How to calculate the ROI of social media activities
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17-Sep-2014 -
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Transcript of How to calculate the ROI of social media activities
DEMONSTRATING SOCIAL MEDIA ROI
SESSION FOUR FCP/OBI training August 2013
ROI =
(Final value – starting value)
starting value
What is R.O.I.?
5x
20 x 5 x3 (or 300%)
Now with carrots
Examples of non-financial outcomes
• Increase in website visitors and/or time spent on the website
• Change in the ratio of positive/negative brand mentions• Increase in Twitter followers or Facebook fans• Increase in requests for product information• A 20% increase in subscriptions to the e-newsletter• A 200% increase in YouTube video downloads• 15 comments on the latest blog post
Examples of financial outcomes
• A 15% reduction in customer service costs by shifting a portion of customer service activity to Twitter
• A 12% increase in online sales during a Facebook campaign
• A decrease in cost per impression from £2.55 per person per mention of brand to £1.22 by leveraging social media channels
• £500,000 in sales attributed to new customers acquired through Facebook.
Gary Vaynerchucktv.winelibrary.tv
Twitter$15,000 on direct marketing
= 200 customers
$7,500 on bill board advertising= 300 customers
$0 (except time) on Twitter= 1,800 customers
Return rate for products with reviews
= 20% lower
Petco.com pet supplier
Reviews
Return rate for products with 25+ reviews
= 45% lower
…saving on shipping, restocking, and customer service costs
Customers who went to the website via a Facebook page
= 30% more sales than those who went straight to
website
Ford ExplorerFacebook
Sales directly attributable to links on Twitter in 2009
= $3,000,000
Dell ComputersTwitter
Blog about HSBC mis-selling + Twitter syndication
= national media coverage
Nick Bamford, IFA Informed Choice
Blog, Twitter
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
Tweets, RTs,
comments, ‘likes’,
downloads
Brand awareness,
Product sentiment
online reputation,
loyalty, share of voice,
Strategy and tactics (ie.campaig
n)
More customers, spending
more, more often (financial
ROI)
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
This is great but it’s not where financial
impact lives
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
This is great but it’s not where financial
impact lives
It’s here!!!
Start with “why?”
Enhance branding/awareness
Protect reputation
Enhance public relations Improve loyalty/retentionBuild community
Enhance customer serviceFacilitate research & development
Drive sales and leads
Start with “why?”
Showing a return
• Overall objectives – what do you want to achieve?• Identify metrics• Set an intelligent measurable goal• Activity• Measure – the ‘return’ is successful achievement of
the goal
Showing a financial return: FRY (© Microsoft)
• Frequency (increase in frequency of transaction by customers)
• Reach (net increase in customers) • Yield (increase in how much customers spend)
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
Tweets, RTs,
comments, ‘likes’,
downloads
Brand awareness,
Product sentiment
online reputation,
loyalty, share of voice,
Strategy and tactics (ie.campaig
n)
More customers, spending
more, more often (financial
ROI)
Step 1: Create Activity Timelines
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
Tweets, RTs,
comments, ‘likes’,
downloads
Brand awareness,
Product sentiment
online reputation,
loyalty, share of voice,
Strategy and tactics (ie.campaig
n)
More customers, spending
more, more often (financial
ROI)
Step 2: Social media reactions
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
Tweets, RTs,
comments, ‘likes’,
downloads
Brand awareness,
Product sentiment
online reputation,
loyalty, share of voice,
Strategy and tactics (ie.campaig
n)
More customers, spending
more, more often (financial
ROI)
Step 3: Measure transactional precursors
Loyalty
Trust
Awareness
Sentiment
Sequence of events between Initial investment and gain
Investment (£) Action Reaction Nonfinanci
al impactFinancial
impact (£)
Tweets, RTs,
comments, ‘likes’,
downloads
Brand awareness,
Product sentiment
online reputation,
loyalty, share of voice,
Strategy and tactics (ie.campaig
n)
More customers, spending
more, more often (financial
ROI)
Step 4: Look at Sales (or another FRY outcome)
Step 5: Overlay all timelines
activities
transactions
social data
web data
loyalty metricsetc.
QUESTIONS