Easy Ways Retailers Can Measure ROI From Social Media Efforts
Transcript of Easy Ways Retailers Can Measure ROI From Social Media Efforts
Easy Ways RetailersCan ROIMeasure From
Results and Lessons from 4 Likeable Retail Brands
Social Media Efforts3media
CONTENTS
EXECUTIVE SUMMARY ........................................................................................... 3
INTRODUCTION...................................................................................................... 3
SOCIAL MEDIA MEASUREMENT OVERVIEW ........................................................... 4
THREE EASY ROI METHODS FOR RETAIL BRANDS ................................................... 6
CASE STUDIES FROM 4 LIKEABLE BRANDS.............................................................. 6
Traditional ROI %: Cumberland Farms, Things Remembered, and The Company
Store ................................................................................................................... 6
Facebook Fan Value: Things Remembered ....................................................... 10
Coupon Redemptions: Midwestern convenience store .................................... 10
CONCLUSION ....................................................................................................... 10
ABOUT LIKEABLE MEDIA ...................................................................................... 12
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EXECUTIVE SUMMARY
Social Media Return on Investment (ROI) has
been on marketers’ minds for years. While
other marketing channels have relatively
consistent approaches to ROI, companies have
yet to land on an agreed upon method for
determining Social Media ROI. We developed
this paper to show how retail brands can
measure Social Media ROI using three easy
methods: Traditional ROI, Facebook Fan Value,
and Coupon Redemptions.
Each of the three methods is illustrated using
case studies from four Likeable retail brands.
Cumberland Farms created a Free-Chill-Zone-
Day that led to huge word-of-mouth success
with over half of sales attributed to Facebook.
Things Remembered carried out two
promotions that drew positive ROI – a well-
generated one-day social campaign for brides-
to-be and an in-store social promotion for
Facebook fans. The Company Store established
a presence on Pinterest and saw significant
sales in the first few months. Finally, a
Midwestern convenience store implemented an
ongoing weekly blast promotion through
Facebook and Twitter using unique price look-
up codes.
INTRODUCTION
Several studies have been released showing the
effects that social media has on consumer
behavior and sales. In April 2012, Forrester
Research released “The Facebook Factor,” a
report answering the question: How much more
likely are Facebook fans to purchase, consider,
and recommend brands compared with non-
fans? Using logistic regression modeling,
Forrester Research explored a variety of factors
that impact whether a consumer will consider,
purchase, or recommend a brand. The analysis
yielded the “Facebook factor” and proved that
Facebook fans
are much more
likely than non-
fans to consider,
purchase, and
recommend the
brands that they
engage with on
Facebook. In the case of Best Buy, Forrester
found that Facebook fans are about twice as
likely to purchase from Best Buy as non-fans.
Shortly after the Forrester Research report,
ComScore published in June 2012 “The Power
of Like 2: How Social Marketing Works,” a study
about the effectiveness of Facebook ads and
brand posts. In conjunction with Facebook,
purchase behavior for Facebook fans of brands
and friends of fans was analyzed against a
control group. In the case of Target, Facebook
fans who saw earned media messages in their
newsfeeds were 19 percent more likely to buy
products at Target than the group that did not
see the messages, and their friends were 27
percent more likely to do so. The study served
as an additional piece of evidence in order to
Figure 1 Forrester Research, April 2012
Facebook fans are
more likely than
non-fans to
consider, purchase,
and recommend
brands
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prove to marketers that social media can
deliver a measurable marketing ROI.
While the aforementioned studies involve
complex modeling and control groups,
measuring Social Media ROI can be simple.
Likeable Media compiled a number of case
studies in this report demonstrating three easy
ways for retail brands to better understand how
social media translates into real business value.
We will walk through the importance of social
media measurement, then highlight the
methods for measuring Social Media ROI for
retail brands, and finally dive into some retail
case studies that use each of the methods to
show a positive ROI.
SOCIAL MEDIA MEASUREMENT
OVERVIEW
Social media measurement continues to be a
top priority for marketers. According to the
2011
Marketing ROI
&
Measurement
Study in 2011
by Lenskold
Group, a
marketing ROI and measurement firm, 55% of
marketers surveyed responded that social
media measurement is a high priority. The top
reasons for its importance include:
the need to improve effectiveness
the need to improve integration
with other marketing
the pressure to report quantified
outcomes
We have written quite a bit on social media
measurement and have even produced an ROI
Best Practices eBook showing marketers:
how to best evaluate ROI on social
media networks
how to analyze metrics on specific
platforms
how measuring ROI is different for
each social media platform
Before marketers can measure anything or even
begin to establish Social Media ROI, we
recommend following these five simple rules:
Identify what success will look like
Do not measure everything
Understand that different metrics
matter to different people
55% of marketers
surveyed responded
that social media
measurement is a high
priority
Figure 2 ComScore, June 2012
Figure 3 Lenskold Group, 2011
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Do not rely on tools to provide the
analysis
Focus on the above four rules before
tackling Social Media ROI
The most important step above is to identify
ideal outcomes in order to measure results
comparatively.
