Sales ROI - Social Media

Social Media ROI Series Part 5: Sales

Members of the c-suite like this ultimate ROI. Will it boost our sales? They tend to ask immediately. Who wouldn’t? I mean, businesses exist to make sales. The more sales a business makes, the more profits it makes in that financial year. However, businesses involved in e-commerce, stand a better chance of reaping this rewards through social media efforts.

According to Peter Friedman, LiveWorld, ‘There are two types of sales ROI. Firstly, there is the direct revenue lift brands see when they push promotions through social.’

Direct revenue, because of direct sales; belong to the short-term category of sales ROI. In this category, all that businesses want is to sale, sale…sale! They will post a product, its price, and a bold call to action, prompting immediate sales. This is a characteristic of businesses in the e-commerce industry.

Through a social media program, a business can make direct sales (short-term) by offering their products up for sale and or through promotions. Through coupons and or sales promotions, products can indeed move. As we know, immediate sales, is what members of the c-suite want to see: making it quite a challenge.

‘Of course, short-term sales are not bad. They’re good—as long as the promotional push to make them happen doesn’t compromise building a social experience with committed, long-term customer relationships (and the revenue they create).’ says, Peter.

If your goal is to drive sales, it is advisable that you embed call to actions in your messages and or have some metric in place that will show you how you are doing in regards to making sales. For instance, having a link on social media that directs the visitor to a landing page and or sign-up to a newsletter page, and or build a mailing list. These are good places to start. The key is to have some way of measuring your sales efforts.

‘Long-term sales ROI generated from relationship-building ROI when customers become active with the brand community, form a deeper relationship, and build a space for the brand and its products in there and their friends’ everyday lives. Here is where we see increased loyalty, increased lifetime customer value, and enhanced revenue growth that is sustained overtime.’ says Peter.

Still on the path to making sales, businesses can decide to go the long route and or short route. Instead of hitting their visitors with hard selling messages, they choose to forge a relationship first. Then cultivate that relationship into a lifetime customer.

This is the best route businesses are always advised to take. In the process, they not only make sales but also, convert total strangers into loyal and lifetime customers. Who better to evangelize your products and or services other than your customers?

Research has shown that people will tend to buy more if they get recommendations from close relations, compared to advertising and or persuasions by a business. Then why not leverage this opportunity? Make her want to talk about your products and or services, wherever they are.

In the sales funnel, for which social media plays a critical part, its takes time to convert a prospect. Holding his hand all the way from awareness, interest, decision, and action needs patience. In addition, social media plays a pivotal role in taking a prospect through all the stages.

In conclusion, knowing social media ROI is key to knowing the value any social media program brings to the table. Without which, any social media efforts would be seen as throwing away money. Knowing which ROI to be on the lookout for helps in finding a way forward. Knowing what works and what does not.

If you missed my earlier posts on social media ROI, read them here. I would love to hear from you on this. Until then, happy reading.

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Social Media ROI Series Part 4: Relationship Building

We are all familiar with the business motto: ‘A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.’

                                              

This motto has served many businesses in understanding that at the center of their operations is the customer. They (customers) determine the growth of a business. That is why organizations spend a fortune in recruiting new customers and still work round the clock to keep the old ones.

Knowing this, businesses then try to find ways to ensure that they build a formidable client base: which can be achieved through good customer relations. What businesses will realize is that social media can aid in cultivating good customer relationships, which will then lead to sustainable sales ROI.

“Delivering outstanding service [through social] creates impassioned advocates and can serve as a powerful marketing weapon for companies,” according to Jim Bush, Executive Vice President of American Express World Service, in a company press release. 

“For example, consumers who have used social media for service in the last year are willing to pay a 21 percent premium at companies that provide great service. They also tell three times as many people about positive service experiences compared to the general population. Ultimately, getting service right with these social media–savvy consumers can help a business grow.”  He adds.

Jim's testament, further proves the value of building relationships on the social web. On that note, social media delivers the following benefits:

• Customer Loyalty
• Brand Advocacy
•  Intent To Buy

Customer Loyalty

This is a result of consistently providing positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services.

