As valuable as it may be to peel back the layers of a poorly put-together list of social business ROI examples, let’s now talk about how to do it right. Below is a quick 5-step guide in case you ever want to publish your own report or list of social business ROI examples:
1. Do your research.
This means talking directly with the company or agency involved with the campaign or program, not just bookmarking Mashable articles and collecting a few white papers. Actually talk with the program or campaign lead. Have a discussion about what worked and what didn’t, what was done and why, etc. Obtain financial data, not just digital and marketing metrics. Without this data, you will not be able to add this campaign or program to your list.
2. Know the difference between writing a list of social business case studies and a list of social business ROI examples.
– Case studies may focus on a breadth of criteria for success or failure. Some may focus on the impact a campaign had on consumer perceptions while others may focus on customer acquisition or nipping a PR crisis or any number of things.
Case studies can focus on ROI but they don’t have to.
Case studies tend to be written in sections: Objective/problem to solve, theory, strategy/plan, tactics/execution, what happened, what we learned. The formula isn’t rigid but for a case study to be written properly, it has to actually study a case, hence the name. It has to have a beginning, a middle and an end. It has to show the connection between intent and outcomes.
Case studies can’t only be about what worked. They also have to be about what didn’t work. There’s value to that as well. Report on both.
– A list of social business ROI examples focuses on just one thing: Listing social business programs or activities with quantifiable ROI.
There are three parts to a social business ROI report: An explanation of the activity’s purpose and nature, the cost of that activity, and the ultimate financial benefit to the company.
The focus here is much more specific than that of a case study.
3. Format your reporting properly.
Here is an example of how not to format an example of social business ROI:
Electronic Arts. EA was 2nd UK brand to use promoted tweets and trends to promote FIFA 12 video game. Trend engagement level was 11%, well above Twitter’s average ‘benchmark’ for trends, of 3% to 6%. Promoted tweet engagement averaged 8.3% over two-week campaign vs. Twitter benchmark of 1.5%. (Marketing Magazine, 2011) Source: Peter Kim.
Note that in spite of the short formatting the above example does not include any ROI data whatsoever. It focuses instead on trend engagement levels and promoted tweet engagement. This not what you want your ROI reporting to look like.
Here is an example of how to properly format an example of social business ROI:
Joe’s Pie Factory. JPF wanted to increase QoQ sales of carrot cakes by 25% by the end of Q4-2011. Leveraging its Facebook page, Twitter account, Youtube channel and blog, JPF launched an awareness campaign for its carrot cakes at the start of Q4-2011. Total cost of campaign: $27,391 (for video production and content & community management). Outcome: A 23% boost in QoQ sales resulting in $59,782 in net new revenue. (Add link to case study in case readers want to learn more.)
Note that this example focuses on campaign objectives and includes both cost and net revenue data for the activity. These are the three ingredients needed to properly qualify an example for a social business ROI list or report. (See item 4.)
You could stop there or you could do the math for your readers:
Joe’s Pie Factory. JPF wanted to increase QoQ sales of carrot cakes by 25% by the end of Q4-2011. Leveraging its Facebook page, Twitter account, Youtube channel and blog, JPF launched an awareness campaign for its carrot cakes at the start of Q4-2011. Total cost of campaign: $27,391 (for video production and content & community management). Outcome: A 23% boost in QoQ sales resulting in $59,782 in net new revenue. ROI of campaign: 118%. (Add link to case study in case readers want to learn more.)
4. Make sure that all of your social business ROI examples always contain these four pieces of information:
- A brief synopsis of the campaign or program.
- The cost of that program.
- The financial outcome of that program.
- A link to the case study / your source for the ROI data.
Anything other than those three pieces of information is unnecessary. Remember that you are writing a list of social business ROI examples and not a list of social business case studies.
Failure to include all four of these pieces of information will result in incomplete reporting.
5. Make sure that your documentation is in order.
Do not rely on anecdotal information to compile your list or report. Ever.
This means: do not assume that because a social business program was in place during a period of lift in sales revenue, the social media program was the cause of that lift. Don’t assume that if a digital marketing manager tells you that he knows customers responded positively to a campaign, they actually did. In fact, don’t assume anything. Back up every hypothesis and assertion with data. Disprove alternative cause-and-effect relationships where they may exist. Make sure you aren’t being sold a big fat lie.
