ROI of Social Media

5 Strategic steps in assessing social media ROI

1) Set social media goals
2) Track conversions and their sources
3) Assign an average monetary value to each conversion type
4) Identify social media costs
5) Analyze and take action

#1 Set social media goals (Goals and Metrics)

Goals
-Increase brand awareness
-Increase sales
-Retain customers
-Enhance HR
Social media metrics
-Community memberships (#followers, fans, subs)
-Engagement with content - likes, tweets, repins, youtube likes, retweets
-Reputation and customer retention

Micro measurement Vs. Macro measurement

1) Micro measurement
-A business development team: volume of shares and retweets, online purchases
-A human resources team: reducing recruiting cost and increasing talent pool
2) Macro measurement
-retail store traffic, net revenue, net transacting custom

Financial vs. nonfinancial outcomes

Financial
-Two types: Cost reductions and increased revenue
- 12% increase in sales during facebook campaign
- 15% reduction in customer service cost after moving a portion of customer service to twitter
Nonfinancial
-Increased time spent on website
-20%

What is the sequence from initial investment to the gain?

1) $$$ investment - $25000 to invest in social media
2) Action - decide to launch a facebook page
3) Reaction - public positively responds to it
4) Nonfinancial impact - Page garners views and likes which leads to increased website visits
5) $$$ Financial

What is the formula for ROI

(Revenue-cost)/cost *100

What is the golden rule of calculating cost?

Every resource you assign to a project has a monetary value.
-personnel - salary
-technology - cost of servers
-time - spent on social media
-misc. cost - travelling costs

Examples of conversion goals

-Online purchase
-Filled out contact form
-Download PDF
-Email sign up
-View of video
-Time spent on webpage

What is the takeaway from the bar chart slide representing spikes in sales that occured after the launch of a marketing program?

Connecting the dots between your firm's activities, nonfinancial impact, and financial impact: you have to prove the cause-and-effect relationships and correlations.

What should the cost of acquiring a customer be?

The cost of acquiring a customer should be less than the value that the customer brings to the company over a particular time horizon.

What is the process of calculating ROI for social media?

1) Establish the baseline - what was the YoY growth up until the start of the program
2) Create activity timelines
3) Measure the volume if mentions
4) Measure nonfinancial outcomes
5) Examine transactional data
6) Overlay your data onto a single timeline

What are some of the most effective social media action measurements?

1) A/B testing - comparing a control sample against other samples in which only one element has changed
-Comparing two versions of emails, comparing three versions of a blog

What are some of the elements you can test for in A/B testing?

-Time of day
-Language
-Hashtag variations