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What’s the R.O.I.? A Framework for Social Analytics


While the question of “what’s the R.O.I. of social media” is difficult to answer, it is necessary as it forces us to dig deeper.

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									What’s the R.O.I.? A Framework for Social
By Brian Solis, industry-leading blogger at BrianSolis.com and principal of research firm
Altimeter Group, Author of the highly acclaimed books on social business The End of Business
as Usual and Engage!

“Not everything that can be counted counts, and not everything that counts can be counted.”
- Albert Einstein

Say hello to my little friends, R.O. & I.

Yes. Return on investment have become the bane of an entire new media industry. However,
avoidance is not the answer.

While the question of “what’s the R.O.I. of social media” is difficult to answer, it is necessary as it
forces us to dig deeper. The result is maturity.

This conversation is important as you are expected to answer it not just today, but and also over
time. The source of the question though, may also impede innovation and experimentation.
Why? The answer in of itself is as elusive as the question asked. As much as the previous sentence
sounds like a riddle, it is a very real observation. Often it is asked without a clear understanding as to
whether or not the answer will actually change the company vision or the current course of business.
Sometimes it is genuinely asked to do just that, change the vision and the course of business toward

(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
relevance. Either way, this is an opportunity to show how new media enables desired business

Before we tackle the question, let me share a quote with you. After hundreds of executive
discussions, I’ve stitched together a recurring theme that I believe will help you…

“If you come to me with a request for budget and resources for social media, to make it a priority for
our business, you will lose every time…If you tie social media to our business priorities and
objectives and demonstrate how engagement will enable progress, you will win every time. Social
media must be an enabler to our business, just show me how.”

- Your CEO

Your job is to connect the dots between the value of new media, the expectations of your customers,
and the business roadmap the company is operating against.

So, when it comes to R.O.I. in social media, perhaps we’re asking the wrong question.

Again, the answer is difficult, but not impossible to answer. If I ask you, “how are you?” you will
probably respond with “fine,” “ok,” “good,” or “great.” But if you take a moment to think about it, each
of those answers begs a follow-up question to deepen the conversation, “why?” Or, “why do you say
that?” Otherwise the question serves no real purpose other than to casually acknowledge another
person or to run through the traditional ritual of easing into a conversation. The same is true for R.O.I.

If we are indeed to discover the “Return,” we need to tie it to more than the “Investment,” we need to
understand the circumstances, intentions, and potential impact and outcomes business leaders need
to see in order to understand new or foreign opportunities. Said another way, we need to define the
“R” that defines tangible success and work out a formula that allows us to find the answers.
Therefore, R.O.I is specific to an outcome or a goal, which means that there is no one answer.

To help, Susan Etlinger (@setlinger), my colleague at Altimeter Group, recently published an open
research report, “A Framework for Social Analytics.”

The report opens puts ROI in context to help you focus on business value in your social media

“What is the ROI of social media?” This is one of the most frequently asked questions related to
social strategy. While 48% of social strategists reported earlier this year that their primary internal
focus is to develop ROI measurements,2 ROI is just one metric in the social business toolkit. Rather
than focusing on social media as a monolithic entity, businesses should evaluate it based on its
contribution to a range of business goals. Says Richard Binhammer, Strategic Corporate
Communications, Social Media. and Corporate Reputation Management, Dell Inc., ‘There is no
single ROI for social media.’”

As we see in the executive quote earlier in the post, tying social media to business objectives and
metrics helps them see a clearer picture. We have to remember that executives most likely do not
use social networks personally. It’s impossible for them to see what you see, therefore taking the
extra time to connect the dots helps you make the case and in doing so, brings the R.O.I. answer
into focus.

(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
Susan also does a wonderful job of not only showing us how businesses should view R.O.I, but she
also helps businesses identify how to develop analytics frameworks that define the “R” or the return
for specific business objectives.

Prep work: Assess how your business is measuring R.O.I. on other fronts today

Step 1: Align your strategy with business objectives

Step 2: Determine how you will measure success and also define critical milestones

Step 3: Evaluate your organization’s readiness to measure social media and bridge the gaps

Step 4: Choose the right tools to measure progress and outcomes

(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
Remember, there is no one way to measure R.O.I. There are many business pillars that stand on a
solid foundation for growth. Susan introduces the Social Media Measurement Compass to guide
businesses as they’re planning social media programs. Remember, social media doesn’t just belong
in the marketing department, a social business is customer-centric and social media enables more
effective engagement, learning, and adaptation. Therefore, it is the responsibility of other critical
business functions to engage.

1. Innovation: Collaborating with customers to drive future products and services

2. Brand Health: A measure of attitudes, conversation ad behavior toward your brand

3. Marketing Optimization: Improving the effectiveness of marketing programs

4. Revenue Generation: Where and how your company generates revenue

5. Operational Efficiency: Where and how your company reduces expenses

6. Customer Experience: Improving your relationship with customers, and their experience with
your brand

(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
The three tenets of social business, Connected, Engaged, Adaptive create a transparent relationship
with customers that opens the door to meaningful metrics to measure success and improve
everything in between. In the end, understanding the relationship between business objectives and
social media tactics will create a series of relevant strategies and critical links that in of themselves
serve as opportunities for measurement and the establishment of R.O.I.

We cannot measure, what it is we do not know to value…

You can download Susan’s report here and also follow her on Twitter for more insights into metrics
and analytics.

Connect with Brian Solis on Twitter | LinkedIn | Facebook | Google+ | BrianSolisTV

The End of Business as Usual: Rewire the way you work to succeed in the consumer revolution

(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
Pre-order now at Amazon | Barnes and Noble | 800CEOREAD.
ENGAGE!: The complete guide for businesses to build and measure success on the social web

Click here for your favorite infographics…now in 22 x 28 poster format!

(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
Brian Solis is principal at Altimeter Group, a research-based advisory firm. Solis is
globally recognized as one of the most prominent thought leaders and published
authors in new media. A digital analyst, sociologist, and futurist, Solis has studied and
influenced the effects of emerging media on business, marketing, publishing, and
culture. His current book, The End of Business as Usual helps companies rethink
business strategies to lead, not react to, the new consumer revolution. His previous
book Engage, is regarded as the industry reference guide for businesses to build and
measure success in the social web.

Connect with Brian Solis on Twitter | LinkedIn | Facebook | Google+ | Youtube
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(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis

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