY  Steps  to  Making  a  Business  Case  

Step  1:  Define  Business  Benefits  &  Social  Strategy      – Start  with  one  simple  sentence  – Determine  ways  that  social  analysis  would  help  – Do  the  math  with  help  from  department  heads  

Step  2:  Examine  Project  Benefits,  Costs  and  ROI  Step  3:  Determine  AddiIonal  Benefits  Step  4:  Define  Risks  and  UncertainIes  

 

Using  the  Business  Case  Template:  

Examples:  Use  Cases  For    

Social  Media  Monitoring  Analysis  

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Consumer Brands: Measuring Intent

Use Case: How does consumer behavior respond to corporate actions or other events?

Business Application: Change activities based on

impact; investigate correlations with other data sources.

Advertisers: Campaign Effectiveness

Use Case: To what extent did a specific campaign meet its objectives?

Business Application: Design future campaigns

accordingly; gain visibility into elements of ROI.

B2B: Consumer Views on Industry Trends

Use Case: What risks or opportunities exist in industry-level conversations?

Business Application: Determine whether / how to

participate in high profile issues.

TV Media: Fine Tune Promotional Content

Use Case: What programming elements drive passion from fans online?

Business Application: Design or tweak promotional

content in order to highlight most engaging topics to audiences.

Brand Audit - PR Use Case

SAMPLE CLIENT: A $200B global innovator that puts “imagination to work” to make a better world (Crimson Hexagon serves 16 divisions)

QUESTION: What is happening to our brand? Develop a framework for social media crisis analyses & communications by analyzing three crisis affecting the brand over a 9-month period:

1

OFFSHORING JOBS TO CHINA

TAX BREAKS IN A BAD ECONOMY

2

NUCLEAR ENERGY SAFETY CONCERNS

3

INSIGHTS and ANSWERS ANALYTIC FINDINGS:

A.  Meaningful negative sentiment over horizon B.  Greater negativity toward tax issues vs. outsourcing

vs. nuclear energy concerns C.  Bigger crisis was one of politics, not a single event,

impacting brand perception relative to competition

“I don’t think there is any question that the audit had a real impact on how people understand the brand… It’s fair to suggest that Crimson Hexagon has had a hand to play in our re-positioning."

CLIENT FEEDBACK:

A

C

B UNEXPECTED UNEXPECTED, UNINTENDED

How  to  make  a    business  case  for    

Social  Media  Monitoring  Analysis  Dr.  Natalie  L.  Petouhoff  

@drnatalie  www.DrNatalieNews.com  

THANK  YOU