Return On Investment: Here comes the money!

New-Marketing-Funnel1

Page 102, Groundswell.

… Forrester Research analysts put it this way, “The funnel has outlived its usefulness as a metaphor. Face it: marketers do no longer dictate the path people take, nor do they lead the dialogue.” Once people are aware of your product, a new dynamic kicks in: people learning from each other. Social technologies have revved up that word-of-mouth dynamic, increasing the influence of regular people while diluting the value of traditional marketing.

That’s nuts!

The question then becomes, “why aren’t businesses utilizing social media?” I feel its a good time to remind everyone that social media isn’t just Facebook and Twitter. Social Media is basically anywhere that user generated content can be shared/discussed online. We’re talking forums, YouTube, comment sections, message boards, and even to an extent, depending on your goal, instant messaging and email could qualify although the privacy of these likely excludes them unless you’re using them like direct mail(HYPERLINK).

The answer to why a lot of business don’t feel social media is necessary for them is probably because 1) they don’t know how to measure the Return On Investment (ROI) or 2) they don’t know how to engage and speak groundswellian. However, they both go hand in hand quite well.

Measuring ROI relates back to the POST Process. What are you trying to accomplish? So how do you measure Return On Investment in social media? It depends. What did you set as your goal? Make money? Raise awareness? Both?

Well I went and talked to two people about ways to measure ROI; Ray Bilodeau (Marketing Instructor, JR Shaw School of Business NAIT) and Peter Ono (GM, Digital Marketing & Research at CashStore Financial). They gave me a few ideas of POST goals and ways to measure if you’re actually getting ROI from them.

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Example 1) Goal – Generate sales leads
It isn’t easy or cheap to generate new sales leads through traditional methods. Social media can do this for you at a relatively cheap price. We’re talking Google Ads, Google AdWords/Cost Per Click, Twitter, Facebook ads, YouTube videos, etc. All of these can be relatively inexpensive and can generate far more sales leads for your company than cold calling, direct mail, referrals, etc. Dell has a Twitter account dedicated to selling refurbished computers at an outlet price. It has over 1 million followers. So over 1 million people will be seeing and racing to buy the new great deal they post on a refurbished computer. Thats good.

As far as using Google or Facebook Ads and Adwords/Cost per Click, you can use these to generate plenty of sales leads. Making up numbers, you can have 1,000 people look at an ad in a week. Say you get clicks from 32.33 (repeating of course) percent of those who saw the ad, and then convert on 32.33 percent of them, then that is 100 people that came to you for business and probably only costed your company like 400 bucks on Google. Thats a pretty darn good cost per customer, once you factor in lifetime customer value especially considering the time savings.

Example 2) Goal – Time savings
Time is money. The more time you can save on non-money generating tasks leaves you with more time to spend on money generating tasks. Its easy to manage customers over the internet. Instead of engaging in a personal one-on-one you can engage in a one-to-many format. Hypothetically, you generate 6 leads in an hour by some form of cold calling/referrals/traditional practice. If you can spend 10 minutes in that hour and create 16 leads over social media your productivity just shot through the roof. Search some hashtags, browse some forums/message boards, comment on a blog. Get yourself/your company out there.

Time savings can also work on the customer service side. WestJet’s twitter account is great for this. TicketMaster is good at it too. People calling your company is expensive. If that call takes up 15 minutes of a persons day, then they can only help 4 people an hour. Whats worse is that most of what they are helping people with is likely easily accessible information on your website. But if these people can tweet you and get a prompt reply (say 5-10 minutes) then the number of people you can help in an hour could increase by a whole lot. The faster you help people the happier they are with their experience. A lot of companies are also doing live instant messaging help on their websites now too. This is great. I didn’t even have to click around Sundance Mazda‘s site when I needed to take my car in because the helper in the chat window did it for me.

Example 3) Goal – Communicate a message
Think of this as an email to your active customer base. An email they’ll actually read and not just delete upon arrival. One method of this would be a blog post. This is another instance of time savings. If it takes an hour to write and post the blog and say 7 minutes for someone to read it, and there are 300 someones reading it, then you just saved a number of minutes that I am not going to math out. Its a bunch. This could be done for external readership. Save your community managers a bit of time.

This could also be done internally. If you’re the CEO or some higher up in a larger company, this could be a new and more personable way to get that latest memo out there and maybe instead of “reading” it your employees will actually read it. The same type of time savings can apply here too. Say instead of having to meet one-on-groups at your business, you could post this blog and then only people with questions would need a face-to-face. Or, maybe this blog creates a discussion amongst your employees and they find ways to answer those questions amongst themselves increasing your time savings.

Example 4) Goal – Discussion
Why would you want to create a discussion? Maybe you can save yourself some dollars in R&D or market research if you can energize a conversation the right ways. If it only takes a few hours to collectively spark, condense and analyze a conversation within your market/customers/clients then that is some pretty nice ROI isn’t it? Its a form of direct feedback that is probably a bit more useful than an online survey where everyone clicks through on the middle select to finish quickly. This is where your blogs and comment sections, and internal or external forums and message boards really can come into play and serve your company well.

Also, if you manage to get a real discussion rolling then maybe your energized customers will share their experience (word of mouth) to others and your company’s presence just expanded. Maybe someone Google’s their issue and comes across your archived discussion and finds the answer to their problems and you and the customer get some time savings from this.

In conclusion, social media is a really powerful tool but you have to know what you’re doing and know what you want to accomplish. I wish I had a pun to close this out but I fear that might ROIn it. (Get it? Ruin… ROI… ROIn)

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___

And thats a wrap on my social media class and the accompanying book. I want to thank everyone for reading and I encourage you to check back irregularly for irregularly scheduled random blog postings. Also, please follow my Twitter for obscure references and occasional musings. If you’re a business pro who wants to know how my combination of killer street skills and ingenious marketing ideas can improve your business, feel free to connect with me on LinkedIn and we can discuss big fat financial terms there.

See you later and have a Merry Christmas!

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