Last Friday morning, I had an informative conversation with new friends Paul May and Jeremy Bencken of BuzzStream. The topic was return on investment (ROI) in the world of social media/social marketing and whether companies will continue to spend money on social endeavors without a demonstrable return on their investment. What spurred the conversation was Paul’s recent blog post inspired by friend and fellow blogger, Jason Falls, similarly focused post.
What I liked about our discussion was the fact that Paul, Jeremy and I were all completely aligned. While we appreciate the “Clue Train” mantra that many folks cite these days about social media/social marketing being able to put a “human face” on a company, at the end of the day a company needs to be able to be capable of demonstrating real results from their social efforts. What this doesn’t mean is that the two goals need to be mutually exclusive and in fact, when done correctly, a company can enjoy greater results by being human AND tapping into the power of social
This is reinforced by what we’re seeing in terms of results from some of the companies that our company, Powered, helps our customers enjoy (yes, I know I promised I wouldn’t talk too much about Powered but the results we’re seeing from our customers social marketing/elearning programs reinforce my point). As we wrap up our annual ROI report, here are just a few of the preliminary results our customers experienced in 2008.
Of our customers’ web site visitors who participated in one of our “Powered” learning centers/managed communities:
- 92% would recommend our customers’ site to a friend
- 95% would visit our customers’ site again
- 85% would recommend our customers’ brand to a friend
- 66% would be more likely to purchase from our customers’ brand
- 63% have a more positive view of our customers’ brand
Yeah, I was impressed when I first saw these numbers too, but what I really liked was the fact that our account services and content teams here make a point of regularly encouraging our customers to be open, honest and transparent with their customers. One might think this is a no brainer given the fact that our customers are investing time and money into these programs but that’s not always the case (as evidenced by Gartner’s recent report). Even better, most of our clients actually listen to us.
So is your company measuring ROI around its community efforts? Does your community tie to specific business goals like engagement, loyalty, purchase intent or other traditional marketing metrics? If not, you may want to start thinking that way. While it’s important to put a human face on your brand (and that can likely be the BIGGEST area of impact for your company), having measurable programs will be critical in helping protect your social marketing/social media programs in tough times while the world sorts through its current credit/financial mess.
If you have examples of companies that are doing a great job of growing and measuring their “social” efforts, please include in the comments below.
Cross-posted on http://blog.stroutmeister.com
Filed under: Engagement Marketing, Social Marketing Tagged: | Gartner, Jason Falls, ROI, Social Marketing, Social Media
I think you absolutely should measure the ROI of social media. I was actually at a panel discussion on this exact topic last week as part of the Social Media Breakfast series in Boston (link to a video of the panel in my name). Andrew McAfee (Harvard Business School Professor) had an interesting “just meausre what you can, but don’t be obsessed about ROI” point of view, which I think makes a lot of sense. You need to think about the ROI of computing an ROI (so to speak) and make sure you are not taking too much time and effort gathering and analyzing data, vs. doing real work. But, to not thnk about meausring anything is a bit crazy too, because if you have a business you need to justify your time and budget allocations somehow.
Mike – thanks for weighing in. I watched your presentation (virtually) and wished I was able to be there in person at the SMB #10 in Boston.
I agree with you (and McAfee) that you can’t spend too much time agonizing over measurement, at least not at the risk of “analysis paralysis” but at the same time, there must be balanced with not allowing budgets to be cut due to lack of ROI. Sounds like we’re singing from the same song sheet!
Thanks for the mention, Aaron…picture me shaking my head in violent agreement as I read the ROI numbers you presented. I suspect that these are the kind of numbers upper management is increasingly going to expect from marketers (particularly in this economic environment) and I think it’s a reasonable expectation. The numbers are there, it just requires some work to think through the goals for a project and the metrics that correspond to these goals.
Regarding the disconnect between thinking in terms of ROI as opposed to putting a human face on the business – I can understand why this makes people uncomfortable. At first blush, the idea of measuring engagement seems to contradict the idea of authentic conversations, but in my view, there’s no real contradiction. The way I view things is that engaging in an authentic manner is a pre-req for success and measurement just helps you ensure that you’re interacting with the community in the way that provides them with the most value (i.e., if you’re adding value, it comes back to you in the form of more leads, increased customer satisfaction, brand loyalty, etc.).
As far as great ROI case studies, Pam O’Neal (a BuzzStream advisor) has a great one for word-of-mouth marketing. She quantified the value that resulted from a viral video campaign in a two-part series. Here are the links:
http://budurl.com/98zs
http://budurl.com/jdfu
Thanks Paul. As we discussed last night, I think we’re going to do a whole lot more agreeing over the coming months. Thanks for passing along Pam’s case studies. I’m checking them out as we speak.
Best,
Aaron
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[...] community or social presence? Unless you can get people telling their friends and family about you (something online communities/social media is also good at) you have to hope that a magazine or newspaper will write about you or the editor of a third party [...]