According to beyondphilosophy, to build customer loyalty, customer experience management blends the physical, emotional and value elements of an experience into one cohesive experience.

It is said, retaining customers is less expensive than acquiring new ones, and customer experience management is the most cost-effective way to drive customer satisfaction, customer retention and customer loyalty.

Not only do loyal customers ensure sales, but also they are also more likely to purchase ancillary, high-margin supplemental products, and services. Loyal customers reduce costs associated with consumer education and marketing, especially when they become Net Promoters for your organization.

Brand Advocacy

The big and famous brands use brand advocates:  people who talk favourably about the brand and pass on positive word-of-mouth  messages to other people.

One thing a small business owner should know is that brand advocates are just as important to a small business as they are to the bigger corporations out there. People like to buy from companies or people that they know and trust, and they tend not to buy from those they do not.

However, how do you build that trust, particularly online? How do you get customers to come to you without spending a lot of money on advertising? By setting up a social site, and sharing topics that are of interest to your target audience.

Intent to buy

This is the ultimate goal of all business relationships. Yes, a business will feel good having a cohort of loyal customers. Having them (brand ambassadors) sell your business name, services and or products to their peers. 

However, building a relationship to the point that customers desire your products and or services and eventually decide to act on their desires, is the ultimate ROI.

For a business to walk the journey from building relationships and converting page visitors into loyal customers all the way to repeat buyers, takes good relationship building skills. Social media has provided a platform for which we can spend less, reach many people, and establish a connection. One that would eventually lead to sales. 

By monitoring the sales metric, you are able to quantify the value social media is bringing to the table. Understanding ROI helps us stand firm, and set our eyes on the prize.

If you missed by previous post, read it here.

Social Media ROI - Learning

Social Media ROI Series Part 3: Learning

As technology finds its way into the hearts of businesses, revolutionizing the way we do business, only the fittest brands will survive. Why not be among the fittest?

Those operating businesses, always feel their lungs crushing whenever there is a new player in the market. This is years after the pioneers thought that they had the only keys to the kingdom. Suddenly they realize people are willing to make their own keys and thus doors. Making it clear that the kingdom does not belong to them: and it never did in the first place. More can be said about competition: suffice it to say, it is alive and well.

How do you become fit? You listen. You research. You simply find all information available that will go towards improving the quality of services and products your business offers. It is at the precipice of succumbing to competition that social media comes in.

By supporting your social media team and efforts, you have created a 24/7 focus group which is rich in information. I will go a step further to say, information you will find useful.

Usually when businesses want to find out new information about the newly launched soap for instance, a team armed with questionnaires, surveys and any other research method is deployed to the field. After months of tedious work, long when the product is almost being phased out, results come in. Only to find a swift young blood with superior products at affordable prices. Rather one that meets the needs of his target market. But how, you ask. Social media.

Having a robust social media presence will help you gather this information within a day of dedicated listening. As Peter says, ‘What you’ll find is that what customers reveal when they talk to each other is even more authentic and useful than what they tell you directly.’ Paid focus groups. ‘The opinions they express there are apt to be more honest and less self-conscious than what they would have contributed in the structured, paid environment of traditional focus groups.’ He adds.

Therefore, how is this a return on investment (ROI) you wonder? Well, because you are getting quality useful information within the shortest time possible and at a lesser cost. Compared to the many months you would have spent tasking the marketing team and paying dearly for every piece of information you get in both human resource, time and money.

Here are Edward Stening thoughts on the value of social as a market research channel. “[Our social marketers] know what customers like, they know what they don’t like, what pisses them off, and they know how to get a reaction from them. They know what brand messages will or won’t excite them, what time of year to talk with them,” Stening said. “It used to be random; we’d send out a mailing, do a print ad and a TV ad, and we’d get research nine months after the fact. Now our marketers can get on our social pages and can learn more about their customers from a half an hour of looking through our engagement than what they would have learned from a market research document. We’ve tried to use this as a keyhole into the world of the customer.”

