The ROI of social media

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THE ROI OF SOCIAL MEDIA

Digital Publishing Forum, 16th Mar 2011

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Philip Sheldrake

Meanwhile

Blog

LinkedIn

Twitter

CIPR TV

Member, CIPR Social Media Panel

Chair, CIPR Measurement

www.andmeanwhile.com

www.philipsheldrake.com

/in/philipsheldrake

@sheldrake

www.cipr.tv

http://www.andmeanwhile.com/

http://www.philipsheldrake.com/

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4th March 2011 / Philip Sheldrake / Creative Commons Attribution Share Alike License 2.0 England and Wales3

This presentation is based on the The Business of Influence –

Reframing Marketing and PR for

the Digital Age, Philip Sheldrake, Wiley, April 2011.

The Business of Influence


Of the latest rebrand?

Of the office refurb?

Of the internal communications activity?

Of the training and development programme?

Of the upgrade to Windows 7?

Of the new standard issue smartphones?

Of the stakeholder engagement via social media?

What’s the ROI?

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THE BALANCED SCORECARD, STRATEGY MAPS AND ROI

A quick intro to business performance management.

4th March 2011 / Philip Sheldrake / Creative Commons Attribution Share Alike License 2.0 England and Wales

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The cascade

CASCADE Mission – why do we exist?

Values – what guides our behaviour?

Vision – what do we want to be?

Business objectives – to get from A to B

Strategy – the plan to get us from A to B

Strategic objectives – wholly necessary and sufficient to execute the plan

Tactics – activities to achieve the strategic objectives.



To win, organisations must approach this cascade with professional rigour.

7 out of 10 organisations simply fail to execute their strategies1.

The Balanced Scorecard is the most popular approach to BPM…

1. Balanced Scorecard Institute

Business performance management (BPM)


“The Balanced Scorecard transforms an organization’s strategic plan from an attractive but passive document into the 'marching orders' for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.

“It is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action.” – The Balanced Scorecard Institute

The Balanced Scorecard


Perspective

Financial Lagging

Customer

} Leading / performance driversInternal processes

Learning and growth

The Balanced Scorecard Perspectives


The learning and growth perspective entails sustaining the ability to change and improve to execute the strategy and achieve the vision across each type of capital:• Human• Information; and• Organisation.

Learning and growth


“The strategy map provides the visual framework for integrating the organization’s objectives in the four perspectives of a Balanced Scorecard.

It illustrates the cause-and-effect relationships that link desired outcomes in the customer and financial perspectives to outstanding performance in critical internal processes.”

– Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Kaplan and Norton

Strategy Maps


“The strategy map identifies the specific capabilities in the organization’s intangible assets – human capital, information capital, and organization capital – that are required for delivering exceptional performance in the critical internal processes.”


Intangibles


“Economic justification of these strategic investments can be performed, but not in traditional ways. The common approach is on a stand-alone basis: ‘Show the ROI of the new IT application’, or ‘Demonstrate the payback from the HR training program.’

But each investment or initiative is only one ingredient in the bigger recipe. Each is necessary, but not sufficient. Economic justification is determined by evaluating the return from the entire portfolio of investments in intangible assets that will deliver the ROI from [the strategic imperative].”


Return on investment

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THE INFLUENCE SCORECARD AND ROI

Plugging influence into business performance management.

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I use the word “influence” to mean both exerting an influence and being influenced.

You have been influenced when you do something you wouldn’t otherwise have done, or think something you wouldn’t otherwise have thought.

About influence


The Influence Scorecard is both part of and an augmentation to the Balanced Scorecard.

Influence performance management (IPM) is the ease and effectiveness with which we can manage and learn from influence flows; integral to the process by which customers, citizens and all stakeholders interact with organisations and governments to broker mutually valuable, beneficial relationships.

The Influence Scorecard


The influence strategy is the set of influence activities in which you must excel in order to help create a sustained difference in the marketplace. It facilitates organisational coherence, coordination and effectiveness of influence.

The Balanced Scorecard and Strategy Maps ensure that investment in intangible assets has ROI built in by design.

The Influence Scorecard ensures ROI is similarly built-in to all the influence activities identified in pursuit of the influence strategy.

Influence strategy and ROI

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IN CONCLUSION


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In most instances, anyone looking to link investment in social media activity to hard currency returns directly has a poor grasp of strategy design, mapping and execution.

Before asking “What’s the ROI of social media?” they must ask:

How exactly are we running this organisation today?

How do we determine investment in intangibles today?

Answer these questions, instigate best practice business and influence performance management, and investment in intangibles will speak for itself.

In pursuit of £ / € / $


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Recommended readingSocial Media Metrics: How to Measure and Optimize your Marketing Investment, Jim Sterne, Wiley, 2010, 978-0470583784

Measure What Matters: Online Tools For Understanding Customers, Social Media, Engagement, and

Key Relationships, Katie Delahaye Paine, Wiley, February 2011, 978-0470920107

The Business of Influence: Reframing Marketing and PR for the Digital Age, Philip Sheldrake, Wiley, April 2011, 978-0470978627

Social Media Analytics: Effective Tools for Building, Interpreting and Using Metrics, Marshall Sponder, McGraw-Hill, August 2011, 978-0071768290

Thank you

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Philip Sheldrake

Meanwhile

Blog

LinkedIn

Twitter

CIPR TV

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The ROI of social media

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