SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Social Media ROI

Presented by:Terrance Barkan CAE

How to define and measure social media business results!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Opening Thoughts!

Do you need to use social media just to stay “at Par”, or do you plan to use social media to gain an advantage?

Either way, it is important to measure your results!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Social Media ROI is the most sought after, least understood business metric today!

58% of CEO’s name “ROI” as their single most important social media related goal.

Most organizations are unable to measure their social media results.

Too many managers equate revenue or the number of followers and “likes” with ROI.

It is only half of the ROI equation!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

What do you want social media to do for your organization?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How is social media being used today?

To improve the customer or member experience

To grow and build a stronger brand

To maintain organizational competitiveness

To obtain new customers or members

To increase sales of products and services

To empower staff teams through better communication and transparency

To drive real, measurable “ROI” (Return on Investment)

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

ROI

RiskCommunity

PoliciesWhat does a “Social Media Strategy” include?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

The key elements to social media strategy are:

• Social Media Goals

• Measures and Objectives

• Defined audiences (target groups)

• Key messages and themes

• IP and Content development strategy**

• Identification of “Community Champions”

• Inventory of technology tools and applications used

• Implementation and measurement guidelines**

**This includes social media policies and guidelines!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

The key elements to social media strategy are:

• Social Media Goals

• Measures and Objectives

• Defined audiences (target groups)

• Key messages and themes

• IP and Content development strategy**

• Identification of “Community Champions”

• Inventory of technology tools and applications used

• Implementation and measurement guidelines**

**This includes social media policies and guidelines!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

So how do you calculate “ROI”?

ROI =

(Revenue + Savings) – (Related Costs)

(Related Costs)

NOTE: ROI is expressed as a % of return over and above total directly related costs.

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

“ROI” example. . .

Revenue: 100 New Members @ $150 = $15,000

100 Registrations @ $750 = $75,000

Total = $90,000CostSavings: Reduced Print Advertising = $12,000

Direct Costs: 50% of 1 full-time staff = $45,000

Applications and tools = $ 5,000

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How do you calculate “ROI”?

ROI =

(Related Costs)

Result: $102k-$50k = $52K net benefit.

$52k / $50 = 104% ROI

($90k + $12k) – ($50k)

($50k)

(Revenue + Savings) – (Related Costs)

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How should you set Social Media ROI targets and measurements?

Option 1. Calculate your current revenue per employee and then multiply times the number of social media FTE's to estimate needed revenues.

Example: Annual Budget = 12 million

Staff of 75 = $160k per FTE (per person)

Goal = at least $160k in new revenue and/or cost savings per new FTE assigned to social media

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How should you set Social Media ROI targets and measurements?

Option 2. Define a percentage ROI goal for the business (direct costs plus margin – 20%, 30%, 50%, 100%?) and calculate total costs allocated to social media.

Example: Margin Goal = 50%

Staff costs = $100k (incl. taxes, pension, etc.)Applications/IT = $50k

Goal = Total costs of $150k X 50% margin goal = $75k, plus total costs or $225k in new revenues.

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to calculate revenues and savings:

Include / allocate all related revenues including higher retention rate, incremental sales for events, books, new members, and online products like webinars.

Include any areas of cost savings = fewer mailings, reduced traditional marketing campaigns, print advertising or staffing allocated to social media (shift of costs from traditional areas to new media)

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Calculating revenues / gains

Retention rate calculation

Example: Total members = 30,000

Retention rate = 85% (15% of current year members do not renew)New members needed to break-even = 4,500

If social media can influence your retention and recruitment rates by just 1% each, this equates to 300 more members retained and 45 more new members.

At $100 per member = 345 X $100 = $34,500 gain

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Calculating revenues / gains

Event registration calculation

Example: Annual event of 3,000 registrants (90% members)

Registration fees: Members = $750Non-Members = $1,000

If social media can influence your registration rates by 5% (word of mouth included), this equates to 135 additional member and 15 non-member registrations.

= (135 X $750) + (15 X $1,000) = $116,250 new revenue

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to calculate the value of a “Like”

By tracking conversion rates, you can calculate the value of a "Like” or member.

Most important, you need to track the origin of your business transaction!

