Social networking and community engagement technology made easy

We’ve written a couple of posts on social media ROI and there was a great post in Social Media Today by Brian Solis on how to measure ROI.  Social media began as a way to build relationships. As more and more individuals were cultivating this new medium, some started utilising it for business transactions. However, we now live in a time of social media marketing, and although knowing how and what to measure is important, we must also keep in mind the importance of relationship building, which Solis hits on:

Over the years, Social Media experts attempted to redefine ROI for a new era of influence. While some introduced alternative philosophies for measuring the nuances tied to social media, others wondered aloud whether ROI simply wasn’t necessary as the tools and methodologies for analyzing yields didn’t yet exist. And furthermore, by focusing on justification and metrics, we were distracted from the primary objective of building relationships and cultivating dialogue.

When it comes to social media and cultivating it for business purposes, despite what has been done in the past, blindly jumping in, one of the most important factors is strategy. At the end of the day, of course there must be progress toward raising the bottom line, but there must also be a goal along with a plan in order to truly grasp the value that comes from social media.

The reality of ignorance that comes from Brian’s article is eye-opening as he explains that elusiveness continues to prevail:

MarketingProfs recently published a study performed by Bazaarvoice and the CMO Club that revealed the true expectation of chief marketing officers. Bottom line, they want measurable results from social media.

- 53% are unsure about their return on Twitter

-50% are unable to assess the value of LinkedIn or industry blogs

More specifically however, roughly 15% believe there is no ROI associated with Twitter and just over 10% cannot glean ROI from LinkedIn or Facebook.

I believe this is the direct result of not tying activity to an end game, the ability to know what it is we want to measure before we engage. Doing so, allows us to define a strategy and a tactical plan to support activity that helps us reach our goals and objectives.

So the first question is:

What is it you want to change, improve, accomplish, incite, etc?

By establishing and defining these questions as the STARTING POINT, you can specifically tie the activity toward the follow:

- Sales

- Registrations

- Referrals

- Links (the currency of the social web)

- Votes

- Reduction in costs and processes

- Decrease in customer issues

- Lead generation

- Conversion

- Reduced sale cycles

- Inbound activity

When an organisation is beginning any new type of marketing campaign, it’s essential to plan this just as you would a business. The answers to the questions above are what can assist in result measurement. These are the technicalities and most definitely need to be looked at and defined. But let’s circle back to a huge main point. Social media is about creating RELATIONSHIPS.

In the relationship building process, for any to work, you must “show up.” If you aren’t showing up in the space that your customers are in, then you can’t expect much to change for your cause or organisation. I believe social media networking is an extension of word of mouth marketing.  It is the platform in which it breeds. There are things that need to be established first in order for this to work to your benefit. That is why so many social media marketers often speak about trust. If you’re not there, how can you earn trust?

As we continue through 2010, social media marketers will begin to integrate relationship building/trust and measurement.

As Solis points out, “2010 is the year that social media graduates from experimentation to strategic implementation with direct ties to specific measurable performance indicators.”

In 2010, CMOs will seek to establish a connection between social media and P&L business goals. The study documents the adoption of three metrics:

- 333% surge in tracking revenue

- 174% escalation in monitoring conversion

- 150% increase in measuring average order value

So, what now? Solis gives a call to action:

“Among the most effective forms of any marketing initiative is the integration of a call to action. It is how I define influence as it gives us the ability to inspire activity and measure it – as designed. As stated earlier, revenue is only one form of metrics we can introduce, but defining the “R” in ROI is where we need to focus as it relates to our business goals and performance indicators specifically. Even though much of social media is free, we do know the cost of engagement as it relates to employees, time, equipment, and opportunity cost (what they’re not focusing on or accomplishing while engaging in social media). Tying those costs to the results will reveal a formula for assessing the “I” as investment.

When we truly grasp the ability to define action and measure it, we can expand the impact of new media beyond the P&L. We can adapt business processes, inspire ingenuity, and more effectively compete for the future.”

Solis effectively gives us something to think about when we’re looking at ROI with social media. What is the bottom line incentive for social media marketing for your company or organisation? Until you can answer those questions, ROI in the social media world really won’t matter.

posted by Piers Hogarth-Scott in the category ROI Social Media Social networking
Tags: brian solis, ROI, social media today