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Social Marketing and PR ROI

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• Revenues from enhanced Marketing Funnel Dynamics• Increased word of mouth and customer influence:

Shares, referrals, online reviews, key message pick-up,…• Increased marketing lead conversion rates

• Savings from:• Consumer Insights.• Brand protection.• Reduced marketing costs.• Reaching PR objectives faster, better, cheaper:

• Increased awareness, reach, relevance, engagement,…

Marketing & PR ROI Gains

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Common costs for social customer service programs:

• People,• Process,• Technology.

ROI Costs

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ROI = (Gains - Costs)/Costs x 100

ROI is shown as a percentage.

ROI Formula

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Sample ROI:Client Case Study #1

Sales revenues from Marketing Program

(Medium-sized brand for baby care products.)

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1. To lead and own the conversation on baby care WOM channels.

2. Increase awareness, reach, relevance, share of voice, positive sentiment in online conversations about diapers compared to competitors.

3. Educate moms on the new concept of Babies’ Stage of Development (BSOD) to generate interest for diaper product.

Challenge

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1. Create online presences and invite parents to share and learn about their babies’ development.

2. Develop online PR program for baby care websites targeted at parents to build up a WOM channel to increase influence among parents and establish/drive loyalty among consumers.

3. Determine ROI of program.

Solution

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• Average volume of social conversations• Before: 1,380,000 in previous 6 mo.• Goal: Add 168,000 convos over a 6-mo period (12% increase).

• Add 5,000/mo from registered users uploading photos and essays to branded site.

• Add 10% to convo volumes = 23,000 other convos/mo in 3rd party blogs, their own tweets, etc.

• Social media sentiment• Before: 42% positive, 36% neutral, 22% negative• Goal: increase positive sentiment

• Sales and Revenue• Before:

• Annual sales = $156M• Sales/convo before program = $56.52/convo

• After: Increase annual sales and value of purchase

Projected program stats (conservative)

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Revenues =

Impact x Reach x Yield

* We look at changes before program versus estimates of expected after results.

Formula for Revenue Gain

Influenced convos

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Impact

Impact = Positive sentiment x Listening Rate= 42% x 10%= 4.2%

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Reach = Extent of online footprint

Reach = 1,380,000 convos in previous 6 months= Avg of 230,000 per month

= 5,000 posts/mo on website+ 23,000 other convos/mo across web (blogs, tweets, etc).

= 28,000 convos/mo= 168,000 add’l convos total for 6 mo

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Influence factor

= Impact x Reach

= 4.2% x (168,000 convos)= 7,056 influenced convos for 6-mo period.

* Influenced convos = # of impacted, add’l convos.

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Yield

Add’l sales= (Rev/convo) x (# Influenced Convos)= $56.52 x 7,056 convos= $398,805

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Costs

People costs = $49,000 for employees for 6 mo

Process costs= $163,000 for agency for campaign

Technology= 60,000 community solution

Total costs = $272,000

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ROI = (Gains - Costs)/Costs x 100

= ($398,805 - $272,000)/($272,000) x 100

= 47%

ROI Formula

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Registered users = 38,700 (29% higher)

Total conversations across social web = 196,560 (17% higher)

Social monitoring = 44% positive (+2% climb)

Revenues/convo = $61.61 (9% higher)

Actual Sales Impacted = $532,842

Actual ROI = 96% (2x higher than forecast)

Actual program stats

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Sample ROI:Client Case Study #2

Consumer Insight Savings

(Medium-sized software company.)

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Challenge - Cut the cost of gaining consumer insight.

Solution – Use social media in lieu of more expensive focus groups.

Challenge and Solution

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Average cost per survey or focus group= $15,000

Recommended # of surveys per year= 1 before each major release= 2x per year.

Total cost of recommended surveys= $30,000

Program stats

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Cost of personnel= 1 marketing person working 20% of time on monitoring= ($112,000 burden compensation) x 20%= $22,400

Cost of social monitoring= $6,000/yr

Total costs = $28,400/yr

Program stats

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ROI = (Savings Gains - Costs)/Costs x 100

= ($30,000 - $28,400)/($28,400) x 100

= 6%

Recommendation – Do either 2 surveys per year or social.

ROI Formula

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What if company wants ongoing real-time customer insights?

What would ROI be then?

What if?

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Savings Gains= Price of 4 surveys per year= 4 x ($15,000/survey)= $60,000

Costs= Cost of personnel = $22,400/yr= Cost of tech = $6,000/yr= $28,400/yr

What if costs…

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ROI = (Savings Gains - Costs)/Costs x 100

= ($60,000 - $28,400)/($28,400) x 100

= 111%

Recommendation – Do social media for consumer insights or do a mix of social media and surveys.

What if ROI

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Contact information

Kathy Herrmanninfo@kathyherrmann.comwww.kathyherrmann.com

@KathyHerrmann+KathyHerrmann

Natalie PetouhoffDoctorNatalie@gmail.com

DrNatalieNews

@DrNatalie+DrNatalie