What does success
look like? What are
you trying to
accomplish? What
is the return you are
after? Adding clarity to the term “success” will
help show progress. Without it, you will only be
showing results without any reference point.
In addition to identifying success, we reiterate
that for social media measurement do not only
focus on obtaining likes and follows. More
followers and likes do not directly translate into
a higher ROI for your brand. People are not
making purchasing decisions based on how
many likes a brand has. And the companies
bringing in the most revenue every year do not
necessarily have the most likes on their
Facebook pages.
Furthermore, with measurement, you cannot
and should not measure everything. It is so easy
to over-quantify in the space as there are easily
as many social media
measurement tools as
there are tactics. With
terms like “sentiment
analysis” and “net
promoter score”
being tossed around
everywhere, it is easy
to get persuaded into thinking you need to
measure everything. The reality is that you
really only need to measure what matters to
you and what will help craft a strategy moving
forward. One of the most basic rules of
measurement is to identify and articulate what
you want to measure.
Another way to improve your measurement
strategy is to tie your social activity with a web
analytics tool, such as Google Analytics. With
third-party tools, you can dive deeper into
metrics in meaningful ways such as:
Understand and improve your overall
social media results. You will not only
be able to report on social media
activity but how that activity translates
into more engaged visitors on your site,
more orders purchased, and more feed
subscribers, to name a few.
Track specific campaigns. See how
certain campaigns performed compared
with others when it comes to
acquisition, behaviors, and outcomes
on your website.
Once you identify what you want to measure
and have a strategy in place, demonstrating an
ROI for social media is attainable.
The next step is understanding the definition of
ROI. ROI is a common way for businesses to
evaluate success. This type of measurement for
social media specifically has been difficult to
grasp as many businesses are unsure how to
properly execute it. A look at Social Media ROI
helps businesses understand what is working
and what is not.
To put simply, Social Media ROI is a measure of
efficiency. The common and traditional financial
formula many use to calculate ROI is:
Adding clarity to
the term success
will help show
progress
With
measurement,
you cannot and
should not
measure
everything
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Benefits typically refer to revenue, sales, or
savings from a campaign. Cost estimates are
usually the sum of the outcomes in the
following three areas:
People: The number of people who
worked on the campaign x amount they
spent on campaign x their hourly rate
Process: Any creative and marketing
costs
Technology: Any costs associated with
technology, systems, etc.
If an ROI result shows 250%, we can interpret
this as for every dollar spent on the campaign,
$2.50 in value was added to the bottom line. To
increase ROI, benefits ultimately need to grow
while costs and investments are held constant.
The higher the ROI, the more efficient and
effective the social media campaign. Where
marketers seem to
struggle is not on the
investment input –
that is easy to obtain
and plug in – but
rather the return
variable as it is far
more difficult to
quantify the benefits of social media.
THREE EASY ROI METHODS FOR
RETAIL BRANDS
Measuring Social Media ROI does not have to
be difficult. We have outlined three methods
using four case studies from Likable retail
brands that marketers can apply to show the
effectiveness of their marketing efforts. These
methods include:
Traditional ROI %
Facebook Fan Value
Redemptions
Each of these approaches is manageable,
valuable, and simple.
Using a traditional ROI % is as simple as
plugging in the investment amount spent on the
social media campaign, and the sales generated
from such, into the ROI equation. This method
is useful when the campaign or marketing
efforts in question have some sort of tracking
method, whether web tagging or a unique
product look-up (PLU) code for in-store
purchases.
Using the value of a Facebook fan is another
great way to measure Social Media ROI. By
devising promotions solely for Facebook fans,
retail brands can track their activities vs. non-
fans and validate if fans are more likely to
purchase (and by how much) than non-fans.
Finally, in addition to sales data, showing the
number of code redemptions as a result of the
social campaign or marketing also helps
measure the effectiveness.
CASE STUDIES FROM 4 LIKEABLE
BRANDS
TRADITIONAL ROI %: CUMBERLAND
FARMS, THINGS REMEMBERED, AND THE
COMPANY STORE
The following case studies illustrate how
positive ROI results can be obtained using the
traditional equation: ROI = (benefit – cost) /
cost %. Acquiring sales data that is directly tied
The higher the
ROI, the more
efficient and
effective the
social media
campaign
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to a social campaign can be accomplished by
presenting unique passwords or codes to
customers during the purchase process.
