Social media ROI: managing and measuring social media efforts in your organization.
By Olivier Blanchard
QUE/Pearson Education, 2011. 292 pp.
ROI (Return on investment) is a financial measurement. Social media are communications tools. You cannot measure a communication medium using financial measures.
But you can show it effectiveness.
Olivier Blanchard says social media managers must put on their detective hats. They must connect the dots between their company’s activities, the nonfinancial impact, and the eventual financial outcomes. “You can’t just piece sales and circumstantial data together and paint a convenient picture,” he says. “You have to both prove and attempt to disprove cause-and-effect and correlation.”
Olivier Blanchard manages BrandBuilder Marketing and the Red Chair group. He’s a brand strategist who blogs at the BrandBuilder blog.
Blanchard emphasizes that social media, in and of itself, will not improve your business or fix your problems. To get the most out of your social media investment, the program must be driven by specific business objectives. And his is the best book I’ve yet read that specifically connects business objectives with social media use and measurement.
Blanchard details how to tie a company’s initial investment in its social media program to a gain that can be eventually measured in terms of ROI. As an evangelist you can show that your social media program supports business objectives and actually helps drive business growth.
But he says he cringes whenever he hears people say their company has or sells a “social media strategy.” There is no such thing as a “social media strategy,” he insists. It’s a meaningless buzzword. What you do have, however, are business objectives and strategies to achieve these objectives. Start with those and incorporate social into them.
Define your company’s purpose first, he says. Then identify your business goals, then set specific targets. Only then can you see how social media fits in. You start developing your program from that point.
He emphasizes the following:
Every company is different. Start by thinking about what your company wants to measure.
Get buy-in from the entire organization. Simply getting the go-ahead from the CEO is not enough. You will need the cooperation of people in IT, HR, legal, web design, marketing, sales, and public relations.
When hiring for a specific social media role, a recruiting manager should evaluate candidates by looking NOT for broad social media experiences, but rather for a NARROW and relevant field of expertise as possible, for example, customer service.
Build your measurement practice on four cornerstones: monitoring, measurement, analysis, and reporting. They are four distinct disciplines, and together they connect the dots between observation, data collection, the development of insights, and the conversion of data into business intelligence.
A real strength of this book is its thoughtful discussion of what ROI is and isn’t. ROI is a business metric, not a media metric. ROI stands for “return on investment.” ROI can be calculated only after an investment has yielded a return. It cannot and must not be estimated beforehand.
The job of a social media manager is to validate a program’s effectiveness to an organization’s executive team. Reports should include data that shows how business objectives were met, or if they weren’t. For example: We shifted 20% of the customer service department’s tickets to Twitter. The net cost savings of this aspect of the program was $75,000, with no adverse effect to the quality of service.