If you cannot prove that a company’s social business program or campaign resulted in positive ROI, do not include that program or campaign in your list or report. Period.
Just to be sure, always document the source of your data so the rest of us can check it for potential errors or foul play.
Three more tips:
Don’t worry about gimmicks. If your list only gets to 23 examples, then that’s fine. Don’t try to stretch it to 25 or 75 or 101 just to have a catchy number that will score good SEO. Just stick to the facts. Everyone would much rather have 23 solid examples of social business ROI than 101 bad ones. Substance before flash. Always.
If you don’t understand how ROI and social business fit, you might not be the best person to compile and publish reports on the subject. If that’s the case, don’t feel bad. Life goes on. Publish stuff you actually understand for now. Someday, when the ROI thing isn’t such a mystery anymore, you can come back to it and give it another shot. Until then, just do yourself (and all of us a favor) and do your homework. Come prepared. Lead with what you know.
If you want to get better at this though, here is a primer on how to calculate ROI in 4 easy steps:
What you’ll need:
- Campaign cost data and financial outcome data.
- The ROI equation.
Here is the ROI equation in its most user-friendly format:
ROI = [(Financial outcome of program – Cost of program) ÷ Cost of program] x 100
Step 1: Calculate the financial outcome of the program – the cost of program.
Step 2: Divide that number by the cost of the program/campaign.
Step 3: Multiply that number by 100.
Step 4: Add a % at the end.
That’s it. So simple an 8-year-old at a lemonade stand can do it.
Now go forth and be a force for good and credible business reporting in the world.
Cheers,
Olivier
* * *
In case you haven’t yet, you might want to pick up a copy of #smROI. 300 pages worth of stuff like this in there. A full pound of knowledge.
And if your favorite social business “expert” doesn’t seem to get this stuff yet, don’t feel bad about sending them a copy. Knowledge is never a bad gift.
CEO-Read – Amazon.com – www.smroi.net – Barnes & Noble – Que
Amen.
And to think some gurus charge $12,000 per hour and don’t even get it right… and here I am explaining this for free. Weird how that works out. 😉
Nice post. Could just as easily have been titled: “How to do actual, valid research on any topic.”
No kidding.
How did I know this was coming. Bravo and thank you for setting the record straight.
Too many people in the social space understand social media, that’s it. Solid business acumen should always trump social media expertise. Unfortunately, we still reside in a land of unicorns and leprechauns. We have magic math that calculates BS numbers. And everybody believes it because its just Smurfy.
We’re getting to the point now though where more business people are going to want more substance, less style. They’re going to start asking for bottom line increases, not increases on their fluff meter. I am hopeful that as this shift happens, much of the crap is weeded out and there is enough room for the cream to rise to the top.
When you get to the top Olivier, send me a wave. You’ll know I was expecting you to get there.
Hoping I get there soon so I can bring guys like you up with me.
Whatchoo doin, Willis? My whole social media guru thang today is going to have to be dedicated to spreading your gospel. I can’t be spending all of my precious, precious Jedi time talking about how awesome and smart you are. It distracts from, well, me.
Well, damage done. Fine didley fine fine.
One needn’t read beyond point one – doing research – to understand why this is classifiable as awesomesauce. Research is not just for scary people who have been locked in the library basement for too long. Marketers need to do research too, and judging by the state of things – a lot of it.
As for the lemonade stand theory, I always drank most of the lemonade I was trying to sell, so the example does not help me. Hopefully other people benefit from it, however.
You are a good person for making this info available free of charge. I’d have been tempted to charge for it as it’s evergreen, little-known (it seems), and utilitarian for all sorts of people in all sorts of fields.
If I were a rich person I’d buy everyone I know a copy of your book. Not quite there yet, but it’s good to have goals. I’ll keep you posted.
1. Never use your own product. A drug dealer told me that once. That goes for lemonade dealers, bike shop owners, ice cream vendors, etc.
2. I make this stuff free because it is basic as basic can be. You can Google ROI for free. This post is basically that with more words. So I am really not giving any major secrets away. The hard part isn’t actually the ROI calculation. It’s arriving at the cost data, the revenue data, and properly extracting the social media portion from the traditional marketing portion.
