Buzz 2010 presentation

Social Business Justification & R.O.I.olivier alain blanchard@thebrandbuilder

Buzz 2010 SeriesWashington, DC18 August 2010

#buzz2010

TrainingSocial Media Program Integrationfor C-Suite executives,Managers and organizations.

Consulting- Brand Mgmt. - Online Reputation Mgmt.- Social Web & New Media

… and the blog.

What do I do?

Advisory Board Shenanigans

First Rule: The tools are the tools. The tools are not the thing.

Second Rule: Associations + NFPs are not like most businesses

First things first: …

Having “a presence” in Social MediaIs worthless unless you do something with it.

Your organization doesn’t plug into Social Media.Social Media plugs into your organization.

Second…

Ways in which Social Media can help a business:Sales

Net New Customers, Increased Frequency of Transactions, promo exposureIncreased yield (average $ value per transaction), and product penetration

Customer SupportImmediate feedback and response, positive impact in public forum, cost reduction

Human ResourcesMore effective recruiting, online monitoring of employee behavior (risk management)

Public RelationsOnline Reputation Management, improved brand image via Social Web

Customer LoyaltyIncreased interactions, better quality of interactions, deeper relationship with brand,

Increased trust in brand, increased mindshare of brand, greater values alignment

Business IntelligenceKnow Everything. (No, really.)

Ways in which Social Media can help an association:Outcomes

Net New Members, Increased Frequency of Donations and Volunteerism,Increased yield (average $ value per donation), added exposure

Member SupportImmediate feedback and response, positive impact in public forum, cost reduction,

Increased interactions, more varied interactions, portable resources (mobile)


Public RelationsOnline Reputation Management, improved brand image via Social Web,

Clarification of purpose & value, Direct communication with public

Member LoyaltyIncreased interactions, better quality of interactions, deeper relationship with cause,

Increased trust in organization, increased mindshare of cause, greater values alignment

AwarenessDo enough people know about us? Do enough people think about us?

ContextDo people think of us in the right way?

ValueDo people understand our value? What we offer?

RelevanceDo people appreciate our value to them?

CatalystsDo people have a reason to think about us? To engage with us? To buy into us?

Brand Management: Momentum Drivers

Social media is there to drive, amplify and reinforce all of these things:

AwarenessContext

ValueRelevance

InteractionsTransactions

Leveraging Social Communications

Third: A note about vertical and lateral forces…

Vertical Engagement= Org + Individual

Program/campaign-based, on-message, limited.

Lateral Engagement = individual + individual

This is how WOM and content really scale.

Fourth: Okay, now…

How do you rescue a fading brand?

What if this had nothing to do with Old Spice?

Facebook has over 500 MILLION users

Twitter now has over 100 MILLION registered users.

55,000,000 tweets per day.

37% of users tweet from their phones.

All talking to each other all day long.

But it doesn’t stop here.

What if this were your message?

What if this were your message?

The principles are the same.

AwarenessDo enough people know about us? Do enough people think about us?

ContextDo people think of us in the right way?

ValueDo people understand our value? What we offer?

RelevanceDo people appreciate our value to them?

CatalystsDo people have a reason to think about us? To engage with us? To buy into us?

Brand Management: Momentum Drivers

Catalyst: What you do.

Reaction: What they do.

“We have to share this with friends.”

How can I leverage Social Media to impact x:Outcomes

Net New Members, Increased Frequency of Donations and Volunteerism,Increased yield (average $ value per donation), added exposure

Member SupportImmediate feedback and response, positive impact in public forum, cost reduction,

Increased interactions, more varied interactions, portable resources (mobile)


Public RelationsOnline Reputation Management, improved brand image via Social Web,

Clarification of purpose & value, Direct communication with public

Member LoyaltyIncreased interactions, better quality of interactions, deeper relationship with cause,

Increased trust in organization, increased mindshare of cause, greater values alignment

But all of that is mostly talk.

And talk doesn’t pay the bills

or change much of anything.

Organizations need to raise money

and/or get results.

Talk needs to impact behavior.

NOTHING AN ORGANIZATION DOES IS FREE.

1. Programs and campaigns take manpower.

2. … and technology.

