Show me the Social Media proofs for ROI

02 June 2011

In response to Keith William’s comments last week on my social media blog at Enterprise Britain  I thought I would provide some “proofs” that demonstrate that social media can deliver a return on investment.
 
To address Keith’s healthy scepticism I thought I would focus on how to measure your social media and examples of companies who have invested in social media and what they have achieved.
 
Benefits from using social media
First let’s look at some recent research with marketers on the benefits they are seeing from social media. In the Social Media Marketing Industry survey published in April 2011 by Michael Stelzner there are key improvements marketers are seeing from using social media in 2010 versus the 2009 survey. [1]  
110602_Michael-Stelzner-use-of-social-media-graph.jpg
© Michael Stelzner Social Media Marketing Industry Survey
 
An extra 9% of marketers said that social media had increased traffic and subscribers for their business and an extra 8% said that it had improved their search engine rankings. A recent Amex survey showed that mid sized companies (3-10mUSDm air volume) were the largest adopters of social media as 59% of them were now using it to support their business travel management.[2]
 
Key research from The Influenced report[3] into consumer search behaviour showed that consumers who are exposed to a brand in social media are 2.4 times more likely to search for that brand’s products downstream when on the internet.
 
Recent research from The Hubspot showed that companies with blogs were getting on average 55% more visitors and 97% more inbound links than those sites which had no blog. It’s worth using Hubspot’s free website grader[4] and blog grader[5] to test the quality of both as the reports really helped me to figure out how I can optimise them even further. You can also test your website and blog score versus your competitors.
 
So who’s getting some results?
 
Retail
Here are a couple of examples of companies which are getting results with social media:
 
This company embraced social media from day 1 and was acquired by Amazon. It had $1.2 billion in gross merchandise sales in 2009 and only started trading in 1999. It’s an impressive 10 year record with success largely attributed to everyone at the company using social media. Compare that with the 55% of companies elsewhere that are still not allowing their employees to use social media to help them with their marketing efforts. Zappos was acquired by Amazon in 2009.
 
I also found an interesting list of websites getting good ROI using social media on Slideshare dating back to 2009.[6] For those of you that have not yet used it Slideshare is a useful tool for loading up useful presentations which you can then load onto your Linkedin personal or company profile. They make it a bit easier for visitors to learn more about what you do. Your presentations can also be optimized by also inserting a video clip on the first slide aswell to bring them to life. 
 
One of the company examples was that of Threadless which uses social media and “crowd sourcing” to create designs for its T-shirts. What interested me was that more than two years later, when I type in Threadless into Google, the company dominates the first page of Google and no other company gets any visibility. It has used its many social media channels such as Facebook. Twitter and its Wikipage to ensure that it gets maximum first page Google rankings. This company was claimed back in 2009 to be making £10m in profit on £30m sales in an industry that you might claim is mature and commoditized. Its Facebook page has more than 286,000 fans and it’s Twitter page has over 1.6m followers.  It describes itself as a “community based company” that involves its fans in the design of its product.  An interview[7] with the CEO showed that sales in 2006 hit $18 million -- with profits of roughly $6 million. In 2007, growth continued at more than 200 percent, with similar margins. Unfortunately they do not disclose their latest financials but interestingly 75% of their employees came from their community which must save on their recruitment costs..
 
Another video that is well worth watching was made back in December 2009 so remember that the number of Facebook fans are now at 700million rather than 300 million. It was made by Erik Qualman who wrote Socialnomics and I trust that it has helped to convince the 349,000 viewers who have already watched it and will convince you to see the value of social media. It contains a host of B2B and B2C examples of companies making money using social media showing that Ford now spends 25% of its budget on social media.
 
Remember to ask this one key question
As I discover more examples I will share them with you. I can vouch for clients that I have worked with that we were tracking thousands of pounds of sales from the first couple of months of launching Facebook. However you need to make sure that you can measure any clickthroughs from your posts through to your booking engine and subsequent sales. The million dollar question to ask every buyer, on whichever channel they subsequently buy from you, is “How did you hear about us?” You may be surprised by the answers.
 
Do share the names of any companies you know are making money with social media. If you like this blog please share it with your colleagues. I love feedback so go ahead and give your views. What’s stopping you from investing in social media?
 
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