A new way to answer the ROI of social media question?
So you know how this conversation goes, right? Your presenting the results of a recent social media campaign and they sound really swell. To you at least. You smile as you share “compelling” metrics like impressions, retweets, shares, comments, likes, followers, repins. Then you ask if there are any questions. The room is quiet. Then the C-suite member in the room clears his/her throat and asks one of the following:
1. What was the ROI of the campaign?
2. Are those numbers good? Translated: Did the campaign you just told us about actually make our company any money?
How you answer those questions in that moment could determine your budget and relationship with the client moving forward. So you want to make sure that you don’t say something like: “It’s really hard to show a direct correlation between social media and the bottom line.”
It’s not because that statement isn’t true. It has been true for years — just substitute PR or marketing for social media. You don’t want to give that answer because it will cause the C-suite member to tune out the rest of what you have to say and likely form an negative impression about the impact (or lack thereof) social media can have for his/her business.
So how do you answer? Try one of these three options:
1. Highlight the sales that came from the campaign. For instance, if you shared a coupon code or were able to track the customer path from your social media efforts to the brand website and through completion of an e-commerce transaction. Always, always show proof of any sales numbers you can. That part isn’t new.
2. Project sales based on the company’s key indicator(s). This is the part of the answer that’s new. And it takes some research and getting your hands dirty before the campaign starts. The key indicator(s) I’m talking about here are actions in the sales cycle, often that the company knows lead to purchase. Lead generation is an easy example. Many companies know the lifetime sales average of a qualified lead. So if your campaign generates qualified leads, you can get close enough to estimate sales. Simple math: Number of leads times lifetime sales average. If it’s not leads, it could be that one of every 10 people who use the store locator makes a purchase. Or the brand knows rewards members spend more than non-rewards customers. So you’re driving rewards program sign ups.
3. Focus on impact. This one only works if you set measurable objectives pre-campaign. When you can’t show an direct line to sales, the next best thing is showing how your campaign accomplished a business objective. Thus, showing the impact of your work.
Make sense? What would you add? What’s the best answer you’ve ever given to the social media ROI question? The worst?
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Who am I?
I'm a business communications consultant at Fleishman-Hillard. I used to call myself a PR professional, but I don't use that term anymore because people hear PR and they think only media relations.We do a lot more than that at Fleishman-Hillard Kansas City (FHKC). I specialize in social media, but am trying hard to brush up on my measurement and analytics. Every strategic consulting conversation should start with your business goals and how communications can help you reach them. My motto: "Your brand is what your customers say it is." 
Perhaps a pre-post to this could be about how not every social campaign is ROI based. What you write above is good for the ROI discussion, but before that happens you need to get the C-level to understand what social activities are ROI based and what are ROO - Return on Objective - based. I think you avoid the question altogether if you set the expectation on how you measure success before you start. Thanks for sharing.
sdgully Really good point, Scott. Setting expectations is crucial. That is for sure best case. A scenario I have often run into and struggle with is when you are asked to show the value without having that access to the C-level. How would you suggest handling a situation like that?
What you call ROO I call showing impact. You are absolutely right that one of the best ways to show value is setting those measurable objectives (business and communications) pre-campaign, sharing them with leadership and then showing how we used social to help accomplish them. Good stuff. Thanks for stopping by!