3. And most importantly, time.

… all of which are limited resources.

We have… rocks.

These resources=

100%of your budget

Head CountAdvertising

E-Marketing

Inbound Call Center

Sales Dept.Public Relations

MarketingI.T.

Accounting

These resourcesgenerate

100%of your outcomes

Which buckets do we emptyto fill this new one?

Understand that a new marketing program’s

funding doesn’t appearout of thin air.:

Give me a good reasonwhy I should assign resources

to this thing.

The dragon wants to know how this will help the org.

It all starts with one question:

What are you trying to accomplish?

Define the objective FIRST.THEN come up with the tactics.

Tactics don’t dictate the objective.

You know…What this team really needsIs more WOM!

NO

Objectives dictate tactics.

I need 3 more touchdownsbefore half-time. What are my options?

(How does WOM fit in?)

YES

Question #1:Will it save me money?

Maybe in member support?You mentioned something about

media costs and CPI?

Question #2:Will it generate more revenue?

I want more volunteers, more net new members,

more exposure,etc.

Fact: Ultimately, the P&L drives business decisions.

Objectives should be specific.

F.R.Y.FREQUENCY, REACH, YIELD

Increase how often customers buy from us each monthIncrease the net number of transacting customersIncrease average spend per transactionEtc.

The Association version:


Increase how often members give us each month/yearIncrease the net number of active membersIncrease average “give” per “transaction”Etc.

Business Justification

SAY HELLO TO:

R.O.I.

R.O.I.RETURN ON INVESTMENT

THE R.O.I. EQUATION

Investment Expectation of return

ROI =COST OF INVESTMENT

(GAIN FROM INVESTMENT - COST OF INVESTMENT)

THE R.O.I. EQUATION

The Truth About R.O.I.

ROI is a business metric, not a media metric.

ROI is 100% media-agnostic.

Only measuring digital or social won’t get you anywhere.

What if you aren’t “for profit?”

You still depend on some kind of revenue to function:Grants, funding, donations, membership fees, etc.

Same thing.

Revenue is revenue. Budgets are budgets. Money is money.

The Problem.

I’m a Social Media guru.Love isn’t about ROI, baby.Forget your greedy ways.

ROI is NOT:Return on InspirationReturn on InvolvementReturn on InnovationReturn on ImmersionReturn on ImaginationReturn on ImportanceReturn on InboundReturn on ImbecilityReturn on IgnoranceReturn on Incompetence

ROI is:Return on Investment.

R.O.I. Confusion - A tale of operational silos

Engagement R.O.I.Different Focus + Different perspective

Reason #1:COST REDUCTION

(How can I do morewith less?)

Reason #2:REVENUE GENERATION(How can I make more

of an impact?)

So once again, to be clear. This is R.O.I.

Dudes, we are ON THIS!!!

Let’s start engagin’!!!

I’ll start crafting somewicked blog posts and

online contests.

Let’s get peopleTalking about us.

This rocks!I never had it so

good!!!

Things happen in sequence.

Non-financial impact is not ROI (yet).

Too many agencies only measure here.

Types of non-financial impact

Website Visitors

Click-throughs

Visitors to a brick & mortar store

Positive press

Positive WOMNegative press

Negative WOM

Customer complaints

Employment applications

Retweets

FaceBook friendsBlog comments

Social mention

YouTube views

Twitter followers

Impressions

Delivered emails

Coupons distributed

Monitoring to base…Monitoring to base…

Our social mentions are wicked good!The YouTube videos are scaling well.

Our blog even has comments!We have liftoff!

Yeah but…What about

the P&L?

Six Months Later…

ACCOUNTING

Anything?

Nope.

Nada.

What kind of mood is The old man in today?

Not good.He doesn’t care how many visitors

the website gets, or how manyeyeballs we estimate we’ve reached.

How is it all helping grow theBiz yo?

Financial vs. Non-financial Impact

Non-Financial

Financial Are you converting this to this?

Or in your world…

Are you converting this to this?

Oh cool!Yeah. Sign us

up.

Way cool!

Weeeerd!

