Yesterday’s webinar with Dr. Natalie Petouhoff (@drnatalie) was a valuable hour of conversation on measuring ROI of social media. Dr. Natalie is not only UCLA’s Director and Professor of the Social Enterprise Executive Education courses, a consultant and analyst — she’s a compelling storyteller, too!
Weren’t able to attend? Here are a few tasty nuggets pulled from the full-meal-deal. The recording follows, so if you’re feeling mighty hungry for ROI measurement deliciousness, please dig in.
— Pauline Grant (@PaulineGrantTO) March 29, 2012
The Big Question
How do we justify the business case for listening and engaging on social media?
According to Dr. Natalie, if you’re developing or expanding a social media initiative, executives are going to ask this big question at some point. No doubt you’ll be asked by senior members of your company (if you haven’t been already), “Why are we doing this?” and, “What is the value?” If you’re not prepared to answer these questions effectively, read on.
Myth #1: There are too many unknowns to calculate social media ROI
Social business is still business. Are the social media folks on the front lines:
- Growing share of voice?
- Witnessing increases in customers making decisions based on reviews online?
- Seeing an increased positive sentiment as a result of promptly dealing with negative mentions as they occur?
- Finding an increase in customer advocacy?
If increased revenue and/or decreased costs are important, the above outcomes are only part of the equation.
Myth #2: Social media ROI does not have to be calculated
Businesses compare productivity benefits to costs for every decision, and that includes the systems needed to support the business activities. While some may think they’re clever in asking if you would calculate the ROI of placing phones on every desk in an office, Dr. Natalie reminded us that, although we don’t calculate ROI today for phones on every desk – it’s been done and proven.
So, let’s work together as a community to demonstrate the value of social media and prove its ROI.
— Arif Khan (@arifkhan7) March 29, 2012
Myth #3: ROI = Metrics
Don’t mistake social media data, metrics and KPI (key performance indicators) for ROI. Metrics are great as they measure important things such as shares and likes or reach and relevance, but they don’t spit out the magic dollar value that your executives crave.
“Think about metrics as ingredients in a recipe. They go into the calculation but they are not the finished dish.”
To hear more in depth about the measuring of ROI, how the calculations for ‘benefits’ and ‘costs’ are made, and to hear an awesome example of how SeaWorld calculated the ROI with the launch of a new coaster, tune in to the recording posted below. Those who dialed in were happy they did.
— Beth Stanford (@RojoRaven) March 29, 2012
Have a look and listen here, and be sure to leave questions you have in the comments section below. Stay tuned for a follow up post where Dr. Natalie answers your questions from the webinar.
Some skeptics believe that ROI can’t be calculated or tracked. They believe it’s just too… fluffy. Dr. Natalie believes that ROI is more than ‘we’ll still be in business in five years’ – what do you think? Tell us!