Putting the ‘R’ in ROI

Digital Advertising, Digital Marketing · By On · 1 Comment

One of the most com­mon ques­tions we hear from brand mar­keters is, “How do we mea­sure the ROI of our social invest­ment?” To which we reply, “What’s your ‘R’?”

Social ROI isn’t all that com­pli­cated. The con­fu­sion seen in the mar­ket­place stems from a lack of ask­ing the right ques­tions at the out­set. With­out know­ing what one is try­ing to mea­sure it’s near impos­si­ble to deter­mine ROI. Yes, for most com­pa­nies the “return” ulti­mately comes down to rev­enue, but many brands aren’t using social to directly prompt pur­chases. And those that are also need to take into account other exter­nal­i­ties, such as changes in brand loy­alty and life­time cus­tomer value.

Unlike tra­di­tional adver­tis­ing, which is directly focused on brand per­cep­tion and sales, social is a hybrid; it has com­po­nents of email, TV, word-of-mouth and media. Social can be effec­tive for cus­tomer reten­tion, sales gen­er­a­tion, brand per­cep­tion shift and even aware­ness. Which means that the ROI of social is a topic impor­tant to all inter­nal stake­hold­ers. For some, this might be the rein­forced brand loy­alty and affin­ity sparked by resolv­ing a cus­tomer ser­vice on the “wall” or in the Twit­ter stream. For oth­ers, it’s procur­ing the ideal employee from a job post­ing on the com­pany Face­book page. And for another group­ing, it’s impres­sions earned by suc­cess­fully imple­ment­ing a viral sweep­stakes. Depend­ing on one’s goals and expec­ta­tions, the “return” on a social invest­ment can be vastly dif­fer­ent, illus­trat­ing why there are so many diver­gent opin­ions on social’s value. Nonethe­less, this “return,” and the invest­ment for that mat­ter, are clearly impor­tant to all, despite the uniquely held goals.

With social media mir­ror­ing the effects of more tra­di­tional mar­ket­ing chan­nels, start­ing with the right def­i­n­i­tion of “return” is crit­i­cal to demon­strat­ing suc­cess in the medium. So, when you’re next ques­tioned about social ROI, start by ask­ing, “What’s my ‘R’?”

  • Gin­ger­pop

    This is a direct, sim­ple and pow­er­ful answer to a key ques­tion posed by every poten­tial cus­tomer for Con­text Optional’s SAS Enter­prise Solution.

    One of the most vex­ing ele­ments of sell­ing this solu­tion into a com­pany is not estab­lish­ing rap­port, quan­ti­fy­ing the prospect’s needs, or any of the bench­marks required to close a deal. There is a rarely expressed, com­plex and oft ignored aspect of the equa­tion. Insur­ing that the mes­sage (as to what the solu­tion pro­vides) can be com­mu­ni­cated and evan­ge­lized for by the per­son who has made the deci­sion to uti­lize it.

    Senior exec­u­tives tend to have a short atten­tion span. They require infor­ma­tion pre­sented to them in eas­ily digested bytes, exec­u­tive sum­maries and the like. The chal­lenge is avoid­ing the use of lingo and ver­nac­u­lar which inside a cor­po­ra­tion is required to indi­cate one’s cul­tural affin­ity. Thus, the spe­cific terms used to com­mu­ni­cate in one set­ting lose their power in another.

    The chal­lenge for a suc­cess­ful Busi­ness Devel­o­ment per­son is to be cer­tain that the prospect not only agrees that the solu­tion offered is desir­able, but that he is able to com­mu­ni­cate its fea­tures and ben­e­fits in another setting.

    The sim­ple answer would appear to be a con­cisely crafted one sheet which can be used to define and express the solu­tion. Cre­at­ing such a one sheet and hav­ing it used as an effec­tive tool is more com­plex than it would appear at first glance. No mat­ter what is writ­ten on the piece of paper or in an email, many senior staff will not read it.

    A few years ago a valu­able piece of infor­ma­tion was shared with me by a col­league try­ing to help resolve an intra-office con­flict. My co-worker told me that roughly 10% of con­ver­sa­tions are recalled accu­rately. The fig­ures for writ­ten com­mu­ni­ca­tion are so small that know­ing them might pre­vent any of us from choos­ing the writ­ten word again.

    Such is the dilemma. Per­son­ally I find short (1 minute max) You-Tube videos to be the pre­ferred method to solve this predica­ment. I write this in the hope that some­one, some­where will read it in the course of try­ing to bring an inno­va­tion to mar­ket. If we remind our­selves that the lan­guage we use to com­mu­ni­cate can become a bar­rier to com­mu­ni­ca­tion, we will col­lec­tively save our­selves much frus­tra­tion. The sale itself is absolutely not the end of the story.