Wednesday, April 13, 2011

Social Media ROI – Measuring the Quantitative and Qualitative Results

I was recently invited to speak on Social Media at the Startup Saturday Event in Pune.

During my interactions with various organizations and people, I realized that while many people do agree that social media is powerful and should be used for marketing; lot of them are concerned about the ROI and the measurement of the same. This made me choose “Social Media ROI – Why, What and How?” as the topic for the speaker session.

Here is an excerpt of what was covered in the session.

As a first step, we need to acknowledge that social media a combination of psychology, sociology and technology. So while defining the social media strategy for your company/ brand, you need to be extremely cautious about ALL these aspects.

The next thing is the approach which is taken while planning the social media campaigns. The ideal approach is: 
  1. Define Goal
  2. Identify Tools
  3. Decide Approach
  4. Execute
Many of the social media campaigns do not yield the desired results because many companies and brands directly jump to execution without going through the first three steps.

Companies need to first define as to what exactly they would like to achieve from their social media campaign – is it customer feedback, user engagement, leads or sales. Once the goal is defined, companies need to choose the right tools. For example: Although Twitter and Facebook are the popular social media platforms, there is no point in being on Facebook if your target audience hangs out on MySpace! Once the tools are identified, get a clear consensus on the approach and tone of your communication. And then the final step is execution.

Assuming that you followed all the steps and have started with your social media campaign, the next question comes to mind is – how do I calculate the Return on Investment (ROI). While considering the ROI, you need to decide what exactly you want to measure? Because social media has got “media” which has quantitative measurement matrices and “social” which has qualitative measurement matrices. By quantitative measurement matrices, I mean number of leads or increase in sales/ revenue. By qualitative measurement matrices, I mean interaction, feedback, loyalty, passion and brand awareness.

Here are some examples which describe how companies have got both, qualitative as well as quantitative ROI through social media.


  1. Southwest AirlinesSouthwest Airlines attributes more than $1 million in additional ticket sales to its presence on Twitter.
  2. Marriott: Marriott has made more than $5 million in bookings from people who clicked through to the reservation page from Marriott's blog.
  3. DellDell Outlet made more than $6.5M sale through its Twitter presence.
  4. Lenevo: Lenovo attributed a 20% reduction in call center activity to use of a community website for answers.
  5. Naked Pizza: 68.60% of total dollar sales for Naked Pizza came from customers who said they are “calling from twitter”. 
  6. Blendtec: Increased sales 5x by running the humorous "Will it Blend" Videos on YouTube.


  1. Starbucks: Generated lot of new product ideas by asking users what want from Starbucks.
  2. TurboTaxTurboTax started a Twitter campaign to respond and answer questions during key tax season. This helped them in establishing themselves as experts in their field whom the users could trust for opinion.
  3. Kogi Korean BBQ: Uses Twitter to let the customers know where the truck was and when it would be in their neighborhood. This made the customers happy and of course more number of customers for Kogi.
  4. Comcast: Provides customer support on Twitter which has got it more satisfied customers who are happy to receive instant online support
  5. Home Depot: Appreciates technical support employees on Twitter - Whoever provides the support through support tags the tweet with his/ her name. Customers love this because they exactly know who is supporting them and the employees’ moral is boosted with such public appreciation!

So, in a nutshell, for a successful social media campaign:

- DEFINE what you want to measure
- DEFINE your message and tone
- DECIDE your approach
- SELECT appropriate tools
- EXECUTE with diligence and consistency

If you have any more examples of successful social media campaigns, do share those as comments!


  1. This is a interesting and informative article wrt ROI.
    The simple and lucid language, with examples is a treat.
    Nutshell covers the summary and focus.
    Incidentally, my experience with ROI is "To Define What we want to Measure" is the easier said then done.
    Infact What to Measure takes the skill and experience to map to Vision of Business before we embark on any initiative.
    > I feel tips and if possible steps on How to Define, What we want tpo Measure will be of great .
    > If possible What not to do will also be of help.
    > Any examples in Indian and Asian continent start-ups wrt above topics of ROI will be good lead

  2. @Manoj: Thanks! Glad to know that you found the article useful. Your suggestions certainly merit for separate blog posts. To answer those in short here:

    1. How to define the goals: As you rightly mentioned, the goals have to clearly map to the business vision and business goals. For starters, social media great for connecting with customers, keeping them posted about your company / products, getting feedback from them, inviting them for beta testing of your products or sharing expert tips in your subject matter and establishing yourself as a knowledgeable partner - so more of qualitative than quantitative.

    2. What not to do: First of all, self promotion is a strict no-no on social media. It is considered as spam on social media. Secondly, any information which is unauthenticated, confidential or something which you would not announce or say in real life - don't say it on social media either.

    3. Examples: In India, social media is now catching up. I am not aware of any success stories of start-ups specifically with respect of social media ROI. Any comments from other readers in this aspect would be greatly appreciated.

  3. Congratulations Radha, this is very informative!

  4. @Radha, I was there at the SMM event. Amongst all the presentations your presentation was most useful for startups.

    I have intervieved some Indian Entrepreneurs using Social media effectively, and will post the first video on Woo Social Media TV and Udyog Vahini soon (last week of april).

  5. @Woosocail TV: Thank you. I am glad to know that you found the session useful. We look forward to the of the video!

  6. Very informative article Radha! You did mention about the returns but would you have cases to talk about return vs investment in quantitative manner. It would be a great insight for company like us to make right decision on our spending.

  7. @Yogesh: Thanks! Glad to know you found this article informative and useful. Mostly, the 'investment' in case of social media is in terms of time because most of the social media platforms offer great value in the free version as well. You need to be very creative and be willing to invest time in maintaining consistency on social media. Now, the time calculation becomes simpler once you know 'whose' time you are consuming in these efforts.

  8. @Radha: what you said about "being active at the places where target audience hangs out" is so true. Its a big gap that is missed my many, including me. Can you advice as to how we know where our audience can be found when our target is the general public, like suppose i want to sell tooth paste?

  9. @Bimchum: I would say go to places which are 'context sensitive'. For example: People on Facebook will be receptive to your ad about 'Toothpaste' rather than people on MySpace - because these ads can be only shown to people who are interested in your product say people who are looking for health related tips etc. Also, on every social media platform, people hang out with certain objective and you need to tap that objective.

  10. That makes sense. I got your point! Also your point that self promotion can be suicidal on social media is absolutely true. So it seems that for products like toothpaste etc, direct marketing is much more impactful, meanwhile social media could be restricted to advertising e.g. FB ads. Thanks Radha!

  11. @Bimchum: Well you are right - with a slight modification. For products like toothpaste, you should use social media for connecting with your users. Again, don't always think about 'selling'. Think about forming connection with your audience, getting them attached to your brand and the 'sale' becomes an obvious bi-product :)

  12. awesome! so very well said. Thats a great point easily missed. Thankyou so much for all your insight Radha!

  13. Hi Radha
    thank you for your article and the tips and examples you are from your perspective and part of the world. Very interesting indeed: Would it be possible to have additional information concerning some of the examples you are giving? (Links)? It would be interesting to further study the matter
    Greetings from Hamburg Germany to you

  14. Greetings from India :) Here are some of the links for additional information on the mentioned examples:

    Naked Pizza:
    Kogi Korean BBQ: