In the world of coordinated creation of social media stories, there’s typically two kinds of success, or ROI, on social campaigns – Cost Mitigation, and Sales Increase. And I believe there is a Return on Relationship (ROR) fostered by all brand relevant content and communication… simply put the value that is accrued by a person or brand due to nurturing a relationship. ROI is simple $’s and cents, ROR is the value (both perceived and real) that will accrue over time through loyalty, recommendations and sharing.

With Cost Mitigation, it is important to look at success as generating more impressions than traditional media, for the same spend, or generating the same impressions for significantly less money.  It’s purely a CPM play. This is great for consumer packaged goods brands who have a large marketing budget, and view social as simply one part of their communication plan… and can work for any other brands who see the important of brand awareness.

A valuable method of defining ROI of Social is around annualized customer value. Typically a consumer who regularly absorbs content that references a brand in one manner or another is a more valuable customer than a non-fan/follower/subscriber. They may spend more (average order value, AOVand visit more often and make more purchases (frequency of purchase), remain loyal customer for a longer period of time (lifetime value of a customer) and very often all three. Very similar to legacy Loyalty Program metrics. Finding that average value isn’t all that difficult, and can give you a KPI for tracking when starting Social, when ramping it up, or pulling it back.

When combining consumer and influencer-generated content, engagement and amplified online syndication, correctly structured and maintained Social involvement, engagement and connection will produce significant results including Search Engine Optimization results that last, an increase in online Share of Voice (SOV) compared to competitors (very important and easily measurable), and engaged impressions and reach that drive brand awareness, loyalty and ultimately sales conversion. In addition start measuring and looking at how a strong Social presence affects your Net Promoter Score (NPS) Quarter to quarter (How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is most often based on a 0 to 10 scale).

To simplify things a bit into a couple of easily digestible soundbites, this is a basic approach to how I view Social, and it’s long-term relationship to ROI… 

Being Social drives Engagement, Engagement drives Loyalty and Advocacy, and both correlate directly to Increased Sales. ROR (#RonR) = ROI

Awareness = Revenues, Differentiators = Margins, Authenticity = Loyalty/Advocacy… All Measurable AND = Increased Sales/Profits.

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