Cumberland Farms
WHO: Cumberland Farms, a 50 year old
northeast gas station and convenience store.
The company bought Gulf Oil’s gas stations and
trademark in the Northeast back in 1986 and
now has 600 stores in 11 states.
WHAT: Major changes to the store design and
layout as well as increases in fuel consumption
were occurring around the time of the
promotion. During this time, Cumberland Farms
was trying to reach too many audiences.
However, they did appear to have a passion
product in their frozen beverage– the Chill Zone
product with very little promotion. Previously,
the company had been solely focused on
traditional media to drive sales. Likeable Media
recognized there was an opportunity to
leverage the passion for the product to drive
offline sales through many inactive advocates.
As a result, the “Mix Up Yours” campaign was
born.
A well-executed engagement strategy grew an
active community from no fans to over 150,000,
and a subsequent Free-Chill-Zone-Day
Challenge propelled the campaign into an
enormous Word of Mouth marketing success.
The Free-Chill-Zone-Day Challenge arose from
fans posting that they wanted more free Chill
Zone products. As a result, Cumberland Farms
responded with a challenge promoted only on
Facebook: if the fan base reached 50,000 Likes
within 22 days, a Free Chill Zone Day would take
place.
HOW: A Facebook password was needed in
order to redeem the drink. Cashiers then
recorded those who used the password during
transactions and as a result, sales numbers
could ultimately be tied to this promotion.
Using the investment dollars that were put into
the promotion and the revenue that was
generated from such, the ROI was calculated.
RESULTS: In addition to the goal being reached
in 10 days, the campaign:
Had 50% of sales directly tied to
Figure 4 Facebook wall post and cover photo for Cumberland Farms
Figure 5 A Cumberland Farms store during the Free Chill Zone Day
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Increased Chill Zone redemption rates
by 20% in the first year and 23% in the
second year
Overall, the Mix Up Yours campaign generated
a 228% in ROI for Cumberland Farms. While
the sales information is proprietary and cannot
be disclosed, the following formula was used to
determine the ROI:
Things Remembered
WHO: Things Remembered is the nation's
largest and most prominent retailer of
personalized gifts with 600 retail stores in 48
states.
WHAT: Summer is the busy season for
weddings. Things Remembered wanted to
celebrate brides-to-be and offer its Facebook
fans an opportunity to attend exclusive events
at their local retail store. Attendees were given
a free personalized gift, private shopping, and
received expert advice by simply showing their
“engaged” Facebook status in stores via their
smartphones or a print-out. This one day only
social campaign run through Likeable Media
was promoted starting two weeks prior to the
event via frequent Facebook and Twitter
content, Facebook ads, and one email blast.
HOW: Since a free personalized gift was given
away as part of the promotion, cashiers were
able to record all transactions that included
such and thus all revenue tied to this promotion
was recorded. Using the investment that was
put into the promotion as well as the revenue
numbers generated, the ROI for this campaign
was calculated.
RESULTS: For the one day promotion, Things
Remembered saw some notable outcomes:
53% of all stores had a transaction that
included the free gift
Of the stores that did have a
transaction, the average store pulled in
one additional transaction and one
third of stores had additional sales on
top of the free offer
23.6% of the revenue increase for this
day compared to the same day last
year came from sales related to this
promotion
Overall, the Bride to Be Promotion had a 670%
ROI. While the sales information is proprietary
and cannot be disclosed, the following formula
was used to determine the ROI:
Figure 6 Facebook tab and ad used in the Brides-to-Be Promotion
ROI = Benefits – Cost Cost
ROI = 670%
ROI = Benefits – Cost Cost
ROI = 228%
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The Company Store
WHO: The Company Store, founded in 1911,
manufactures quality down and bedding
essentials. With a limited number of retail
stores, The Company Store relies on most of its
sales from its website and catalog.
WHAT: Pinterest is one of the fastest growing
social media sites according to “The 2012 Digital
Marketer: Benchmark and Trend Report” from
Experian Hitwise. The Company Store saw a
great opportunity to use Pinterest to increase
traffic to its website and ultimately drive sales
given that:
The demographics of Pinterest users
are also the key demographics for
customers of The Company Store.
According to ComScore, around 68% of
Pinterest users are women and 27% are
between the ages of 25-34. The
Company Store recognized Pinterest as
a prime opportunity to target their
demographic on a network that they
were already using.
Many design bloggers interested in The
Company Store products were already
using Pinterest and had been for a long
time. Launching a profile on Pinterest
would be a great way for the bloggers
to share The Company Store boards,
pins, etc.
The Company Store relies on orders
mainly from its website and catalogue.
This further proved the need to have a
presence on Pinterest as this site would
presumably drive additional visits and
sales to the website.
