Proving ROI for Social!

As we have talked about the challenges of proving Return on Investment (ROI) for social, we are at a stage where we understand the problem and need of the hour. But,

What is the solution?

How do we tackle these challenges and help with smarter business decisions?

With evolution in the age of marketing practices, from Age of Manufacturing(1900),  age of distribution(1960), age of information(1990) and finally to the age of Customer (2010), in today’s world of marketing, Customer is the key. This is the age where, to become a successful enterprise, it will have to reinvent itself to systematically understand and serve increasingly powerful customers.

This is exactly where social media comes into picture, as social media’s value is in people, where it provides an open platform for everyone to express their opinions and have conversations. Therefore, smart brands listen to people talking on social media and deliver what those people want, this in-turn helps to form the brand’s marketing strategy.

But the brutal fact is, even though social media is pivotal – Social teams still remain Siloed, and still forms a very small part of the marketing team itself. Companies cannot mature if they keep social media contained; instead companies should strive to keep the social media team involved in every department of the company and solve the problems based on communication activity.

Therefore, our focus should be about how we can add value to the company, not just in terms of content impact, but also bring value to their marketing and business goals. Social Data can influence the entire company, as it can play a major role in the following:

  • Customer Support – Delight angry customers
  • Research and Development – Finding an inspiration and feedback from the users, before developing your services/products. Dell and IBM are 2 very good examples for using Research and development with the help of social media.
  • Sales/Leads Generation – Building connections with prospects and uncovering barriers to purchase.
  • Human Resource – Attracting candidates and augment brand voice, as recruiting presence feeds brand identity.

Proving Social value is still the top challenge; therefore marketers need a business case in order to align social media objectives to core business objectives. To build your business case you need to follow these 2 steps:

Step 1: Estimate social media marketing costs, which includes costing for Social data, Content, Advertising, Technology and Resources.

Step 2: Estimate Social marketing benefits, which includes social measurement in terms of Content, Marketing and Business impact for the company. Social value increases when you demonstrate business value.

Let’s go deeper to understand these 3 types of impacts, which can be brought about by Social media marketing:

  • Content Impact: It talks about tracking topic’s resonance to improve social content execution. It relates to what kind of content you put across social media platforms and the social metrics.
  • Marketing Impact: This measures how well social programs serve strategic marketing goals by quantifying whether social is helping to meet the objectives across the customer life-cycle.

Business Impact: This is the most important impact which needs to be addressed to show social program’s deepest value and social’s contribution to Revenue and Brand Health (Example: Customer studies showing lift in brand recognition, favorability, purchase intent, Customer Experience Index, etc).

After we have our business case ready, just like an interview when you are set with your bio-data and experience, it is time to understand what the Interviewee is looking for in the candidate, for selection. This brings us to understand the mindset of Chief Marketing Officers (CMO), as to what are they looking for and their perspective about Social Media.

For a CMO, Company strategy comes first and then comes marketing strategy. The top concerns of a CMO are Revenue, Cost, Efficiency, Differentiation and Customer Satisfaction/experience. He also looks after protecting the brand and the overall value of marketing for the company, by building exceptional customer experiences and by being a market leader in customer relationship management front.

Often Social media team competes with the paid media team for budget, where paid media speaks more to CMOs in terms of Customer acquisition cost and Return on Ad spent, which provides a comfort zone. Whereas, organic social media, metrics and engagement rate, does not create that much impact. Hence, try to relate social goals with paid media goals and business goals to bring about the essence of social.

Further, monitor social data to change the perception of the brand in the market with other teams to improve entire customer experience by mitigating risks on social media. Try to correlate the business case to the primary goal of the company, and connect the Social media strategy to the broader strategy of the company, which will help you measure beyond content performance metrics. So the key take away is to identify business objective for social and connect to ‘activity” metrics with customer journey stages.

Final Key Takeaways:

  • There is always something new! Connect Social into existing company initiatives.
  • Don’t hide the risks with social; Highlight them!

Brand Health and Revenue impacts are the best places to begin for ROI!

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