ROI Architect: Measure Social Media Marketing’s Return on Investment

WARNING: DO NOT watch the above video until you have read the following article:

Inner Architect’s focus is Social Direct Marketing based on the integration of social media channels with direct marketing strategies. We focus on producing positive measurable results for our  wine industry clients. Do you know how to hire a consultant?

You are your winery’s GM, COO, Marketing Director, or Direct to Consumer Manager and you are in charge of creating, executing, and maintaining a social media marketing plan with Twitter as your centerpiece. You understand the following challenges in executing this task:

  • Time: you do not have the time to execute and maintain your winery’s social media marketing plan
  • Expertise: you do not have the expertise nor the background to leverage Twitter, Facebook, blogs, Foursquare, etc.
  • Expense: you do not have the budget to hire, train, and pay benefits to a new employee to execute your marketing plan

What Are You Getting From Your Social Media Consultant?

What are you getting when you hire a social media consultant to run your company’s Twitter presence?

  • Goals: have you identified your goals for Twitter? Do you want to drive traffic to the tasting room, sell wine club memberships, network with wine journalists, broadcast events, develop new leads, or create offers?
  • Strategy: do you have a specific strategy that you want the consultant to execute?
  • Plan of Action: did you receive a written plan of action from your consultant on how they will achieve your desired goals?
  • ROI Measurement: Is your consultant explaining how he/she will measure their efforts on Twitter to provide a clear picture of the ROI for your investment in their services?
  • Progress Reports: Has your consultant set up a schedule of regular reports detailing their progress?

Are You Ready to Participate?

Are you ready to provide the critical cooperation and help to your consultant to ensure success? Are you ready to authorize:

  • Tasting Room: allow your consultant to brief tasting room staff on your Twitter action plan
  • Measurement: require your tasting room staff probe visitors to understand which channel provided the motivation for their visit ie. Twitter, Facebook, email, postal literature, telesales, catalog
  • Database Integration: are you ready to bring all your data points POS, eCommerce, telesales, email, Twitter, Facebook all together in order to create life-time value for your consumers in each marketing channel

Conclusion

If you are not receiving the service and planning from your consultant then it’s time to reevaluate your decision. Review and use this article as a check list for what you should expect from your marketing consultant and from your organization. And please watch the video.

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Are You Measuring Social Media Lifetime Sales ROI?

This is a guest post courtesy of Inner Architect CEO Susan Hanshaw:

LTV calc

In 1 Simple Ingredient for All Your ROI Needs, I discussed using a key code system to track the performance of individual social media efforts. While this practice is a great step towards tracking the sales performance of the social media channel, it is not enough if you truly want to learn how your social relationships are influencing sales in the long term.

What does it mean to measure impact on long term sales?

Think about it this way. Evaluating long term impact means there is going to be a starting point, a building up of history, and then a point where you measure what has happened since the starting point.

Starting point: Date of first sale

Building of history: Transactions made over a period of time

Measurement point: Recording cumulative sales that have occurred since the date of first sale

How do you apply this analysis to social media?

The goal here is to look at the buying history of the customers you have social relationships with versus those you don’t.  This requires that you:

  1. Identify which customers are Facebook fans and/or Twitter followers.
  2. Append this information to your customer database or marketing database for future reference.
  3. Segment your database into  groups based upon relationship.
  4. Further segment your groups into months or quarters based on first sale date.

In the example above, sales to Twitter followers is 14 points higher than average and 20 points higher than customers where there is no social relationship.  To fully load this analysis to get a total ROI, you would need to load in the costs associated with social media. I’ll save this discussion for a future post. Please leave a comment or email me if you have any questions in the meantime.

Entrepreneurs and Corporations Measure the Impact of Social Media

Today 105 major corporations, more adopting everyday, have corporate blogs that engage their audience, tell their story, deliver their value, and offer a place for insight. Entrepreneurs are at the forefront of this evolution. In addition, many of these corporations are adopting social media tools like Twitter and Facebook as tools to help create audience and “evangelists” for their products and services. The following are steps provided by Peter Kim on how to measure a social media campaign.

Peter Kim is one of the most important architects of social media and a well respected new thought practitioners. Peter is considered an expert in the art and science of “the intersection of social technology and marketing strategy.” He has been quoted by the most prestigious press organizations from the Wall Street Journal to CBS Evening News.

In Peter’s article “A framework for measuring social media” he outlines four concepts that provide the framework for social media measurement or ROI:

1. Attention: “The amount of traffic to your content for a given period of time.  Similar to the standard web metrics of site visits and page/video views.”

IA: Your readership can vary in many ways and although measuring number of readers and page views is quite telling, average time per visit is a major factor. Simply put how long a person stays on your site reading your content can be indicative to your content’s value in the eyes of your readers.

2. Participation: “The extent to which users engage with your content in a channel.  Think blog comments, Facebook wall posts, YouTube ratings, or widget interactions.”

IA: Key is a users willingness to engage with other users on your site. The comment section for each blog post has the potential to become their own mini “forums.” Within these forums your readers debate your content, collaborate, and communicate freely. One of the best examples of this is on ChrisBrogan.com another social media expert.

3. Authority: “Ala Technorati, the inbound links to your content – like trackbacks and inbound links to a blog post or sites linking to a YouTube video.”

IA: Although Technorati is the most well known inbound link measurement site, it is often not as accurate as Google. Peter is right on the money here with the fact that your trackbacks and inbound links are absolutely critical in measuring your content’s effectiveness in attracting readers.

4. Influence: “The size of the user base subscribed to your content.  For blogs, feed or email subscribers; followers on Twitter or Friendfeed; or fans of your Facebook page.”

IA: Attracting subscribers means you are producing excellent content. Yet in some cases, the subscription numbers can be “infected” by misleading subscription growth trends based on inaccurate numbers.

Realtor’s Guide to “Return On___”: Make A List And Measure Your Results

One of the most widely recognized business measurements is “ROI” aka “Return on Investment.” As defined by Forbes media company Investopedia “A performance measure used to evaluate the efficiency of an investment.”

When you consider your career and your social life you can use the “Return On” formula to measure your success, progress, and results for any aspect of your life.

Exercise for ROI

Write down a list of terms beginning with Return On__. Start and go through the alphabet in order creating a Return On__ for each letter. Imagine each word you use as a measurement for performance in your business or social life.

The gurus at valuebasedmanagement.net assert that “Net Income” our value for Net Results “is an unreliable corporate performance measuerment, the outcome of the formula for ROI must also be unreliable to determine success or corporate value.”

Although this is true we can still apply ROI measurement to our business and social lives if we determine the value of our personal “Net Results” the corporate world’s measurement for Net Income.

5 Factors That Determine The Degree To Which “Economic Value” aka our personal “Net Results” May Be Overstated by valuebasedmanagement.net

1. Length of project “life” Ex: Realtor’s time spent at open houses
2. Capitalization Policy Ex: Amount of time it takes to write a blog article
3. Rate at which Depreciation is taken Ex: Stale print ad messages as main lead generation tool
4. Time between investment outlays and recoupment of these outlays from incoming cash flow Ex: Time spent blogging before lead generation begins
5. Growth rate of new investment Ex:Time to launch and write a blog vs marketing exposure