Before I wrap this Social Media ROI discussion together for you with a neat little bow, I have to give credit where credit is due: I didn’t come up with this stuff all on my own. I adapted this simple methodology over time to meet the needs of clients who needed real, actionable, simple metrics to determine whether or not their marketing activities were hitting the mark or not.
The real credit belongs to Microsoft for introducing me to these concepts back when I was working in the Distribution Channel. (Big shout-out to @robmoyer and Lisa Williams, by the way, without whom I would have never learned this stuff.)
Originally, F.R.Y. (Frequency/Reach/Yield) wasn’t meant to be applied to Social Media (or any media, for that matter). But as it turns out, it adapts super well to just about anything, so I kind of lucked out by being exposed to it in the first place. Pretty handy stuff, really, when you grasp just how portable it is.
Anyway, you guys have been very patient, so I won’t drag this out any longer. Here is the wrap-up of this week’s R.O.I. discussion with a basic overview of F.R.Y. (You’re going to love how easy this is):
So let’s recap:
Frequency Increasing sales revenue by shortening the interval between transactions.
Reach (breadth) Increasing sales revenue by increasing net new customer count.
Reach (Depth) Increasing sales revenue by helping customers buy deeper into the product line.
Yield Increasing sales revenue by driving customers to want to increase their average per transaction spending.
Getting comfortable with this effectively kills the argument that SM has no real ROI dead. As in: “Yeah? Well how about a mouthful of F.R.Y. there, Mr. social media skeptic?”
As in let’s move on and get back to work – at least those of us who know what we are doing.
Does any of this change the way you should engage with your customers? Not one bit. Does any of this make your engagement strategy any less honest, transparent or authentic? Absolutely not. All we are talking about here is giving skeptical (or even full-bore Social Media-agnostic) executives a real end-game ROI they can understand and get behind so you can get the okay to launch a kickass social media practice and blow everyone’s socks off. That’s it.
Oh… and make you accountable for results, which ought to weed out about 99% of so-called “social media experts” whose expertise in using Social Media is about on par with their expertise in eating sushi. (And just as valuable to their unfortunate clients.)
Aside from that last comment, the beauty of F.R.Y. is that it is simple, specific and highly adaptable. Social Media, PR, Advertising, Product releases, incentives campaigns… It plugs into everything. F.R.Y. is the ultimate app. for R.O.I. measurement. Once you understand how it works, you can apply it to just about anything.
One final note:
Do you know what’s really, really cool about this? You didn’t have to spend $400 to attend a Social Media e-seminar. You didn’t have to send a P.O. Box 3 payments of $39.99 plus S&H for a super top secret DVD filled with “Social Media Secrets the pros don’t want you to know”. You didn’t have to fly some overhyped blogger to your HQ to have them regurgitate some tired Social Media For Dummies presentation for a mere $15K per day. This stuff is WAY too basic to warrant that, and unlike many “consultants” jumping into Social Media these days, I wouldn’t feel right taking your money for sharing simple business advice without actually helping you implement it.
Yet, far too many companies get suckered into paying “social media gurus” substantial bank to essentially do little more than flap their mouths and state the obvious without ever delivering any actionable advice. Don’t become one of them. If all you want is a great motivational speaker, buy a set of Tony Robbins CDs. He’s good and you’ll get your money’s worth. But if you want to help your business – and I mean REALLY help your business – make sure you don’t fall into the Social Media “expert” trap: 99% of them are basically just motivational speakers with a Social Media theme. Find someone who knows how to a) measure real ROI and b) tie those metrics to engagement programs. Anything less than that is a waste of your time.
Thanks for hanging out this week. As always, feel free to comment or reach out to me. Have a great Memorial Day weekend. :)
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Twitter – @thebrandbuilder