Many organizations are accumulating large numbers of followers, but…

What is the quality of the membership in the group?

What is the quality of the conversation? How many non-members are converting to

paid membership or products?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Conversion calculation

Example: 2,418 members in an open group, of which 100 join as a member: 100 X $150.00 = $15,000

Assuming your conversion rate stays constant, each new member to the group is worth $ 6.20 ea.

($15,000 / 2,418 members = $6.20)

NOTE: This is NOT ROI, it is only revenue!

Q. How much are you investing to acquire each member?

How to calculate the value of a “Like”

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Conversion calculation

If you are allocating 25% of a person at a cost of $20,000 to manage this group, you have a loss of $5,000.

i.e. You are losing $2.07 for each participant!

Therefore it is important to:

a. Track all related revenue

b. Control the costs allocated for the revenue realized!

How to calculate the value of a “Like”

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to track your social media campaigns?

Use URL shortening and tracking tools for each campaign AND channel.

Just like with your email campaigns, test and measure to see which messages and channels deliver the best results.

Track the results for each message/channel to message reach and impact.

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to track your social media campaigns?

Example: URL www.assc.org/meeting/registration/

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to track your social media campaigns?

Example: URL www.assc.org/meeting/registration/ Twitter: http://bit.ly/zVSlEi Facebook: http://bit.ly/xPcwH1 LinkedIn: http://bit.ly/TestQWE Email: http://bit.ly/TestMailZ

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to track your social media campaigns?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

URL Shortening and Tracking Tools

www.Bit.ly www.Budurl.com www.hootsuite.com*

*Note: Can be used send status updates to LinkedIn, Facebook and Twitter at the same time and will shorten your URL’s

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Additional Tracking Tools

Google Alerts – http://www.google.com/alerts

Tracks online mentions of keywords. Includes blogs and online articles.

Recommend to track: Organization name, acronyms,

products and trademarks Key personnel (volunteer and staff

leadership) Competitor names and products Industry key topics

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Additional Tracking Tools

TweetDeck– http://www.tweetdeck.com

Tracks use of Twitter including mentions and keywords.

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How do you currently measure the effectiveness of your current marketing and communications efforts?

Compare results from social media versus: Email marketing Print advertising Direct Mail Exhibitions and live events ?

What is your cost per customer for each of these alternatives?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Creating content, the hidden value in social media communities!

New sources of value

Are you able to mine the social media data and content to come up with new products and services? (Include this value in your calculation.) Can you use social media to improve (reduce) customer complaints?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

How to improve Social Media ROI ?

Who are your best customers today?

Use data!

Understand how your customers are using social media?

Understand who are your “super connected” customers?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

% of Non-Use

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

65% of your least networked members have only 26% of all community connections . . .

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Just 6% of your ultra networked members have 23% of all community connections !

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

“Private” Social Networking Tools

Engagement is the objective and

measurement gives you the tools

you need to drive results…

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Leverage existing data

You already have a lot of

member demographic

and business data in your

membership or customer

database…

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

…but it doesn’t “talk’ with external social media

platforms!

This is the key difference between “Public” and

“Private” social networking platforms

X

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

A “private” social network also gives you

more control over content and branding

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

No clear objectives

No clear measurements

No one person accountable

No budget or resource allocation

No sustainable business model (ROI)

No integration into AMS / CRM database

How do social media projects fail?

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Clear objectives

Clear measurements

One person accountable

Budget & resource allocation

Sustainable business model &ROI

Integration into AMS / CRM database

Make sure you succeed!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

The ability to define, measure and communicate the value of social media is critical!

See a sample “Memo to the CEO” at:

http://budurl.com/SROI

(pdf copy available as well!)

Memo to the CEO

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Social Media ROI

Q&A

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y Resource Material

Social Media Surveyshttp://budurl.com/SMsurvey Social Media Bloghttp://budurl.com/SMBlogs Social Media Resource Pagehttp://budurl.com/SMResource

Social Media & Strategy Bookshttp://budurl.com/BookReviews

Resources and Reference Material

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

We help you get from point “A” to point “B”!

SOCIALSTRATP r o f e s s i o n a l S o c i a l M e d i a S t r a t e g y

Questions?More info at www.socialstrat.org