In addition and with an estimated 24.9 million South Africans accessing the Internet, CRM through social media channels is now non-negotiable for brands of the 21st
century. Yet, only 34% of brands currently measure social return on investment (ROI) making brand exposure across social media a somewhat pointless affair. Businesses are wasting their investment in social media by not re-evaluating ROI.
So, how do you monitor your customer interactions across all of these different channels to truly understand how they feel about your brand? How do you attribute value to it? How sure are you that you’re right?
CRM is as old as business itself, but, with the rapid development and adoption of the internet, the tools driving CRM have dramatically and irreversibly changed. The result is the addition of Social CRM (also known as SRM, Social Relationship Management). SRM focuses on this new world of the internet, social media and millions of conversations taking place about your brand, in real-time, to provide richer and more relevant customer insights.
In this brave new world the governing principle of SRM remains the same: generate interest in your products, recruit customers into your relationship program, use data to understand your customers and, finally, use these new found insights to engage your customers in the most meaningful way.
This is all well and good but without the necessary business measurement of CRM (and indeed SRM) and a direct linking of activities to Return on Investment (ROI) for the business, any activity falls flat.
Thankfully, due to SRM’s data centricity it can be measured in highly granular detail, making it much easier for businesses to make better measurements and subsequently much better informed business decisions than ever before. Platinum Seed’s Continuon is the first viable type of analysis system in South Africa, which reflects the new direction of SRM. One in which, real leads are developed against consumer insights – where the consumer dictates what the business should be talking about thus creating brand relevance to the very audience it wishes to target.
First though let us understand the Social ROI Cycle one first needs to understand that there are two parts to the process. First, the brand must invest in building a community that is worth their salt. This is achieved by using marketing to attract the community, Relationship Management to listen and engage with users and the business functions to analyse and optimise activities.
Off the back of this investment a return for the brand is developed. As the brand optimises and analyses the insights that it is receiving it gains its first return, which is a more authentic business through the use of measurement of social media sentiment, market research and consumer insights gleaned from customer engagement (i.e. the business understands how customers see them, what they need and is operationally aligned with them).
This assists in the Relationship Management stage as there is significant increases in trust and loyalty (increasing re-purchase rates) and lastly, feeds back into marketing activity, through Word of Mouth where the now authentic, trusted and aligned, message is driven by your trusted customers - therefore accelerating the cycle by attracting more users.
Practically (and at it’s most basic), one can measure ROI through the following process:
Define conversion goals
Start by setting clear performance goals for the business and identify clear mechanisms to measure each of them. Some good examples would be website conversions or number of individuals joining the SRM program, your store walk-ins that quote a social-only discount code or any number of objectives which are both measurable and relevant to the business.
Track conversions (through-the-line)
Once conversion objectives are set up it’s time to track them to create a rich history of performance and provide you with the necessary insights to make decisions. If you’re using website performance (traffic, contact us or online purchases etc) then Google Analytics conversion tracking is a good start.
Set financial values on conversions
Now that you’re monitoring your conversions we need to assign a value to each goal that has been achieved. In essence, two models exist: either you can gut-feel and choose a value for each conversion based on anecdotal evidence (and agree it with stakeholders) OR you can look at past performance of that conversion type and calculate the conversion value from there.
For example, if my business gets 100 contact us requests a month, of those 10% convert to a paying client and the financial value of client is R1000. Only 10% of the contact us’ result in a paying client. So, each contact us (of the 100) is valued at R100. This can be repeated for all conversions.
Report and segment conversions by social media channels
Within your analytics tools it is highly recommended that you segment your channels (for example Facebook
and so on) and measure conversions separately. This allows you to identify which channels are performing best and make, live, prioritised decisions off the back of it.
Measure cost per social media segment
We’ve now got a breakdown of the income per channel. Great, but, that’s only half the story. We now need to consider all costs (be it time or financial) that go into each social media segment. In most cases it’ll be a staff cost for managing the process along with some advertising spend on the likes of Facebook/Twitter
and so on.
Unpack results into the Social ROI Cycle model
Using the Social ROI Cycle to identify which parts of your investment are performing and which returns could be optimised. Improving this will improve your overall ROI performance.
Analyse results and prioritise actions
We now have all the pieces but need to put it all together. To now calculate your ROI do the following:
- For each channel calculate ROI by taking what you earned, minus what it cost and divide the answer by the total cost; and
- Similarly, calculate overall SRM ROI using the formula above but by looking at all costs and all income via social.
In today’s highly competitive and connected world it’s the brands that best evolve to meet the needs of the customer that perform best. Traditional models of managing CRM are no longer enough and increasingly it’s those who find alternative routes that outperform the market. In the case of Rocking The Daisies,
SRM sits centrally to the entire brand experience.
Bands are selected based on Facebook/Twitter
feedback, general insights are integrated back into strategic planning and party-goers are empowered to help mould the experience for themselves. The result: Rocking the Daisies
has been sold out 3 years in a row.
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