As part of the One on One conversation series I do over at SmallBizTrends.com, I recently talked with Cory Hartlen, a product marketing manager with Radian6. During our discussion Cory mentioned quite a number of things that hit on the topic of social media ROI.
As part of the One on One conversation series I do over at SmallBizTrends.com, I recently talked with Cory Hartlen, a product marketing manager with Radian6. During our discussion Cory mentioned quite a number of things that hit on the topic of social media ROI.
One story that really caught my attention was around how some of their clients were using listening tools from an HR perspective. By listening for mentions of people that have graduated with their MBA, or are looking forward to graduating with their MBA, a few of their clients had success in finding potential candidates for their junior executive training programs. So instead of having to rely on more traditional avenues for recruitment from headhunters, they were able to use social listening to help reduce some of those costs.
From a more traditional angle, Cory said Radian6 themselves listen to social conversations so when people reach out to their social networks and ask for advice, they can lend a hand and share a link to our review of monitoring systems. Then those conversations are very measurable because they can figure out how many leads they are getting from the social space over a given time period and get those input into their system. Then they actually see how many of those leads they are able to close on over a given time period to get their ROI from a program like that.
One last point Cory made is that he believes when it comes to social media ROI it all comes down to goals and strategy. And this seems to be backed up by the results of CRM Essentials/SMB Group Social Business Study performed last year.
Our survey of 750 executives at small and mid-size companies found that companies who characterized their approach to social media as strategic seemed to find more success with it than those who felt their organizations were more informal with its use. In fact, people working at strategically social companies were twelve times more likely to predict an increase of twenty percent in 2011 revenues over the previous year, compared to more informal social media users. And employees who said their companies did not use social media were twice as likely to expect a decrease in 2011 revenues compared to strategic users.
Below are a few differences in approach to social between strategic vs. informal users:
- Strategic users 2.5X more likely to have Sales involved than Informal users
- Strategic users 2.5X more likely to have HR involved than Informal users
- Strategic users almost 3X more likely to use social media for product development than Informal users
- Strategic users 2X more likely to use social media for research than Informal users
- Strategic users 2X more likely to use social media for internal collaboration than Informal users
- Strategic users 2X more likely to have integrated CRM with social than Informal users
- Social media was 2X more likely to be selected as top activity for improving customer service by Strategic users than Informal users
And along with the differences in how strategic organizations leveraged social media throughout the organization, they also kept track of KPIs differently:
- Strategic users 5X more likely to measure customer retention metrics than Informal users
- 3X more likely to measure sales conversion rate from online community
- 2.5X more likely to measure number of followers on social networks
- 2X more likely to measure net promoter score
- 3X more likely to measure share of conversation
- 1.8X more likely to measure new ideas generated
When asked about the ROI of social media, Cory says you could very easily ask what the ROI of his telephone is. Without a goal and a measurable strategy, you pretty much are left in the dark. But if you decide to make three more sales this month, then you know you need to make X number of phone calls to be able to close that number of sales. So now you have a goal and a strategy which can be measured to prove how successful you were.
He thinks that social media is no different, and the numbers seem to back this up.
This post is part of the Social ROI Blog Carnival at Think Customers: the 1to1 Media blog. Visit the blog carnival post “Calculating the ROI of Social Media” to check out the full lists of posts from numerous well-known social media thought leaders.