Recently, I trekked out to San Francisco’s edition of the Corporate Social Media Summit in search of the answer to the one question that our potential clients are asking: What is the ROI of social?
Luckily, I was not disappointed. My findings were perhaps not scientific but satisfying nonetheless. This conference brought together the thought leaders and heads of social for the world’s biggest brands from American Airlines to Clorox to Qualcomm. A plethora of topics were covered. Most were moderated by the charming Rohit Bhargava who was kind enough to summarize the top 10 takeaways which are described nicely on his blog http://www.rohitbhargava.com/blog
There were also some pretty good one liners.
“Asking what’s your twitter strategy is, is like asking a restaurant what their fried chicken strategy is”
I still don’t know what it means but it made me giggle.
I was pleased when KLM’s Manager of Social Media Karlijn Vogel-Meijer, presented their view on social and how they measure ROI every day. The mantra for KLM on social is “we are a guest at someone else’s party” so act accordingly. They had by far the most developed use of social and showing real ROI in terms of generating significantly increased sales through social, mostly with well executed FB contests. They have run contests to fill flights and have allowed customers to reduce the price of their own ticket by referring other FB friends. The results are truly impressive and go right to the bottom line. It is noteworthy that Social at KLM does not reside in the marketing department but rather reports to E-Commerce with real revenue targets. Customers are even switching from E-commerce to S-commerce and booking flights right on their FB page – no wonder they earned the top 10 socially devoted brand title two years in a row !
How did KLM cultivate the ubiquitous use of social throughout their organization? In 2010 when the Icelandic volcano created a huge ash cloud over Europe, plane travel was halted for five days. Customers were stranded and calling, emailing and waiting in lines at airports for flight info. Desperate to connect with the airline they started tweeting and facebooking to find out if they would miss their own wedding, make it to a funeral or miss an important meeting. A volunteer group of head office staff worked 4 days and 4 nights to respond on social media. Shortly thereafter social media customer care became institutionalized.
Jen McClure, Senior Director, Social Strategy at Thompson Reuters has also successfully proven a Return on Investment through social, particularly with lead generation on LinkedIn, to sell more accounting and tax software. It has helped to shorten sales cycles, close deals and improve prospecting. But in general, she says that organizations are asking the wrong questions and that they shouldn’t get caught up in measuring social media efforts on their own; when it comes to social media, it’s the effort of the business initiative that matters. This value may be expressed in any number of ways including a comparative cost savings, shortened sales cycle, increased customer retention or renewals, to name a few. Value is contingent on strategy.
This reminds me of back when I used to teach a course at IBM called ROWI (Return on Web Investment). The only difference from regular ROI calculations were some new metrics like number of eyeballs, number of hits (remember those?) and now we could say that social ROI or ROSI includes other KPIs such as influence, Klout, reach, sentiment etc. It hasn’t really changed. Someone mentioned at the conference that they couldn’t wait until we drop the word social from our vernacular. It’s another channel with loads of data, just like the web was another channel 15 years ago.
I find it interesting that the two that really brought forward examples of measurable ROI were organizations where social was not part of marketing. KLM social reports to ecommerce and at Thomson Reuters it falls under Human Resources. Social equals People, makes sense to me.
Social ROI should show quantitative metrics that show progress in moving people through a relationship pipeline. However that is defined.
As social becomes baked into job processes, workflows and even performance reviews, Nexalogy’s API called NxAPI allows your organization to build customized social analytics apps on our technology. Let us take care of the heavy lifting and you help you concentrate on building impactful applications for your organization, that will boost your social media ROI.