This cements the idea that those on the social media bandwagon stand to reap the rewards of social as a market research channel. By having, a 24/7 focus group, thus ready information, waiting for you to gather and analyse it you increase the chances of your business to compete. However, the key is to listen. Through listening, you learn about these insights, which then form the building blocks for any decision you make aimed at improving the products and or services rendered.

“It is important to leverage social media as a listening post. In one form, it is an extension of customer care, and in another form, it is giving you product feedback and suggestions. If you are engaged with customers, having a dialogue and an ongoing community, you will learn who the posters and the leaders are, and you can start to influence them. You can create calls to action and drive behaviour,” said Winell.

Now what information are you seeking? Go to your social media sites and go through the comments your audience has been posting. Listen. You will find the answers you are looking for. Good luck!

In case you missed my part 1 and 2 series, you can read them here.

Social Media ROI

Social Media Statistics

Perhaps by now you are wondering, ‘I have a social media program going, now what?’ You have every right to think so. Convincing management to permit the launch of a social media program is no mean feat. More so, when they have pumped money to keep it afloat: pay for the team and other social media related costs. You just need to prove value.

Be warned though, some will be waiting for you to fail for them to pull the rag under you. We will not let them. By identifying how to spend the money and what to expect, usually referred to as Return on Investment (ROI) they will wait, and wait. Meanwhile, you will be smiling.

Contrary to what you have been told, social media can be measured. As social media was starting out, no one knew how to measure progress. A dark cloud hang over us in as far as knowing if your program was succeeding and or failing. In appreciation to those who were courageous to march forth amidst the uncertainty, today we have ways of telling success from failure (and I use failure, loosely.)

Therefore, what will you be on the lookout for? In his book, Social Media Handbook, the author Peter Friedman, writes about five social media ROI models (which will form my blog post series). In this first post, we will look at one of the models: social media statistics.

In this ROI model, we will be on the lookout for:

• Fans
• Likes
• Engagement

Fan Metrics

Through what social@ogilvy call ‘fanning’ this is when, you get people signing up for a connection with you on social media and or liking your facebook page.

This is the metric many managers and or directors, watch out for. You launch a corporate page today and one month down the line, they expect to see 1000’s of fans on your social sites. Starting out with this expectation can be detrimental. This metric might indicate you are not doing anything, when below the surface you are paddling like crazy.

As much as we all like to get millions of fans/followers/subscribers, it is pointless to center your entire social universe on this metric.

‘Building your customer audience is important, of course, but just building these numbers in themselves yields a vanity metric.’ – Peter Friedman, CEO LiveWorld. It cannot be said better than that. You are right to get excited about the entire fanning process, but aim for something better. But take note of how you are doing in as far as this metric is concerned.

Engagement Metrics

This is where all glory lies. However, be warned, it is not easy. Like my high school Principal used to say, 'Good things are expensive.' To relate: in order to reach reputable levels of engagement you will need to really invest resources (money and time).

That said, imagine you have almost a million fans. How do you get them to comment on a post, share their opinions, and or refer your products and or services to their close relations? This is the end game we all should strive to achieve.

This metric points to the levels of commitment your audience has to your brand. Moreover, someone who shows this level of commitment is sharing and or spreading the word to others. Better yet, and this is good news for sales, they may be buying from you.

Mr. Friedman says, ‘Liking a comment is good. Sharing or re-tweeting it takes more effort and is a statement that the user thinks the comment is worth the attention of others. Commenting is the best, because that takes more energy and time and suggests the person is truly engaged, mind, and hopefully heart.’

Well, how do you tell that you are hitting this metric? By looking at retweets, likes, shares, talking abouts, and comments. For you to make their social media experience worthwhile to merit the engagement you desire, you need to curate content that they will care about. Stop being egocentric in as far as content curation and publishing is concerned. Ensure your content centers on them, and not you. I mean, they are sharing their social presence with you: and you (brands) are many. Try not to waste their time.

Social media statistics, will tell when we are doing something right. And when we are doing something wrong. In both cases, we can know whether to revise our strategies or continue doing more of what we are doing. It will suffice to have this written down under goals when starting out but make a point of emphasizing the importance of engagement, and not likes.

So next time, be on the look out for these metrics. But know the value of each.