A few days ago, I blogged about the B2B roundtable we had here at Weber Shandwick Minneapolis, “Social Media and ROI: Dare We Talk About It?” And we did!
In that post, I summarized the first half of our message to attendees, which was that it was not a big deal to ignore ROI in our trial social media efforts of the past year because a small Investment required only a small Return. Now that we want to get serious and scale this, you better believe we need to talk about measuring real business outcomes.
But how do we do this? A survey of our attendees showed most simply didn’t know where to start. Interestingly, Jim Estell blogs here that you can’t measure ROI for marketing at all, much less for social media, because it’s too complex. I’ll be the first to admit the proof of impact isn’t always definitive but if you’ve done the research to know your audience well, then this is certainly a do-able task in B2B because there is typically a defined purchase process where our efforts can have a clearer impact.
We have a measurement model for communications in general and it works for social media too. (In other words, if you can measure business outcomes impact for any sort of marketing communications effort, you can certainly do it for social media. ) It’s called ARROW (see our little graphic).
A = Activities. These are the things we generate. In social media land, that includes blog posts, tweets, YouTube videos or simply the number of web properties we are maintaining. They get at a measurement of effort. On their own, however, they are meaningless.
R1 = Reach. Essentially number of eyeballs of our target audience we are reaching. We may measure this by Twitter followers or Facebook “friends” or blog page views. Important, but are we changing how our target audiences thinks or behaves?
R2 = Relevance. We sometimes use the word Resonance too. We want to measure that a message got through to our audience and that it connected with them. Relevance measurements can include key messages in third-party blog posts or tweets, number of retweets, blog comments, increases in site traffic or click throughs on a corporate blog to resources on your web site. Still not a business outcome.
O = Outcomes. Ideally, this is when our audience enters the sales pipeline in some way by requesting information or registering on your web site (i.e. becomes a lead) or when you sell more stuff, or when the quality of your leads improve or when your sales cycle shortens.
W = Any of the measures above divided by cost.
Ultimately, the goal is to find a corrolation between reach/relevance measurements and business outcome measurements. We are looking at evidence that the reach and relevance measures are in fact creating a better environment in which to sell. Don’t stop at measuring ARR!
If, despite a significant investment in marketing communications or social media efforts, no corrolation can be found, then you are right to question whether your dollars are being put to good use. What we’re looking for in choosing our reach and relevance measurements is whether or not they are precursors to ROI. How do you know? Well, you can take the trial and error route to see if there are any corrolations, or better, you can conduct some good audience research before launching a major social media campaign to define what I’m calling the Awareness-to-Advocate Process Path, the average compositive path a prospect takes from awareness of the product category or your brand to being an advocate for your brand. That research significantly helps mitigate your risk of making a big investment in a program that delivers no return. You still must measure the result to determine the strength of the impact. More on that in another post!