What’s the Point of Your Social? Understanding the Path to Social Relationship Management ROI
By Mike Stiles on Sep 13, 2013
You know what smart people do? They seek out smarter people. So in an attempt to be smart, I grabbed Trip Kucera, Senior Research Analyst at the Aberdeen Group to see what they’re discovering about how organizations are approaching social ROI. Trip leads the Marketing Effectiveness and Strategy practice and is well aware that in many C-suites, ROI is the stick in the spokes that’s slowing down adoption of the socially enabled enterprise.
Spotlight: Why should CEO’s, CMO’s, and CIO’s start taking social seriously?
Trip: Several weeks ago, we witnessed the latest in a string of social media follies when a British Airways customer purchased a promoted Tweet to express his displeasure with the service. Social has long been an echo chamber of complaints, some warranted and some not, but this may be one of the first times a customer actually invested their own money to be heard. That’s a milestone in the evolution of the empowered customer and not the last of it we’ll see as advertising gets put in the hands of the average consumer.
Spotlight: Ah, so the damage an upset customer can do should be factored in to social ROI. There’s a cost to getting it wrong?
Trip: Disgruntled customers are nothing new, and brands are wise not to overreact to every complaint lodged on Twitter and Facebook. But such moments put a new wrinkle on how organizations consider the ROI of their social relationship management strategies. A social strategy that might have more effectively addressed the customer’s concern probably isn’t going to immediately generate revenue or reduce costs, but something beyond a 9-5 social presence as was the case for BA probably seems like a pretty good investment in hindsight.
Figure: Leaders Put Brand Image on Top
Spotlight: I know you’ve got research on how much brands are expecting social to directly result in leads, so spill it.
Trip: Over the last few years, brands have built up their social communities with the hope of eventually figuring out how to convert likes into leads. But we’ve seen an interesting evolution in the focus on social strategies in Aberdeen’s research. In late 2011, social demand generation or customer acquisition was identified as the top strategic action. But in Aberdeen’s most recent survey, the largest percentage of top-performing companies are focused on improving the image of the brand, with direct demand generation/customer acquisition coming in as the 2nd most adopted strategy, but the top among all companies combined and Followers separately. (Aberdeen’s methodology identifies the high and low performers in a given survey and uses this to identify best practices as the strategies and capabilities used by top performing firms)
Spotlight: So brands are coming around? They see social as belonging at the top of the funnel as opposed to being a “closer”?
Trip: Well, this prioritization suggests a maturing of social relationship management priorities and maybe a more nuanced sense of payback for investing in it. These firms are banking on the fact that positive social brand image will convert to brand equity.
The trust in this conversion is evident in the social metrics preferred by Leaders, which show a bias towards monetization. Seventy percent (70%) of Leaders rank inbound website traffic as “valuable” or “very valuable” in measuring the impact of social relationship management (4 or 5 on 1-5 value scale) vs. 54% of Followers; and 60% of Leaders indicate marketing leads/conversions as “valuable” or “very valuable” (compared with 59% of Followers). Interestingly, social sentiment, a direct measure of positive brand resonance on social, appears towards the bottom of the list.
Figure: No Vanity Here - Leaders Prefer Business Impact Measure
Spotlight: Now you’re making me dizzy. So they’re using social for brand image as a strategy, but they want to see leads as the metric.
Trip: This juxtaposition points to the evolution and maturity of social relationship management, along with an understanding that the path to value isn’t necessarily a direct line. At a strategy level, firms are focused on building capabilities that support positive brand image (and actively engineer opportunities for engagement), but they ultimately will measure the impact in terms of real, tangible business benefits, rather than vanity metrics.
Spotlight: So basically, the path toward becoming a brand Leader in social involves little more than getting it right…using the right tools and executing the right strategies.
Trip: It’s hard to tell exactly what the impact of a more proactive social relationship management initiative on the part of British Airways might have been. But aggregated data from Aberdeen’s Social Relationship Management study shows cumulative adoption of best practices makes a tangible difference for firms. One of the key metrics we use to determine Leaders is the year-over-year change in positive social mentions of the brand or product, directly aligned to the top strategic action. On average, Leaders generate 114% more website traffic from social activity vs. Followers (11.5% vs. 5.4%) and 55% higher leads/conversions from social compared to Followers (4.0% vs. 2.6%).
Spotlight: Now that I know Aberdeen has all this great data, you know I’m going to come back to you for more of it, right?
Trip: I’m looking forward to it Mike. Social relationship management has clearly moved past the experimental phase, but there’s always a place for data that can help marketers and executives better chart their path.
Photo: bschwehn, stock.xchng