And you know what? Even if I spent a week posting an A-Z guide on how to do that, with videos and charts and every possible visual aid I could think of, most people in social media still wouldn’t be able to do what I do. Not because I’m particularly smart or experienced but because I am fluent in it and have been for a very long time.
It’s kind of like giving French lessons for free: Most people will never be fluent in French no matter how many free lessons I give them. So I gladly share everything I know because a) I am not worried that someone will steal any of it and b) whatever makes everyone even incrementally smarter about this stuff ultimately helps people like me get rid of the posers and charlatans that give social business consulting a bad name. The more I give away for free, the healthier the landscape for me to play in. 😉
3. If I were a rich person, I would a surfer and a globe-trotter. Or a globe-trotting surfer, even.
Clearly, this is fodder for part three of this series.
The Failings of ROI When You Use Your Own Product
-or-
Confessions of a Drug Dealer/ROI Expert
I like the second one better now that I think about it. But it might get you in trouble.
Truthfully, if I were a rich person I’d probably do a few things before buying everyone your book. Well, I dunno. Maybe I’d do that first cuz it’s like, in writing here. Also, i’d like to get a pet dog.
Yes, “Aim high” is my life’s motto.
It’s why I’ll never read my own books. Too dangerous.
I have to step in here and ad my 2 cents. I was actually a drug dealer in my teens, after being a bootlegger. True story. I used much of my own product and that landed me in jail, the hospital, and rehab. Just confirming your drug dealer friend’s theory. Carry on.
Olivier, thanks for this. I had emailed you earlier today to pick your brains on something ROI related but I see I had missed off the X100 part of the equation. Many thanks.
ps – could you tell me why there is a X100 multiplier though?
If you don’t add the x100, you end up with a fraction at the end of your ROI calculation, like, say… 3.03. Some people don’t know what to do with that. But when you multiply that by 100, you get 303.
As in 303%.
All the x100 does is make the number easier to convey in terms of ROI reporting. Like I said, it’s optional. I usually don’t include it in the equation but when dealing with beginners, it helps to throw it in there to make them feel more at ease.
I think this article should be sent to all the business managers and owners who are hiring so called “SM Experts”. If they understood the business math, maybe they would think twice about hiring those who clearly do not.
Vickie, that’s a great idea. Feel free to share the link with everyone who needs it. 😉
So the next question Sir Olivier is:
How do you get a company willing to share all that data so you can write proper case studies 😉
4 options:
1. You tell them it’s for the greater good.
2. You tell them that it will make for great PR since so few companies actually have demonstrated measurable success in this area.
3. They already want to share the info.
4. You can’t.
Gotta love your tenacity.
Great post but I notice that you didn’t use a live example. In fact, I just rechecked your book and couldn’t find any live examples there either (happy to corrected on this). Perhaps the bloggers using non-financial metrics as proxies for ROI are just doing the best they can. I invite you to do better.
The book brings up Dell as one of several example to look into, but you’re right: I don’t share any company’s ROI data in the book.
I had no interest in listing live R.O.I. examples in the book and I explain why:
1. Examples become dated fast. I didn’t want the book to be outdated in 12 months.
2. When I wrote the book, very few companies had ROI data about their SM activity. Even fewer were willing to publish it.
3. I was interested in showing people how to create their own success stories (ROI-related or not), not focus on trying to copy someone else’s. Ford doesn’t need to copy GM and vice versa. Apple doesn’t need to copy Microsoft. Better to share a framework of activity and success than waste chapters pointing people to examples so limited in scope that they won’t apply to them. I had to cut out 2 chapters as it is.
There’s also a 4th reason, and it deals with non-disclosure. I don’t want present or future clients to wonder if I will share confidential information about their financials. If I remove myself from the business of presenting ROI case studies, the question doesn’t even come up. I like that. So do the companies who hire me. That might change someday, but when the book was published last year, that’s what the decision needed to be.
Cheers, Peter.
Olivier,
Voilà *le* texte à partager avec les collègues et les clients. Mais pas avec les compétiteurs 😉
MS
Thanks so much for this advice Oliver. Practical and straightforward, unlike so much for the discussion about social media.
I just like the helpful information you provide in your articles.
I will bookmark your blog and test again here regularly.
I am quite sure I will be told a lot of new stuff proper here!
Good luck for the following!