Show me the money

I started this blog to help bring together ideas about effective marketing strategies and tactics, while keeping our eyes on the consumer perspective.  I like to show examples of companies who have succeeded or not done as well so we can learn from their experience.

The thing I find most troubling, is that when I seek out examples, I rarely see anything other than big brand names (Ford, Domino’s, TurboTax, Dell, Home Depot, Starbucks, Pepsi, NFL, Kraft, P&G, Comcast, Zappos, etc).  And while some of us are lucky enough to work for those big brand name companies, the rest of us are working for small or mid sized companies.  And the list of examples from those companies is limited.

show me the moneySo I am saying “Show Me the Money” for the small and mid sized company.  If you have an example of a company having tangible results from their social media efforts, please share it.  When I say tangible, I don’t mean they have 3000 Facebook Fans or 2000 Twitter followers.  I want to see those people actually experiencing measurable, positive ROI on their social media investments.

How do you measure the impact of your social media strategies and tactics?  Companies should take a look at a few of the following areas before they begin a social media plan and then measure again after they have begun.

Revenue Measures:

  • Increase in the average order value of each transaction
  • Increase in the customer lifetime value (here is an easy version and a harder version of the calculation)
  • Increase in website or phone conversions (the % of people who buy from you / the % who called or visited)
  • Increase in leads or referrals
  • Increase in customer retention rates
  • Increase in the speed or decrease in the length of the sales cycle

Cost Savings:

  • Shorter customer service/issue resolution time
  • Decrease in support calls or greater percentage of issues handled online vs. phone.
  • Decrease in market research costs (gained by using your community for research instead of paid respondents)

There are some other factors that you can measure to see if your program is working, but drawing a line from these measures to increases in profitability is not that easy.  That doesn’t mean you shouldn’t measure these, but the weight you put on these factors should be less than the tangible financial benefits.  In other words, my opinion (and others will disagree with me) is that if you have a ton of followers or friends, but no increase in loyalty, retention or sales; then you have not achieved much with your plan.

Some of those other factors you can measure include:  mentions in the media, subscribers to blogs/email/newsletters, inbound links to the website, customer satisfaction scores, the number of positive and negative comments (a social media monitoring tool can help you measure this), and overall brand awareness.

Please send me your small and mid-sized company examples and let me know if there are other measures you use to assess your social media success.

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