Social Media ROI and Obliquity


image via FlickR courtesy of LucyFrench123

image via FlickR courtesy of LucyFrench123

“The problem with brands in social media is that they act like 19 year old dudes”.
Yelled Gary Veynerchuck at SXSW, excited as ever.

His point was that there is a tendency to approach every interaction with a single goal - sex for the dudes, sales for companies. And to rush towards that goal without pausing for breath.

I have been reminded of Gary’s comment a few times this week. Mostly by the economist, John Kay.

John has a new book out: Obliquity – why our goals are best pursued indirectly. And as a result he’s cropping up everywhere at the moment.

The premise of his book is that the greatest, most profitable companies achieve success as a result of focussing on higher ideals than cash generation. This is not an especially groundbreaking theory - I’ve rarely met a successful entrepreneur who was primarily money-motivated. However I do think he has coined a super phrase and one with a distinct social media relevance.

Obliquity - why social media goals are best pursued indirectly
Success in social media rarely comes from being the 19yr old dude. Sustained social media ROI relies on building realtionships, not converting one-night-stands. The tools of social media provide a new form of communication. As a result they can help you improve products, processes and customer relationships. An indirect, or oblique benefit, might be more sales.

However, obliquity is a tough message when you’re a nervous marketing manger who only likes to spend money on safe bets where ROI has been proven upfront or in advance.

The tragedy of social media is that “digital can be measured”. This drives a desire is to spend £1 and get £1 and 10 pence back before investing more. Whilst such an approach is fine for Google Adwords or other search marketing, social media plays by different rules.

Please don’t act like the 19yr old dude. Customers can spot it a mile off. You’re far more likely to achieve social media ROI if you focus on a different (oblique) business goal first. Use social media to engage customers. Use social media for deeper customer insight or to improve your customer service. The cash will follow.

Gaining internal support for social media


Getting the buy-in for the social media solutionWe’re often asked how to build corporate support for social media projects. There are many social media advocates that find it hard to sell internally.  What’s the best approach if you’re a Marketing Director selling a social media proposition to the Board? Or a Department Head keen to include social media in your 2010 budget?

I have recently coached a client in selling his social media business plan internally. As previously explained (see my selling social media series), a key component in the sales process is to associate the business needs to the social media proposition. I see this often overlooked as people present their long lists of features and functions, many of which are superfluous, in the hope that quantity will overcome quality.  No!

So, to do this exercise properly with my client, we booked a meeting room for half a day, and we spent a couple of hours considering his business strategy and the corporate needs of the company. With the key business priorities apparent, we then started linking these to the components of the social media solution. We found that 7 of the company’s top 8 business needs could directly benefit from some social media features and associated community engagement.

We then created a simple powerpoint slide, with 3 columns, Need, Feature, and Advantage. Each business ‘Need’ with the relevant social media ‘Feature’ (or Features in some cases), that delivered a noted ‘Advantage’ to the business (ideally quantified and objective). And, finally at the presentation, as he talked through the slide, I coached him to ensure that he gauged the ‘Reaction’ (from the audience) to each item as he went down the list. ‘NFAR’ – Need, Feature, Advantage, and Reaction.

This turned out to be a great starting point, but there was still more work to do. Building support for any new proposition often requires a mix of 1to1 meetings as well as larger group sessions. Ahead of the team discussion you should meet with some of the key influencers on an individual basis to get buy-in. Just as you would have with any new initiative.
The final point to make is that an important part of selling is management of expectations. And when it comes to social media this is especially important. Social media is frequently over-hyped. As a social media agency, we’re always very keen to manage our own enthusiasm and focus on promising only the things we know we can deliver. Projects are always harder and take longer than people expect. Don’t damage your personal credibility by over-selling social media.

Lack of knowledge hampers social media marketing. Let us help.


A new report out this week suggests that the biggest hindrance in the adoption of social media is a lack of knowledge. The statistics, from MarketingSherpa, look at the barriers that organisations cite as having stopped them from adopting social media marketing techniques in their firm.

Of the 1,886 firms interviewed who had not embraced social media as a marketing tool, 46% cited a lack of knowledgeable staff as being a significant reason for this. The second most popular response was an inability to measure ROI, with 43% of firms claiming that this was preventing them from adopting social media marketing.

That these two reasons are cited by firms are not a surprise to us at FreshNetworks. We know that clients sometimes need support getting up to speed with the latest changes and developments in social media and how it can help marketing. This isn’t surprising. Things are changing quickly in social media, as we’ve seen in the UK over the last two weeks where a number of popular TV and radio figures have started using Twitter as a part of their shows, thus propelling it into the mainstream. It can be difficult for firms who are busy focusing on their own plans, products and direction to step back and take in the changes as they are happening. Even more so in the current economic climate.

