Social Strategy: 3 Paths to Social ROI
April 11, 2014
According to eConsultancy, Only 8 percent of companies say they can determine Return on Investment (ROI) from their social media spending (source: Econsultancy). From their Global CMO study, they find 63% want to measure the ROI of their social investment. Yet, many social pundits – while giving “lip service” to the concept of ROI, have “surrendered” to the ROI challenge and, have instead, encouraged their followers to simply focus on the “intangible” justifications for a social strategy. In other words, don’t worry about the lack of social ROI, it is intuitive it benefits your organization and that is justification enough.
While these types of articles imply you don’t need to really consider or develop the ROI from your social investment, nothing could be further from the truth. If you consider the “opposite side” of the IBM quote, if 63% of all organizations would like to measure their Social ROI, this means 27% of them can. That is the direction I used when I started researching my new book – “Social IMC – Social Strategies with Bottom-line ROI“.
The fact is there are thousands of companies who are using Social as an integrated part of their marketing mix. Their social strategies develop very specific KPI’s and provide a way to track their social investment from first social contact through to final purchase from the organization. And these companies are no different than yours. In developing my book, I looked at B2B and B2C companies ranging from start-ups to Fortune 100. I examined for profit and not-for-profit firms, governmental organizations, and organizations across the globe. From Africa to China, to the Pacific Rim, to Europe to the Americas, companies are designing, developing, deploying, justifying and measuring their social investment with the same precision as their other marketing investments. The key is not to simply rationalize the fact you don’t have ROI today, the key to success is to look at your social investment through a marketing prism. Start with your high value markets and you can develop strategies which transform your social programs into revenue producing, market share generating assets to your organization.
While my book goes into the strategies in great detail giving you the metrics, methodology, and best-of-breed examples from across the globe, there are three paths you need to consider in re-thinking your social investments from an ROI perspective. They are:
- Start with your High Value Markets – Man pundits advocate specific site strategies. Whether it is blogging, building your Facebook presence, Tweeting, building your PInterest presence, etc., they focus on content and engagement, not ROI. The path to an ROI strategy starts NOT with social networks but with your High Value Markets. The goal of social strategies with bottom-line impact is to develop strategies which build 1-to-1 relationships with your high value markets. Using social to build relationships rather than followers is one of the paths to social with measurable, provable bottom-line results.
- Think Multimedia Engagement – If you look at social from a marketing perspective, it is logical that your high value markets are engaging on multiple levels of the social pyramid. Whether they are consumers or business professionals, they are seeking expertise and information using blogs, websites, social networks, private virtual communities, videos, passion sites and a host of other social options. For success, you need to understand where your high value markets are congregating, who is at the center of their conversations [the influencers] and where they are congregating. This will allow you to maximize your impact by engaging them on the levels they “inhabit”. This is where social monitoring comes in.
- Build Relationship Funnels & KPIs – The final path is to begin thinking of your social strategy as a journey rather than a networking site. To build a business relationship, you need to take your prospects through a process [a relationship or performance funnel] from prospect to customer [and beyond]. While many of these relationships will occur exclusively in social, many can use other marketing channels [sales force, conferences, meetings] to close the sale. When I work with companies through my consultancy, we start by identifying all of the “steps” from suspect to customer. Each level is quantified, valued, and then we begin by determining the performance required in each step of the process to be profitable. Comparing every pair of behaviors in the relationship funnel gives us the KPIs [Key Performance Indicators] we need to manage the ENTIRE process from social contact through to purchase.
In summary, there are thousands of companies across the globe who are implementing highly effective, highly efficient, and highly profitable social marketing programs with their high value & high opportunity markets. The key is to understand how best to use social as an integral part of your marketing mix. Today, Social Strategies with Bottom-line ROI is a necessity and you need to know how to design, develop, deploy, measure & justify your social programs for your organization to grow and prosper.
Randy Hlavac is a social and integrated marketing expert. In 1990, he founded Marketing Synergy, Inc [MSI]. MSI helps business and consumer focused companies define, engage & acquire high value communities using social, web, mobile and integrated marketing technologies. Using value based predictive systems and marketing databases integrating social and integrated marketing channels, MSI’s clients build profitable, long-term relationships with their most valuable market segments. Marketing Synergy aids its clients in developing and deploying the marketing database, analytical, and marketing systems necessary to achieve their business goals.
In addition to being the CEO of Marketing Synergy, Randy is also a Lecturer at Northwestern. He teaches courses on digital, social and mobile marketing. Randy is a social marketing blogger and his first book – Social IMC – Social Strategies with Bottom-line ROI is available on Amazon. Randy also writes articles for the Journal of Integrated Marketing, Chicago Association of Direct Marketing and is a frequent guest blogger on social, marketing technologies, and integrated marketing.
Randy can be reached at RHlavac@SocialIMC.com. You can also reach Randy on Twitter at @RandyHlavac or on LinkedIn at randyhlavac