Know what you know. Know what you don't know. I say it all the time to the people who work at ForeSee Results. And while those of us using social media to market our businesses know A LOT about how well it's working, we have virtually no information about the actual impact of social media marketing on our bottom lines
- We know how many tweets mentioned us or our competitors (but we don’t know if the people who are mentioning us or reading about us are buying)
- We know how many “likes” we have on our Facebook page (but not if they are more likely to visit a store than non-Facebook fans)
- We know how many people visit and comment on our own blogs
- We know what our customers and prospects are talking about (but not whether chatter contributes to dollars)
In short, we can count, but we can’t measure how social media is actually driving revenue. As the saying goes (you may have heard me say this one or one thousand times), you can’t manage what you don’t measure.
But we think we've figure out how to understand the effects of social media on revenue.
ForeSee Results uses a scientific methodology created at the University of Michigan to measure customer satisfaction and assess its impact on future behaviors. Using this proprietary methodology, we’ve created a way to link what drives customers to a website, store or call center with what they spend. We can help businesses understand how much revenue is being influenced by social media versus traditional advertising, marketing emails, brand awareness and other factors. We call it the Social Media Value Calculation.
It looks like this: we find out what influenced a customer’s visit to a store, website, or call center. Then we find out how much that customer did or didn’t spend. For a brand website, financial institution, nonprofit, B to B, or other non-retailer where there is no purchase, we can tie what drove the customer visit to another valuable, business-specific outcome such as opening a new account, signing up for a newsletter, requesting more information, etc.
Linking these two pieces of data (what drove a customer to a site, store, or call center PLUS what they spent or did as a result) allows for a proprietary Social Media Value Calculation that can help you actually determine social media ROI. You can accurately compare what you spend on social media marketing against the direct revenue it generates.
You may find out that social media is a primary influencer of $38 million of your revenue. If you’re spending $1 million on social media, then you’re making a pretty good investment. Or you may find out that social media is influencing $12 million in revenue, and you’re spending $15 million in advertising your social media presence, in which case you have some realigning to do.
The point is that you don’t know until you ask your customers, measure, and run the analysis. Do it in a smart, thoughtful way using the Social Media Value Calculation, and your customers will tell you everything you need to know about where to invest to get the most traffic, purchases, and loyalty.
We have a slightly longer version of this blog post available for download on our website as an executive brief, and of course I'm happy to answer any questions in the comments.
So what questions do you have about how this works?