ROI is also a serious issue for marketers, again even more so now when they need to maximise the impact of every piece of spending. There is a lot of discussion of measurement in social media. At one end of the spectrum are people who think that measuring web traffic and statistics gives you a real insight into what people are doing in social media. At the other end are those who think that a firm should be more business-focused, establish a set of objectives for their use of social media and then measure against these. We tend to think that a mix of the two is the best solution. No business should embark on a social media marketing plan without some very clear business objectives in mind. One of our clients wants to increase repeat purchase, for example; another wants to create a target number of new ideas for their product team. Alongside these business objectives are a set of community measures and metrics that make sure we’re on track to achieve what we want.

So, it’s not a surprise that lack of knowledge and lack of clarity of ROI are the two biggest stumbling blocks for firms embarking on social media marketing. But they really shouldn’t be.

And if you’re one of these firms that’s thinking about adopting social media marketing, we’re here to help. We’ve got a wealth of articles, reading, case studies and posts on both topics so take a look and see if we can help.

  • Worried you don’t know enough about social media? Check out our articles on social media and online communities. You might also like our Social Media Beginners series and our regular Social Media Diary.
  • Not sure about ROI? Our Social Media Diary will probably help too. As might our posts on measurement and ROI.

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KPIs and Metrics - more on online community measurement


I’m returning to the subject of measuring the ROI of online communities after an all day session with a client today. We spoke a lot about how they are to measure the benefit of the online community they are launching and about the metrics they are going to measure and the KPIs they will report on.

I’ve worked with a lot of clients and read a lot of things on metrics and KPIs and have noticed that many people confuse these two terms. Really they’re very different. The best description I have seen of how and why they are different is a presentation from Dennis Mortensen, that I’ve copied below. It’s worth a look as it quickly and clearly shows how and why metrics are different from KPIs.

This ties in to the debate on measurement in online communities. There are many things that you can measure (metrics) but only some things that show the impact your community is having vis-à-vis the business or other objectives of the site. These are KPIs and are what you probably will be using to show the success of your online community.

So work out all the metrics that you can track with your online community, and work out what KPIs you are going to report on to show the success of your community. Both are measurements but only the latter is really a measurement of success of ROI.

View SlideShare presentation
  • So How Do You Measure ROI of Online Communities?
  • Great Article on Measuring Social Media ROI

So how do you measure ROI of online communities?


The answer to this question is simple and complex. The simple answer is that you make sure you establish a set of criteria when you launch the community and then judge success against these. The complex answer come with some of the ways in which you may judge success.

The workshops that I’ve run with clients at FreshNetworks only prove that every online community has a different set of aims and so needs to be measured in different ways. However, a few basic principals exist that show the possible ways in which you can measure ROI.

First of all it’s useful to distinguish between actual measures of ROI and measures of the health of the community. As people who build and manage online communities, at FreshNetworks we are interested in metrics such as number of people who log-on each day, proportion who make contributions, average amount of time spent on the community and other such measures. These help us to benchmark the community against others that we have run and understand how each community is developing. It’s also useful for us to be able to build a set of metrics across community types so that we can better understand consumer behaviour in them. In most cases however, such measures are not (just) what we use to measure ROI.

A client may want to own the debate in a certain area. It may want to work with its customers to improve or develop its product in an online research community. It may be looking to engage a new audience demographic. It may want to amplify the word of mouth for its services. There are many reasons why people may set up online communities and understanding these on a very granular level is the first stage to effective measurement of ROI.

Then it’s just a matter of work out which factors will help you to understand how you are performing against these aims. There are really two types of data you can measure in a community

  1. Qualitative data - this could mean measuring the quality of conversations about the brand, the response to the brand and competitors, the increase in actual conversations and dialogue about the brand, the extent to which these conversations are positive, the quality of ideas generated. Whatever you’re trying to achieve there will be qualitative measures that help you to measure this. Of course the problem with qualitative data is exactly that - it’s qualitative. Although this is the nature of online communities - they’re a space for conversations and discussions. So we often find that establishing detailed qualitative measures of success can be the most revealing and the most informative.
  2. Quantitative data - to some extent this is much easier to measure, the trick is measuring the right thing and not measuring too much. From Google Analytics to more bespoke packages there are ways of quantifying a member’s interactions with the site and building a set of measures from this. It may be about reaching more people (possibly of a certain type), or about engaging the same people for longer. Quantitative measures can be good for understanding how people interact with the site.

This is really the fundamental difference between these two types of data and these two ways of measuring. Qualitative data helps us to understand the quality and usefulness of the contributions to the online community. Quantitative data, on the other hand, shows us how people have interacted with the site.

Most are important to measure and different clients have different aims from their online community - this means that different baskets of measures are needed. Sometimes you’re more interested in the quality of debate and so want to include a greater number of qualitative measures; sometimes you’re more interested in the reach and penetration of the community and so want to include more quantitative measures.

Whatever you measure it is that first question that’s important: what are you trying to acheive with this online community; how will it help your business? Answering that is where it all begins and one of the most critical stages in planning a successful online community strategy.

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