What a Social Media win looks like:

What a Social Media win looks like:

Facebook.com/oldspice

94,000 followersVelocity: 8K to 66K in only 2 days

16,000,000 viewsMost response videos >200,000 views

706,000 fans/likes… sharing videos with friends on their wall

But will it “sell soap?”

Sales of body wash up 107% in the last month.(It’s a good start, but will it be enough to justify the campaign’s expense?)

(It already has.)

Non-financial impact = potential.

ROI = actualized potential.

Social Media Activity - Vertical/Lateral

Ultimately, Social Media activity has to positively impact customer behaviors and drive revenue in order to deliver R.O.I.

This is not the end of the line for you:

In your case (and unlike For Profit businesses,)R.O.I. is not where the narrative ends. R.O.I. is a means to an end.

Main non-financial objective(s)Plant 3,000,000 new trees in the US

Reduce teen pregnancy in Chicago by 3% this yearPreserve historic neighborhoods in BaltimoreIncrease local recycling by 300 tons per year

Send 300 cleanup volunteers to the Gulf for one weekAttract Google Fiber to your city

This is not the end of the line for you:





Enablement

Step 1: Establish a baseline

8% YoY Growth

Step 2: Create Activity Timelines

Step 3: Monitor impact on conversationsWhat are people talking about and where?Map topics, keywords, trends, links, etc.

Step 4: Measure transactional precursors

Measuring transactional precursors

Measuring transactional precursors

Office?Museum?

Kiosk?

If you can, also look at # of transactions

If you can, also look at # of transactions

Sales?Donations?Other?

Also measure net new customers

NNC is a measure of effective reach,not just media reach.

Also measure net new customers

NNC is a measure of effective reach,not just media reach.

Net new members

Transaction data should be specific


How often customers transact. (transactions per month)How many customers you are reaching. (net new customers)How much they spend. ($ per transaction)

The Association version:


Increase how often members give us each month/yearIncrease the net number of active membersIncrease average “give” per “transaction”Etc.

Step 5: Finally, look at Sales Revenue

Step 5: Finally, look at Revenue

Memberships?Donations & Grants?Sales?

Step 6: Overlay your data onto a timeline

activities

transactions

social data

web data

loyalty metrics

etc.

Step 7: Look for patterns

Before After

Impact

ImpactImpact

No Impact

Uncertain Impact

Step 8: Prove & disprove relationships

Before After

How was this groupTouched by SM or WOM?

(And how was it not?)

Finally, someone with somereal metrics for me to sink my teeth into!

Good job, Sparky! You done gewd!

Make the case for Social Media’s value.

R.O.I. Case Study Brief: Association Launch

Problem: A new triathlon club with virtually no funding or resources wanted to grow large enough to start sponsoring and organizing events to promote the sport in its area.

Advertising was too expensive and local media weren’t targeted enough.

Solution: - Club officers leveraged personal networks to increase reach, and digital channels to share content.- Schedules, newsletters, photos, videos and othercontent was packaged to be sharable online.- Identified and exploited mid-level influencers,evangelists, volunteers and socially-motivated members.

Result: Day 1 - 5 founding membersDay 30 - 48 membersDay 75 - 179 membersDay 120 - 291 members


Result: Starting budget – $120.Membership $ - $25 apiece 291 x $25 = $7,275

Corporate Sponsorships for first year: 3 sponsors = $12,000

Within 4 months, the organization had generated almost $20,000 in revenue/funding.

The club invested this funding into events/races, custom club/team uniforms, T-shirts, car decals and other swag. We upgraded the website.

Phase 2: The club launched a series of youth triathlons to benefit various charities and research.Participation soared. (We raised A LOT of money.) A state Triathlon series was launched within the year.


We did this without Facebook, Twitter, MySpace, SMS or blogs.


Social Media tools didn’t exist yetbut the principles behind “Social” did.


We leveraged our social networks,developed them with purpose,engaged, recruited, promoted

and leveraged the ultimate app:

…?




People.




People.

(They come fully loaded.)


