Your social media ROI shock treatment
Jul 21st
Today, let’s do a very simple calculation to determine how much cash your social media strategy should be generating to justify its existence. I think this might just blow your mind.
I’ll have to make some broad assumptions because every company is different, but you can insert your own numbers and do the math for your own organization.
Let’s assume you are a medium-sized company, and have one person working full-time on social media marketing. We’ll assign that person a salary of $60,000.
In a typical company, health, 401(k) and other benefit costs equal another 50% of the base salary, or in this case, an additional $30,000.
We’ll assign another 20% of base salary for overhead such as office space, shared services support and technology. That’s $12,000. We’re on a tight budget so we will forbid our new employee to do any travel, training, or company entertaining. And forget about bonuses this year. No whining, either!
So, our full-up cost for one social media professional is $102,000.
Let’s assume your company has a moderate profit margin of 15%. So, to break even and just cover the incremental costs of your new social media initiative, this professional would have to produce quantifiable new sales of $680,000. In other words, you would have to make that amount of money to have an ROI of 0.0% on a year’s worth of social media expense and effort.
That’s a lot of money for a lot of nothing, isn’t it? There are two reasons why I needed to shock you into social media de-tox.
First, I wanted to bring home the point that social media is not “free.” Even a modest effort at a small company takes a lot of time, which must be funded through the sweat of your manufacturing and sales efforts.
The second reason is this: For now, some companies may be willing to experiment with social media, but at some point the big boss is going to sharpen her pencil. If you can’t accurately and logically measure what you do, your marketing initiative will be in peril, as it should be.
The other day, I heard an “A-List” blogger tell his audience, “If your company is not expecting you to account for your efforts with financial measures, well, that’s just great — do whatever you want!”
And for a short period of time, you might get away with it. But to gain credibility as a company leader in a B2B environment, you must hold your activities accountable to the same standards as an engineer trying to get funds approved for a new production facility. You should be able to demonstrate a business case and that business case must be built on hard dollars … eventually.
In the mean time, the softer side of metrics may be the only thing available. Tomorrow we’ll start taking a look at the importance of “non-financial indicators” that can influence brand equity.
This is part 2 in a series addressing social media marketing measurement issues.
Part 2: Social media ROI shock treatment
Part 3: Irresponsible social media measurement research
Part 4: Social media impact on brand equity
Part 5: The most important question to ask in social media marketing
Part 6: A double standard for social media marketing?
Part 7: Yes, it IS about the money!
Part 8: Creating a measurement plan
Part 9: Measurement is like a bartender
Developing a social media strategy when the rules aren’t clear
Jul 15th
M.C. EscherPart 1: Four breakthrough Twitter research insights
Part 2: Essential B2B social media start-up strategies
You’ve decided to lay bare the evolution of your social media campaign — warts and all. It’s a fascinating read. What made you decide to expose your strategy to the world?
It was a simple decision, really. Business.com is focused on helping people find actionable solutions to business challenges, and what better way to add to the “solution set” for B2B social media than to chronicle our own challenges, insights and solutions?
We also took this approach to accelerate our learning about the value of social media for business, and for our business in particular. If we blog about the evolution of our B2B online marketing Twitter account with updates every 30 days, will we get useful feedback from other business people using social media? What does it take to get a discussion going around a topic of interest that produces real, valuable answers?
You’re a company executive but take an extremely hands-on approach to your social media initiative through blog entries, tweets and presence on SM platforms. Is this typical of your style, a new demand of social media, or something you just do for fun?
It’s a combination of the three, united by the requirements of the situation. In my experience, the fastest way to develop effective marketing strategy and tactics for a new channel where the rules are still being written (as is the case for B2B social media!) is through a combination of the following, which form a nice acronym – REAP:
Research – Collect as much of the current “best practice” info as possible and triangulate findings, in the context of your unique business and business goals, to establish an initial position on where to focus and what to do. At Business.com, we started with an overview of the current state of B2B social media.
Tomorrow, Part 4: Executive tips for managing the social media time commitment
Essential B2B social media start-up strategies
Jul 14th
Click here for Part 1: Twitter for business: Four breakthrough insights
Ben, your company evidently took a very well-thought-out and measured approach to embarking on a social media campaign. But even the best plans usually go awry. What have been some key lessons you can pass on to somebody starting their own B2B social media initiative?
Whether we’re talking about eCommerce, online communities, display advertising, search marketing, blogging, micro-blogging, social networks or other channels, most B2B marketers shoot themselves in the foot the first time they use it for a couple related reasons.
Second, focus on the campaign over future scalability. OK, so you put your best people together for six months and ran a successful campaign, but did you learn what you needed to get 3-5x the return next time?
Third, even with the best talent and creative, there are simply too many variables that will interact in unexpected ways during an initial campaign in a new online channel to expect a home run.
Here are a couple key things we picked up in our learning phase:
Start with listening broadly, and then join the conversation – It’s critical to get a feel for the ebb and flow of online conversations around your brand or other brands in your industry, and to do so by observing, not just online thought leaders but also the comments, tweets, posts, etc. of the occasional, peripheral social media participant.
Focus is absolutely essential – In B2B social media, with lots of hype, a broad range of tactics, and no clear best practices playbook, it’s very easy to take on more than your team can handle. We chose to focus initially on blogging, both with our own blogs and micro-blogging via Twitter. Even managing these initiatives well seems like twice the work we expected. Have a great idea for an integrated social media campaign across a new company blog, Facebook group, Twitter account and YouTube? Table that until you establish a firm presence in each.
No one is a social media expert today when it comes to your business – This is a bit of an overstatement to make a point: don’t expect that anyone has the recipe for a successful social media campaign for your company right away. B2B social media is too new, the platforms and users are evolving too quickly, and there is too little objective data available for anyone to say “If you do A, B and C in this social media campaign, you will generate $X in new business.” The apparently hard-and-fast rules in this domain are constantly being written and re-written so the best approach is to learn what you can from the pros and try things in a variety of ways.
For example, we have two Twitter accounts (see graphic above) that we approached differently: @whatworks for general business and @B2BOnlineMarketing for B2B online marketing topics. With @whatworks, we’ve been much more interactive with the Twitter community (more replies and direct messages), followed and retweeted more of the twitterati, did more “what’s happening now” type of posts like live tweeting events and just generally followed more of the standard rules for building a Twitter following.
Social media imperatives for small businesses
Jul 1st
Full Business Week radio interview
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-Mark SchaeferFollow Mark
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