Social Media ROI: The Yin & Yang Prospective

Posted on 20. Jan, 2010 by in Blog

Social Media ROI is something Karen O’Brien of Crimson Consulting Group has obviously spent time researching and blogging about.  After reviewing Karen’s Blog and the archives it’s apparent she has a knack for outlining the process of executing a Social Media marketing campaign (see Karen’s White Paper).

In Phizz’s previous post, Social Media ROI:  What to Measure, the discussion revolved around measuring ROI using traditional methodology (i.e. CPI/CPM, CTR, CTC vs PPC & CPA).  These formulas numerically define benefit (if any) a business receives in terms of overall branding and ultimately can be linked to monetary value.  This is extremely important to any business with a desire to focus their marketing budget on activities which reap monetary reward.

In the following text Phizz will help define analysis as it relates to Monetary ROI and Relationship ROI…

Social Media isn’t just about Monetary ROI, it’s about Relationship ROI as Jill Foster explains so well in The Gabby Geek and Replacing ROI’s Old Monetary Vision.  Phizz believes both are important to businesses because in a traditional sense all businesses run on relationships owned/managed as well as the cost to grow and nourish these relationships.  Monetary ROI and Relationship ROI are the Yin & Yang of Social Media.  The basic principle of Yin & Yang according to Taoist philosophy is that Yin & Yang exist as opposite equals; basically a harmony or balance between completely opposite forces are a requirement for existence.

It’s useful to apply this thought process to your Social Media analysis when it comes to Monetary ROI and Relationship ROI because both are essential, but in many ways opposite.

3 Yin & Yang Social Media Tips

  1. Measure Your Monetized Investment in Social Media as Units of Time
  2. Define How Much Time You’re Willing to Spend to Achieve a Defined Number of Relationships
  3. Determine How Many Relationships It Takes to Achieve a Monetary Goal

Here’s a visualization…

In closing, all Phizz is trying to explain is this:

Monetary ROI and Relationship ROI are intertwined and important to understanding overall Social Media ROI.  You cannot have one without the other!  You’re business most likely requires earning equity with clients and building their trust (Relationship ROI) as well as increasing profits through directed, intentional investments of time and money in marketing and growth (Monetary ROI).  The Yin & Yang Perspective is a harmonious cycle that’s neither new or groundbreaking, but is key to understanding how ROI works in Social Media.

Social Media Strategy for Small Business – Part 2

Posted on 18. Jan, 2010 by in Blog

Social Media Strategy for Business – Part 1 introduced the “3 Portions of Your Social Media Paradigm”.  As a business you’ve always had these portions to deal with and now it’s time to translate them in an online social environment.   Traditionally you or your sales team sets goals or builds campaigns to manage follow up with past clients, prospects and to find new opportunities.  The good news is…  It’s no different in your 3 Social Media Paradigms!

Review of the 3 Paradigms

1. Recognizing the Past
2. Keeping Up With the Present
3. Moving Into the Future

Each portion represents a section of normal relationship management and is similar to how you always deal with the client cycle, right?  Traditionally we stay in touch with our past clients to continue to earn their business or get referred to a new prospect; we stay up to date on our industry and consumer needs so we can provide value to past clients and clients we’re currently prospecting; and we work toward earning new relationships through cold calling, drip marketing, branding campaigns, etc.  What’s so wonderful about Social Media and the inter-connectivity of the Paradigms within Social Media is much of this is accomplished very simply.

53 Steps to Growing Your Social Media Presence

Here’s how it works in words.  You need to accomplish 5 Actions in each of the 3 Paradigms in All Your Social Media Arenas and do it Consistently.

Example 1: 5 Actions > 3 Paradigms In a Traditional Sense

Past – Write 5 thank you cards to existing or past clients
Present – Send out (via email, print or by phone) 5 advertisements to let past and potential clients know of your services
Future – Obtain 5 new prospects to build your pipeline

This results in 15 actions and covers the paradigms of your traditional sphere.

