Role of 'Social' in the company & how we measure it?

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Role of 'social' in the Company & How do we measure it?

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Agenda®Roles of Social Media

®Understanding ROI & Conversion

®CRM & Salesforce Conversion

®Cost Saving


http://www.edureka.co/measuring-social-media-roiSlide 3

Role of 'social' in the company

According to the theory of value chain, every function in a company has to add value to increase the value added of the organization. Further, it is critical that the functions help in increasing the perceived value by the customer.




Social media is embedded within every function in the company, not just marketing and communication.

Then, social media is a powerful channel that can help leverage our brand's value and increase company's profitability.




McKinsey & Company, in a research published in 2010 noted that there are a series of actual benefits from

using web 2.0 in the companies.

This benefits are derived from:

Internal improvements, as better access to knowledge, cost savings in communication, or

innovation.

Better customer service, improved marketing effectiveness, customer satisfaction, lesser support

costs.

Improvements in the relationships with third parties.




However, companies not always embrace the full adoption and only focus on front-office traditional functions, like marketing and communication.

Even though, there are strong reasons to use social media and improve the economic results of the organization.




TATA DOCOMO is an Indian telecom company that acts a lot in the social networks. When it decided to

launch the brand, its target was to convert the first users in advocates of the brand. Further, it uses social

media to solve problems and issues, crowd-sources ideas (service usage, preferences, new services...),

increase more loyalty through higher engagement, and creating personal relationships with the users. It

has quite a good success between the young users.

Results according to SocialMention.com and Klout.com:

• Strength = 1%• Sentiment = 12:1• Passion = 52%• Reach = 16%• Klout = 82

Next target is to increase sales and billing.




If we have understood that social media is a very important part of the company, then we have to understand that these roles have to be covered by people developing those functions:

The Social Media Strategist or Social Media Manager, and the Community Manager.




The Social Media Strategist develops a strategic role that plans actions with a long term horizon. S/he must understand the business and the company's global strategy, at online and offline level. The global strategy is unique! The Social Media Strategist has to have strong links with the senior management, not forgetting the financial role.



Role of 'social'... (cont.)

The Community Manager develops an operational role, but not less important that the former. S/he is the one making effective actions devised by the Social Media Strategist. It is very important s/he understands that his/her work is part of a global plan that has to add value for the customer and, finally, generate some profit.




It is necessary that both the Social Media Strategist and the Community Manager understand that different roles within the company use different orientations, different metrics to monitor the results, different monitoring frequency, and using different tools.



ROI is Return On Investment

ROI is a financial concept that measures the net profit of a company, project or campaign generated in comparison with the invested costs.

Sometimes it is called profitability; ROI is Return On Investment, the profitability of an investment.

It is presented as a percentage indicating the net profit that has been generated from every invested dollar.



ROI is Return On Investment

It is a measure which is easy to understand and indicates the success of a campaign, project or campaign:

A positive ROI shows that the campaign has generated more benefits than costs.

A campaign with higher ROI indicates that it has been more successful than other one with lower ROI.

ROIM, another similar concept, is when we apply the concept of ROI to marketing.



Balanced Scorecard

We can help understand the company strategy using the concept of Balanced Scorecard (BSC), a tool to monitor the strategy.



Balanced Scorecard

BSC divides the strategy in four perspectives: learning and innovation, internal processes, customers, and finances.

All four perspectives are interlinked, so an improvement in one of the perspectives has a knock out effect on the rest.



Balanced Scorecard



Conversions

Conversion is the process in which the consumer or user goes through since s/he is conscious of

our brand until carries on or finishes the relationship.

Social media has contributed to make this relationship more dynamic and unstable, although the

monitoring and reaction capability is now bigger.



Conversions

Summarised in the AIDA model:

Awareness.

Interest.

Desire.

Action + Advocacy.



Conversions

SAP is a company which main product is an ERP. SAP focused in improving the

impact of its brand through the social networking sites (Awareness + Interest), but

at the same time it was looking for improving the knowledge on its brand through

the spread of best practices (Advocacy).



Conversions

»They focused in Facebook, Twitter and LinkedIn (note it is a B2B service).

»There was an accounts restructuring, closing 24 accounts; finally they remained

in 4 at

Facebook, 4 at Twitter, and 2 at LinkedIn.

»SAP was after critical mass for creating a community.



Conversions

Results:

95,000 followers in 11 months.

From the 223 accounts worldwide @SAPLatinAmerica ranks 19th in followers and

engagement.

17% interaction rate (action/impressions).

Increase of 25% in subscribers.

Although ROI was not measured, SAP reached the conclusion that the campaign

speeded up the process of sales conversion.



Conversions

Toblerone is a chocolate brand from Kraft.

In Philippines they tried to link the concept of gratitude to the brand.

