ROI is as popular an acronym in social media as OMG or LOL are in TXTING. No matter how much you believe in social media, the reality is that management needs to know, what's the ROI of Tweets in "the" Twitter or Likes in "that" Facebook thing that all the kids are talking about? Kidding aside, the future of social media within your organization and the value your customers experience in their networks of relevance is in your hands.
No one said this was going to be easy, and if they did, they didn't report to the management infrastructure where you and I operate. Change isn't easy. But, these are the times we read about in books and see in the movies. A classic "Cinderella Story," if you will. You are the person who will rise against the odds to bring about meaningful change within your organization. Like Cinderella or any other character in an underdog story, you're destined to take the bumps and bruises before you realize the glory or validation you deserve.
The question remains however, what's the ROI of social media? It's a question that is in all reality, unavoidable, but achievable. The pursuit of the answer defines your destiny. Let's start with a bit of the truth. You cannot measure the ROI of anything when the R, or the return, isn't defined from the onset of any strategy. Nor can it be measured through the quantification of the 3F's (friends, fans, and followers) or any other simple math formula tracking Likes, ReTweets, comments, impressions, mentions or sentiment. This is the time to apply a bit more science than history to better understand how to design social media programs that measure a click to action.
Like Me? Why Don't You Love Me!?
In a classic twist of fate, brands rushed to social networks to seek acceptance in the form of "Likes" and follows. Once there, they found that connection was only the beginning. At the heart of these new communities was just that, a community. And, communities require an investment of not only time and resources, but value...value on both sides. This is about going beyond Likes, this is about loyalty, advocacy, and engagement.
HubSpot's "The 2011 State of Inbound Marketing" report spotlighted the critical importance of Facebook and Twitter in 2011 business strategies at 44% and 38% respectively. That's up from 24% and 21% in two short years.
With an increased focus on Facebook specifically, businesses will need a better understanding of what it is consumers want and how it is the company plans on delivering it within an interactive, peer-to-peer environment. eMarketer recently published a report, "Facebook Marketing: Strategies for Turning 'Likes' into Loyalty," to help shed light on the importance of meaningful engagement. The title of the report says it all. Businesses will need to invest less in superficial interactions and more in driving loyalty and steering beneficial customer experiences. Everything begins with defining the value and the experience customers are seeking. Yes, it goes beyond the ask, "Follow us on Twitter and Like us on Facebook." The reality is however, brands aren't outright expressing why consumers should do so. Instead the entire premise of many social media campaigns is void of expressed value or meaning and therefore absent of a solid foundation for measurement.
Measurement Starts with Benchmarking Against Progress Toward Business Objectives
In the early stages of social media marketing, brands experimented with measurement by tracking soft, but still necessary metrics such as awareness, engagement, sentiment, mentions, Likes, Followers, RT's/mentions, comments, etc. Sometimes, these metrics were benchmarked against competitors to demonstrate position and change over time. In an unpublished study that I reviewed, over 50% of businesses admitted not knowing how or what to measure in social media. Without connecting the dots between intention and cause and effect, we are measuring nothing more than activity. However, defining what it is we're trying to solve for and also identifying desirable outcomes is how we begin to design measurable programs. And, not only do social media engagement programs become measurable, they also by default, start to teach us how performance directly aligns with customer needs, interests and expectations.
In the third annual Benchmark Report: MarketingSherpa and Vocus focused a majority of the insightful 200+ pages on ROI. It begins with a telling sign of the growing importance of social and its ultimate collision with the C-suite. 65% of business' budgets will increase social spending between 2010 and 2011. Along with that discovery, senior executives are expecting quantifiable results that contribute to ROI or to measurable outcomes.
As mentioned earlier, we cannot measure what it is we do not know to value. Therefore value must be designed into the programs to accurately capture progress and effect.
Moving forward, MarketingSherpa and Vocus found that the priority areas for businesses responding to executive requests to "show them the money" have several issues to overcome.
1. Developing an effective and methodical social marketing strategy
2. Achieving or increasing measurable ROI from social marketing programs
3. Converting social media members, followers, etc. into paying customers
4. Achieving or increasing measurable lead generation from social marketing
The list goes on and on.
The path to measurement starts with a clear picture of the destination and what it takes to get from here to there. Businesses that learn to measure effect and outcomes will discover engagement strategies mature naturally simply because they're designed to deliver against customer expectations while driving meaningful and measurable experiences. Taking the easy road is tempting, but it's the path that many are following. Your job is to rise above the fray and connect the dots between social, outcomes, and demonstrable progress toward business objectives. Doing so bridges the gaps that exists between executive management, social media, scale, and customer expectations.
Moving forward, businesses that will leapfrog their peers are those that identify customer needs and business priorities and then reverse engineer them to design informed and measurable programs. Additionally, establishing metrics that benchmark against the opportunity sets the stage for establishing links that connect performance to ROI and ROI to executive support and sponsorship.
1. Understand the need and the opportunity amongst customers and prospects.
2. Design programs that meet their needs, offer tangible value, and also tie to business objectives.
3. Design outcomes and returns and integrate KPIs that capture progress, performance, and opportunities for optimization.
4. Create a disciplined process that is replicable across the organization and the various social presences that exist or are sure to arise.
Now, show us the way.
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