Example 2: 5 Actions > 3 Paradigms > 1 Social Media Arena (Facebook)

Past – Comment on 5 friends wall/photos/status updates
Present – Update your wall/add a photo/start or join a group in any combination that adds to 5
Future – Via your current relationships or by searching, invite 5 people to be your friend

Again this represents 15 actions, but the powerful part about these actions lay in the fact that not only did your brand get noticed by the intended client, it got noticed by many of the client’s friends and family.  Basically, your company just automatically took care of the Future Paradigm by addressing the Past and Present Paradigms.  Also, as this progresses your Future Paradigm will grow legs of its own by shear participation in the Past and Present Paradigm.  You can imagine what would happen if you applied this to other communities like LinkedIn, Twitter, YouTube or any of the others available online.

Stay tuned for Social Media Strategy for Business – Part 3 where Phizz will address consistency aspects of the 53 Steps to Growing Your Social Media Presence…

Social Media ROI: What to Measure

Posted on 31. Dec, 2009 by in Blog

Social Media ROI continues to be a highly debated issue among small to large companies and it’s apparent that measuring Social Media ROI is still somewhat unrefined and even mystical.  Actually, Social Media ROI isn’t necessarily unmeasurable.  Ben Stratley (CEO of Meteor Solutions) does an excellent job of explaining his company’s methodology for quantifying Social Media ROI with his presentation Is Your Social Media Program A Boom or A Bust? How to Use Analytics to Find Out What’s Working & What’s Not.

A marketing team has to convince executives or managers of the benefit Social Media has in terms of ROI.  Many times that’s the only language those in charge of managing the bottom-line speak.  In the current economic situation it’s probably for good reason.  Can you blame them?  After watching this hour long presentation Phizz felt it was important to re-visit a few basic internet marketing metrics to help with proving ROI for Social Media.

Putting your money where your mouth Tweet is happens to be paramount.  Let’s be clear…

Everything you do via Social Media will revolve around one thing:  Driving Traffic To Your Website!

Actions you and your team desire once the consumer is there must be defined before any Social Media campaign is launched (which is another topic of it’s own).

Darren Rowse said in How I Use Social Media to Promote My Blogs regarding driving traffic to his blog a.k.a. Homebase:  “[Social Media] is there to build and reinforce the Homebase.”  and “…Homebase is where I put my primary focus.”

Ben Stratley’s team likes to refer to a Homebase as Owned Media.

To attain Social Media ROI you must be clear about what you want to achieve with your strategy. The slide show along with the terms below help explain metrics that define costs for calculations of ROI.

CPI or CPM = Cost Per Impression or Cost Per Thousand Impression: This metric tells you how much you’re paying per impression.  Each impression is defined as a single instance of that ad, better yet every time the ad loads on a users screen, with certain exceptions.  A each person that receives your Tweet would be an impression.

CTR = Click Through Rate: This metric measures relevance of a topic discussed or popularity of the defined topic, but more importantly its a way to determine if what you’re saying is grabbing the attention of the people within your Social Network(s).  Do your friends, clients or prospects care about what you’re saying?

CPC vs PPC = Cost Per Click vs. Pay Per Click: This metric eludes to the marketing dollars spent per click.  CPC represents the expense incurred for each click through, but is more organically grown via Social Media.  PPC represents the expense incurred from paying your host every time a click through happens on a predefined keyword.

CPA = Cost Per Action: This metric represents the expense incurred on any activity generated by the click through, usually predefined, but typically a sale or an order generated.

These are some metrics you can use to determine your expense throughout a campaign, particularly by using tools like:

bit.yl
twitt(url)ly
Google Analytics
Alexa

There are plenty of other tools you can find with simple Google Searches for SEO Tools, etc.

Next time Phizz we be focused on strategy for implementing Social Media so you can start measuring your ROI.