They started a campaign to consider October the 20th as the National Thank You Day.

They got almost 500 thousand social hits.

But most interestingly, they increased sales by 132%,



Conversions

Justin Boots is an American brand of boots.

» After launching a new line of boots they were targeting 18-

24 year olds.

» With a budget of 120 thousand dollars they launched a

campaign in Facebook, Twitter, MySpace and Blip.FM.

» They exceeded the sales target by 30%.

» Estimated social attribution was of 95%.



Conversions

Blendtec is a blender manufacturer that was increasing sales.

With an initial budget of 50 dollars, they managed to create a first viral

video where they demonstrated how powerful the blender was. Other

videos followed through, blending ipads, chicken and Coke, iphones...

Up to more than 100 episodes under the slogan 'Will it blend?).

They multiplied sales by 5.

And launched a merchandising line of products.



What to Measure?

ROI is a comparison between costs and net benefits, so we need to measure the costs of a campaign, but the derived benefits as well.

ROI = [(Benefits – Costs) / Costs] x 100

For instance: invest $1,000 in a campaign that allows us to gain $1,500 in profits.

ROI = [(1500 – 1000) / 1000] x 100 = 50%



What to Measure?

Costs:

Personnel costs

Technology costs (hardware and software).

Other costs (design, computer programming, Adwords, etc)

Benefits:

Conversion

Cost savings

Branding



Sales Conversion

If you have been able to measure (or estimate) the number of new customers that have been acquired through your campaign, you can calculate the benefits from sales conversion using the customer lifetime value (CLV):

Sales conversion benefit = Conversions X CLV

CLV is a financial concept that represents the turnover that a customer will generate whenever he stays as a customer of our company.

For instance, a Coke's customer has a CLV of $2,000, while a Ford or General Motor's is $340,000.



Cost Savings

Increased brand visibility is translated in cost savings in promotion and advertisement.

Media equivalent value estimates how much we have saved by having free impressions. We can calculate it multiplying the number of impressions by a theoretical CPM, plus total clicks times a theoretical CPC, plus total leads times a theoretical CPA.



Cost SavingsCall-center reduction usage is another source of cost savings

It measures the reduction of costs in the service of customer support through a call-center. It can be calculated by multiplying the number of contacts made by the social channels times the call-center contact cost.

Chinese company Lenovo, former buyer of IBM hardware division, invested in customer service 2.0 good practices and created LENOVO SOCIAL, an internal community.

The results: 20% reduction in the number of phone calls. Agents productivity increase. Reduction in the resolution cycle measured in

days.



Cost Savings

Cost reduction in customer service

CarphoneWarehouse is a phone commercializing company; it decided to use Twitter as an extension to its call-center.

The results:

Receives between 80-100 tweets per week.

Between 12-15 require more than a tweet-answer.

Between 3-5 require derivation to the actual customer service.

Improved brand sentiment.

Reduced the resolution cycle.



Cost Savings

PitneyBowes, a company specialized in postage meters, noting the importance of social media launched at PB.com an internal community where moderators could only participate 24 hours after the user wrote the questions or stated the issue. The idea was for the users to help each other.

Call-center calls were reduced by 30,000 per quarter. With an estimated cost of $10 per call, this company considered a quarterly savings of $300,000.




Cost Savings

InfusionSoft is a company that provides CRM service, e-commerce and sales automation (emailing, social media, billing...). It has less than 25 employees.

Using social media and an internal community inform the customers about updates and news about the company and services.




Cost Savings

Before the project, they had 1 agent per each 55 customers, and customer satisfaction was 77%.

After the project, the number of customers attended per agent went to 172, and customer satisfaction grew up to 87%.




Cost Savings

Reduced costs in market research, since the interaction with the users in social media can provide with information on preferences, tastes, and opinions.

Savings in content generation (UGC, User Generated Content), if building a community is achieved and the users act as ambassadors of our brand.



Cost Savings

VISA Mexico developed a platform in which the users could upload their own videos and other users could vote for them. The winner would receive a trip to South Africa for the World Cup. The results:

The results:

355 Facebook fans. 64 uploaded videos. 28,724 voting users. Increase in the number of VISA payments of 19% during the campaign.



Cost Savings

Social media cannot only avoid worsening brand sentiment, but it may help to improve sales when the management has been done rightly.

Maker's Mark is an American bourbon brand that decided to water down its main product.

Improved online reputation management.



Cost Savings

Improved online reputation management.

There was a revolution in the social channels, with loads of consumers really angry about the decision.

The company reacted quickly and the senior management revoked the decision.

Sales improved 44%, and profits improved by 45%.

In just a few days saved the day. Do you remember what happened in 1985 with 'New Coke' to Coca-Cola? It took months to react!



Questions


Role of 'Social' in the company & how we measure it?

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