We were successfulin great part due to this:



1. We had clear objectives.



1. We had clear objectives.2. We understood this:



1. We had clear objectives.2. (We understood...)

3. Our activities supported our objectives.



1. We had clear objectives.2. Some were not financial. Others were.

3. Our activities supported our objectives.4. We measured success in terms of outcomes:

- Financial- Non-financial



1. We had clear objectives.2. Some were not financial. Others were.3. Our activities drove to our objectives.

4. We measured success in terms of outcomes:- Financial- Non-financial

5. Without revenue, we were cooked.

Drinks for Everybody!

Ask away.

Olivier Blanchard864.630.7398www.thebrandbuildermarketing.com@thebrandbuilder (on Twitter)

http://smROI.net

And now, an exercise…

And now, an exercise…

1. Write down your organization’sreason for being: …

2. Write down your principal objective.What is the most important thing you want to

accomplish. (Not financial)

2. … Now quantify this. Give it a value. (Not $.)

Make it a specific target.

3. Now give me two more.

3. … Again, express them in terms of a specific value: Members, birds rescued, etc.

4. Now write down your 3 top financial objectives.

5. Write down how each financial objective plugs into your three main overall objectives.

R.O.I. = maximizing enablement





Enablement

How will you measure success every step of the way?

Measuring success: Defining metrics early

? ? ?? ?

Non-financial objective?

A leads to B leads to C leads to D...


? ? ?? ?

Non-financial objective?Start here.

Define Metric/value.What is my target?How much $ do I need to do this?


? ? ?? ?


Now move here.My $ target is $x.Where do I measure changes in $x?What behaviors leads to this?


? ? ?? ?


Now move here.My targets are X, Y and Z.My metrics are M, N and O.My channels are P, Q, R and SWhat behaviors drive these targets?

Plan first. Map out the route.Identify relevant metrics every step of the way.

Measure here…

Not here.

Now start from the beginning. 1. Baseline. 2. Timeline…You planned from outcome to catalyst.

Now measure from catalyst to outcome.R.O.I. = financial metrics within this process.

Your metrics

Q: What is the 2012 objective?

(Not 5,000,000 fans on Twitter)

A: Re-election.

Main non-financial objective(s)Get elected in 2012

Q: What is my most important resource?

A: Campaign funding. (It enables everything.*)

* Understand your business and its mechanics. If you don’t, you are flying blind.

Main non-financial objective(s)

Q: How does Social Media fit in?

A: Above all else, it yields campaign contributions.

A: How it yields campaign contributions.1. Directly through vertical engagement

2. Indirectly, through lateral engagement (WOM + peer influence)

Let’s plug-in F.R.Y., just for fun.

Can we increase the frequency of contributions?

Note: Most Obama For America online supporters gave little, but they gave often. Frequency was a key factor in the O4A strategy.

Can we increase the frequency of contributions?

YES.Increase frequency of interactionsAsk more oftenUpdate swag more oftenRepeat message more oftenEngage more oftenSM is more cost effective than paid media


To specifically drive

Can we increase our reach?

Second largest search engine in the world, only to Google

Twitter now has over 100 MILLION registered users.

55,000,000 tweets per day.

37% of users tweet from their phones.

All talking to each other all day long.

Facebook has over 500 MILLION users

Millions of people are content publishers now.

Don’t forget…

Can we increase our reach?

YES.Seed and grow our channelsHelp our supporters share contentAsk our fans to share contentArm our fans with toolsMake our reach strategy clearVertical + Lateral engagement

Can we increase our Yield?

Can we increase our Yield?

YEP!Foster depth of engagementDevelop and build loyaltyIncrease involvement of fansUnderstand the value of timingBuild clarity of purposeAsk when we need to ask

Because the objectives dictate the tactics...

… the objectives also dictate the metrics.

The metrics are the vital signs of your program.

Every measurement you take has its place and tells its part of the story.

4

2

53

Start here…

Ignore here.1

Connect the dots.

R.O.I. is a crucial link in the measurement chain.

And please, no more of this.

I’m a Social Media guru.Behold my army of followers.My personal brand is golden.

Only measurefollowers, fans, visitors,

downloads, click-throughs,mentions and web stats.

That’s Social Mediameasurement, baby!

Dig it.

Ask away.

Olivier Blanchard864.630.7398www.thebrandbuildermarketing.com@thebrandbuilder (on Twitter)

http://smROI.net

Buzz 2010 presentation

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