HOW: The Company Store used Likeable Media
to develop its Pinterest profile and boards. By
using a web analytics tool, sales generated from
customers coming from Pinterest were
documented. Incorporating the investment that
was put into maintaining the Pinterest account
as well as sales tied from the site into the ROI
formula, the ROI for this campaign was
calculated.
RESULTS: In its first 2 months on Pinterest, The
Company Store had:
35 boards on Pinterest with more than
600 total followers
Over 29,500 visits to its website driven
from Pinterest
Significant sales from Pinterest
Overall, Pinterest has driven a 224% ROI for
The Company Store. While the sales
information is proprietary and cannot be
disclosed, the following formula was used to
determine the ROI.
Figure 7 The Company Store’s profile on Pinterest
ROI = Benefits – Cost Cost
ROI = 224%
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FACEBOOK FAN VALUE: THINGS
REMEMBERED
The next case study shows how positive ROI
results can be measured using the value of a
Facebook fan. Showing sales data directly tied
to Facebook fans can be attained by asking
customers to show their fan status (for a special
deal perhaps) during the check-out process and
would ultimately be recorded during the
purchasing process.
Things Remembered
WHO: Things Remembered is the nation's
largest and most prominent retailer of
personalized gifts with 600 retail stores in 48
states.
WHAT: Things Remembered wanted to offer
Facebook fans the opportunity to earn double
rewards on purchases through an in-store
promotion. The goals were simple:
Increase Facebook Fans
Drive sales
Customers needed to like Things Remembered
on Facebook on their mobile device while in the
store to receive the double rewards. The
promotion ran from October 31, 2011 - January
16, 2012 across all 600 retail stores.
HOW: Upon checkout in stores, customers
showed the cashiers that they “liked” Things
Remembered on Facebook using their mobile
phones. For all transactions during the
promotion period, the cashiers would record
whether or not the purchaser was a Facebook
fan of Things Remembered.
Sales during this period were then ultimately
tied to the Facebook fan factor.
RESULTS: The campaign was a huge success and
showed some impressive outcomes:
20% of buyers liked Things
Remembered on Facebook during the
promotion time period.
63% of Facebook fans were new to the
company.
Overall, Facebook fans purchasing during the
promotion time period had a 35% higher
Average Dollar Sale (ADS) than non-fans.
COUPON REDEMPTIONS: A MIDWESTERN
CONVENIENCE STORE
The final case study shows how ROI can be
measured using codes redeemed from social
campaigns. Sales data directly tied to social
sites can be achieved by providing unique codes
for fans/followers that they can use during the
check-out process.
Figure 8 Mobile version of Facebook page for Things Remembered
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A Midwestern Convenience Store
WHO: Company with chain of convenience
stores in the Midwest.
WHAT: To reward Facebook fans and Twitter
followers and ultimately increase sales, the
Midwestern convenience store created an on-
going promotion with Likeable Media by giving
out free items weekly on Facebook and Twitter.
Using the unique price look-up (PLU) code,
customers would tell it to the cashier or show it
on their phone in order to receive the item.
HOW: A different code was provided via Twitter
and Facebook posts each week for the
promotional item. Once in store, the customer
would provide the code to the cashier upon
check-out and the cashier would then record it
in the system. All transactions using the unique
PLU code were therefore tracked.
RESULTS: With the promotion blasts, the
Midwestern convenience store has seen 56,173
codes redeemed that are tied directly to
Facebook and Twitter just in the span of one
year.
CONCLUSION
We have laid out three easy methods for retail
brands to measure Social Media ROI: Traditional
ROI %, Facebook Fan Value, and Coupon
Redemptions. Use these methods and follow
the approaches taken in the case studies to
understand and show how social media
translates into real business value and how
campaigns can demonstrate a positive ROI. Of
course, everything should tie back to your core
business goals.
Figure 9 Example of promotion post on brand’s Facebook page
Likeable Media is an award-winning, global social media and word of mouth marketing firm with a focus on the creation of compelling content. Likeable Media has worked with over 200 brands such as The Company Store, Things Remembered, Omaha Steaks, 1800flowers.com, Quality Dairy, Cumberland Farms, The Pampered Chef, Pendaflex, Ritani, Verizon, and Logitech. Likeable Media is recognized as one of Facebook's top 90 Preferred Developer Consultants, and is the only agency to win three consecutive WOMMY awards from the Word of Mouth Marketing Association (WOMMA). Likeable Media was named #118 and #146 in 2011 and 2012, respectively, on the Inc 500 Fastest-Growing U.S. Companies. Likeable consists of Likeable Media, as well as the corporate training program, Likeable U, and the small business software product, Likeable Local.
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Want to learn more? www.likeable.com
About Likeable Media
For more information on how social media can drive ROI for your brand, please email Mallorie Rosenbluth at [email protected].