Discover the ROI of social
Building a successful social media organization and integrating it into a large, complex business is hard. Proving the value of that organization can be even harder, but the ROI is there—you just have to work for it.
Chris Cobb | July 22, 2015
I heard this complaint a lot when I first started working in the social space: “I can’t provide an ROI for our social team.”
At the time, it was true: Companies were in the early stages of establishing themselves on social platforms and doing nothing more than blasting random messages, images, and videos out to audiences they didn’t understand. Nobody had goals. Nobody had taken the time to think through a strategy, develop success measurements, build KPIs, or perceive desired outcomes. Nobody understood the data points that needed to be integrated. Yes, it’s hard to measure the value of an untargeted piece of content that doesn’t tie back to anything or have a specific call-to-action. So someone “liked” the post, so what?
“Spending on social media continues to soar, but measuring its impact remains a challenge for most companies.”
The fact is, social media efforts can be tracked with the same level of accuracy as other online activities. Social channels just take more time to mature, so measuring them becomes more challenging because nobody wants to wait on results. If you have defined goals, a solid strategy, the right tools, and smart people, you can provide that dollar value the c-suite is looking for when they ask, “Why are we doing this again?”
One solution: tracking metrics that are already associated with a dollar value.
- Cost per call – In the same way that you can use social to identify customer issues, you can use social to communicate resolutions that drive down call volumes. Every call prevented = $ saved.
- Cost per click – You already know what your marketing team pays for other media tactics (paid search, email, print, etc.) so by identifying how much traffic you’re driving to your website via organic social efforts, you can correlate costs/value.
- Cost per new customer acquired – If you know the cost of acquiring a new customer through traditional channels, compare it to a new customer that you brought in through social channels.
- Churn – Using social to build trusting relationships with customers decreases churn and the lifetime value that customer takes with them when they leave.
- Average revenue per visit – Compare sales revenue driven through social to revenue generated in other channels. For example: Do customers who interact with you in social purchase more?
Here are a few real-world examples:
Your goal is to reduce customer care costs. Your strategy is to gather insight from customers’ complaints about Product A that just launched last week. After gathering data from social channels, call center transcripts, and emails, you discover that customers who are complaining are unintentionally skipping a critical step during product setup. You immediately update the manual for new shipments and publish notifications for existing customers to Facebook, Twitter, and Instagram that all link back to an update published on the company blog. To measure success, compare call volumes regarding this specific issue and calculate cost savings based on cost per call.
Your goal is to increase revenue while decreasing marketing spend. Your strategy is to start marketing a new product via social channels. Taking a soft-sale approach, you include links back to your website and are able to track visitors by channel. To measure success, compare the social channel’s click-through and conversion rates to that of older channels such as email marketing. Then add up total revenue generated by those ‘social visitors.’
Now that social has matured and most companies are comfortably settled into various platforms, it’s time to begin delivering a story that tells executives exactly how your social media efforts are impacting the bottom line. Remember to look at ROI from every angle. It’s not always what you’re adding—what you’re saving the company can be just as valuable.
Chris Cobb is a Customer Insights & Marketing Solutions consultant in Slalom Consulting's Atlanta office. Chris specializes in helping clients develop successful online customer engagement strategies in the emerging social media space. Follow Chris on Twitter: @cobbwebz.