According to a recent survey conducted by Decipher on behalf of the Word of Mouth Marketing Association and the American Marketing Association, 70% of the markets anticipate that in the year 2014, their companies will increase social media spending.
Social media is no more an option today. It solely is a matter of how effectively and creatively brands adapt this medium. Yes, it is very powerful and at the same time, it’s very tricky – I am saying tricky because social media marketing is becoming more and more complex. Everyone is talking social, every online website wants “social integration”, the number of social platforms is growing, social is within the reach of every smartphone holder, there is tons of data and there are hundreds of metrics to track.
Brands have been spending on marketing since ages and understand the power of ‘being in front of’ the target audience and grabbing the eye balls. I believe what adds a little complexity in social media is the fact that there are certain aspects like clicks, visits to the websites, fans, followers etc., which can be very easily quantified and therefore there is always a temptation to link “RoI” with these quantifiable aspects and completely miss out on other qualitative aspects.
“What do you want to measure the “social” or the “media” --- says David Alston of Radian6. Doesn’t it make you think about the true definition of RoI when it comes to social media? It definitely should - because the “Media” aspect is quantitative and “Social” aspect is qualitative.
Let me try and explain what I mean by this. Quantitative RoI means anything which can be measured in numbers – such as Number of visits to your site, number of leads, Increase in sales/ revenue, number of fans, followers, RTs, shares etc. Qualitative RoI is something which has very high qualitative value associated with it but it is hard measure it in number – this could include things like Interactions, Feedback, Loyalty, Trust, Passion or Brand Awareness.
Here are some of the examples of brands deriving qualitative and quantitative RoI through social media.
- Southwest Airlines: Southwest Airlines attributes more than $1 million in additional ticket sales to its presence on Twitter
- Marriott: Marriott has made more than $5 million in bookings from people who clicked through to the reservation page from Marriott's blog.
- Dell: Dell Outlet made more than $6.5M sale through its Twitter presence.
- Lenovo: Lenovo attributed a 20% reduction in call center activity to use of a community website for answers
- Naked Pizza: 68.60% of total dollar sales came from customers who said they are “calling from Twitter”
- Blendtec: Increased sales 5x by running the humorous "Will it Blend" Videos on YouTube.
- AT&T Community: 21,000 customer queries were resolved through the community tremendous reduction in call volume
- IBM: The developerWorks community saves $100 million annually with people connecting on the community instead of contacting IBM support.
- Accenture: Accenture is believed to have saved thousands of dollars per executive by using LinkedIn for recruitment instead of headhunters.
- Starbucks: Generated lot of new product ideas by asking users what want from Starbucks.
- Oracle: Trained 25,000 partners using social media which in turn not only reduced the costs but also boosted satisfaction and increased PR.
- TurboTax: The Twitter campaign to respond and answer questions during key tax season established the company as thought leader in the space and found that customers were 71% more likely to recommend TurboTax.
- Kogi Korean BBQ: Uses Twitter to let the customers know where the truck was and when it would be in their neighborhood which built a strong connect with the consumers.
- Home Depot: Appreciates technical support employees on Twitter through tagging (Moral boosting, unique appreciation)
- Quantity is not always the only metric – 5 engaged followers are better than 500 non-active followers
- Quality of interactions is crucial - 1 RT from an influencer can have much better impact than impressions to 1000 inactive ‘accounts’
- Conversation is as important as conversion – Social media offers an opportunity for two-way communication and brands should definitely leverage it for building connections with the target audience
- Negative comments also deliver RoI – provided you act on them in a right fashion. For example: If a brand properly handles negative comments from an irate customer on social media, other connected users automatically have a positive impression about the brand in their mind.
- Advertising cannot tell you consumer sentiment but social media can –use social media for such things and that’s RoI for you!
This article was originally published in afaqs special report on social media. Download the complete report here.