Twitter success stories: Explaining the ROI of Twitter

Measurement and ROI are constant themes in the social media world.  How do you PROVE the value of Twitter?  Like most questions in business, the answer is, “it depends,”  but I’d like to offer a couple practical ideas that might help you when this inevitably comes up at your company.

First, let’s establish a crucial point. There are MANY benefits to Twitter besides direct sales.  You might gain information, competitive intelligence, insight,  a new supplier or partner, publicity, brand awareness, an idea, customer insights, and yes, even a potential customer.  And while all of these are great, most are intangible and difficult to display in an Excel spreadsheet!  So why keep trying to do it?

As a small business owner, I don’t find it necessary to formally calculate the ROI (even though it may be possible) because the value I am receiving is instinctive and self-regulating. I have precious little time, so I better get something big out of Twitter if I am going to devote time to it.  Like any investment in time or money, if I don’t realize a benefit, I will pull back.

It gets more difficult for a larger business that is conditioned to run on data and not the entrepreneurial instinct of doing something because you KNOW it works or because it “rocks.”  That simply doesn’t fly in a board room.  And yet spending time and money trying to quantify some of the intangible business benefits can be a complete waste of time.

So how do you break the ice?  When benefits are difficult to quantify, the best way to explain the value is through a story.

For most experienced business people, hearing a compelling story of Twitter success can be just as effective as a pie chart. Once somebody understands how the networking works and the RANGE of business benefits that exist beyond money, it’s easy to make the decision to give it a chance.  And once they try it, they’re usually hooked!

At least that’s the way it has worked for me. Why keep fretting over measuring something that can’t be easily measured?  Just show them.

Another useful tactic is the pilot program. People get nervous about commitment.  Just tell your boss you want to test it for six months. Then week by week, pass along the stories as the tangible and intangible benefits accrue. Or, perhaps they won’t.  Then you can kill the thing gracefully and still get a good performance review.

I’m a data and measurement junkie. But I can also see many companies stumbling around trying to calculate their return on investment while their competitors are establishing a social media foothold.

Balance.  Common sense.  Qualitative measures like stories. Try new approaches to measuring value if traditional methods are difficult.

Would this work in your organization?

If you’re interested in learning more about qualitative measurement, these articles will be helpful to you:

Social media measurement: sometimes a picture is worth a thousand tweets

Three reasons why the experts are wrong about social media measurement

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  • Mark –
    Interesting take. Social media in general is not an exact measurement science and won’t really be until the networks give accurate numbers.

    You bring up a great point as a small business owner. Success is what you make of it. One way to help put a tangible value to your efforts is to set goals. Do you want more site traffic, increased search engine ranking or more leads.

    If you place a value on that, you can transition into a value per tweet. For example if it is sales, use a specific URL or coupon code and divide that by social interactions to determine the value.

    With a larger company, you need to show a value to get buy in. Things need to move the needle and a nicely painted picture won’t always work.

  • Mark

    @Jeff — This is a very valuable point. It all starts with your goals and strategy doesn’t it? If you don;t have a strategy, you’re going to be very frustrated using social media or any communication channel!

    I also agree about the need for data in larger companies. I’ve been there and it just is what it is. Still, with some managers I have had success with the qualitative approach too. If you click on the first link at the end of the article there is an example of that. Thanks for this excellent comment!

  • Mark,
    The issue of ROI will always be a prime concern for social marketers who have larger companies as clients. I am a former Director of Finance and VP of Marketing & Strategy at a billion dollar company. My experience there showed that if I needed resources, I would have to show a tangible, measurable ROI…particularly with something that was “unproven” or didn’t have initial buy-in from the top.

    I have a client now that has struggled with the issue. Just as you suggested, my proposal includes a six month trial before we reevaluate and decide the direction of the program. The budget request is being presented this week. Hopefully the CEO “gets it”.

    @Jeff – I like your thought…but as a former “metrics monitor”, a return per tweet would be easy to manipulate. Not getting the return? Tweet list to drive up the ratio. There’s a qualitative aspect to it too. How good are your tweets? But still…I really do like the idea. As an agency focused on social media, we’re going to HAVE to devise some sort of metrics that are effective.

    Thanks for the discussion guys!

  • It’s extremely hard to persuade managers to go for Twitter when there isn’t a clear way to measure ROI. My own approach is to go for a period of time and to then look at the results. Trouble is, if a company doesn’t have the competence in-house to cope, the whole campaign will fail.

    My recommendation to any larger business owners reading this would be to outsource your social media marketing for a period of time and then, if results are good, hire an in-house position, once you’re more familiar with the channel.

    It’s going to be a leap of faith until we have the tools to get really valuable data.

  • Mark W Schaefer

    Great points guys. I think we are hitting on some of the biggest obstacles here. I think the cultural issue or as Jon puts it, “getting it” is key. Something I learned from Jon in one of his great posts was the importance of having the right social media mindset. I have adopted this now as one of the very first things I teach in my classes. You just have to think about things differently and that can create a competitive advantage in the end. Thanks for the superb comments!

  • Interesting post and comments.

    I often find myself discussing the exact same things with both managers and peers, and somehow I can’t help but think that must be an echo of the same discussions when TV commercials came out. It must have been a similar leap of faith as we are facing today.

    I’m sure that people were talking about how TV was going to transform the world and that “it rocked” (or what it was called in those days) but if they had been asked for the same ROI calculations they would have struggled too.

    …and now some 50 years later we CAN calculate the ROI of TV. Let’s hope that we get there a bit sooner when it comes to Social Media ROI!

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  • Mark

    @Martin — Of course there ARE ways to calculate ROI and some very good ways in fact. We have so much data flying at us that we can measure about anything. But Part of what I was trying to say was that companies should not overlook all of the other benefits, too. I think we are kindred spirits in that I sometimes think about how it must have been in other eras … or better yet, what would some of those pioneers say about the technology we have today? How I wish I could read a social media perspective by Peter Drucker right now! Thanks so much for your great comment Martin!

  • Really great article Mark… This is a question that will be asked until metrics and data can be pulled and shown on a spreadsheet… I love Ritch’s approach of proposing a 6 month trial period… I think having a digital footprint has some value over haven’t none at all!!


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  • Hi Mark. A great article and excellent point about about trialing and piloting for a set period, like 6 months. Marketing should be treated like a science where we should be able to craft hypotheses and test them and then go in and look at the changing situations and deliver explanations (WHY) that are anchored in measurement (WHAT). In this way, we can continue to adapt, optimize, and improve our achievement and even our objectives.

  • Mark W. Schaefer

    @RM — Thanks for the insight!

    @Taariq — Good to hear from you. Agree with this approach.

  • @Mark. It’s good to be back! I’ve missed your blog posts and I am enjoying re-reading them.

  • Another great read Mark. Keep it simple, try new idea’s, and be flexible and open minded. Don’t focus on the numbers alone when there are intangible benefits that are far more valuable. I like the term ROE better, because return on engagement is a big benefit that can’t be quantified sometimes, yet the impact of engaging with customers is unquestionably valuable. I keep learning and changing my perspective. Thank you for sharing your insight!


  • Mark

    Thanks Reza!

  • Mark

    Thanks Reza!

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