How To Prescribe A Return On Investment In Facebook

Yes, you can measure return on investment in Facebook and from there optimize your news feed output.

How can you apply a systematic framework — PowerPoint is not a framework — that is as rigorous and defensible as the income statement your company provides Wall Street?

Well, if you’re a big brand selling shampoo or soft drinks, your metrics will be quite different than a retail chain selling pizzas.

The messaging for a plus sized women’s clothing brand will differ from a local fitness center; one creates acceptance while the other creates dissatisfaction.

The number of fans needed to make an impact for a global non-profit versus a local optometrist varies widely; the latter needs only a few visits a month.

Do you have that list of goals in mind for your business, which you apply to all of your marketing channels?

Okay, let’s get started with your self-diagnosis, which should take you about two-and-a-half hours to complete.  You can speed things up by working on this with colleagues.

1. Build Your Overall Marketing Effectiveness Framework

This is not an information technology exercise or one that should require programming, unless you are handy with Excel and also enjoy dabbling with application programming interfaces.

List your metrics as columns — fans, interactions, and revenue, for example — and then list your marketing channels as rows.

Odds are you have part of the work already done for you in your web analytics.

But have you also included your earned media (what you get from Facebook, blogs, and social channels that you can’t put a tracking code on)?

And are you including your advertising campaigns, which are both online and offline?

Odds are that you have a number of holes in your spreadsheet.  That’s okay—just estimate for now.  You just want a starting point.

2. How Much Are Casual Visitors And Customers Worth?

If you are a business-to-business brand, this is a challenge, since values can vary widely. If you’re a consumer brand, it’s easy.

Take the sum of owned, earned, and paid media to get a total impression figure, multiply by a reasonable cost per impression ($5, for example) and divide into your number of users across all channels.

You’ll probably get a number between $2 and $10 for a casual visitor — meaning first time or not engaged.

And for your customer, you’ll get a figure that is close to the casual figure divided by your average unique visit to conversion rate.

For example, if you run a retail chain and know via surveys that 33 percent of your Facebook fans are real-world customers and that a customer is worth $100 in revenue, then a Facebook fan is worth $33.

This does include overlap with other marketing channels, so you then have to factor that down by the degree of overlap.

Use your average number of touches per customer prior to conversion. In Google Analytics, this is called “visits to conversion.”

So if a customer visits you four times on average before buying (Facebook, paid search, email, and then display, then the incremental value is about $8). Your math will vary.

If you’re lost or forgot high school algebra from 20 years ago, don’t worry — give the assignment to your analytics staff to figure out.

You just want to determine how much overlap there is between your Facebook audience and your other marketing channels so that you can determine a true incremental contribution of your social marketing efforts.

3. Assemble Your Interest Targeting Grid

What is the unique selling proposition of your brand?

In other words, why do people choose you over the competition?  Who are these people and what characteristics identify your best customer? Where do they live, what TV shows do they watch, what other brands do they like?

You may even have target personas already set up to bucket your customers — such as young single moms, college kids, the urban elite, and so forth.

Now create a spreadsheet that has one row per type of customer (or interest target) and then columns for the interest name, your brand or conversion message to that interest, how many are in that audience on Facebook, and how many folks in that audience you have.

For a shoe company that wanted to reach males 13 through 17 years old in the U.S, we determined they had about three percent of the audience for basketball, one percent for baseball, and varying other percentages for other sports.

If you made it this far, congratulations!  You must be a marketing maven, since most folks get stuck at step two, since the math bogs them down.

But when you persevere, believe me, it’s worth it. You then have a foundation against which you can rigorously measure your social efforts.

If you automate data collection via a dashboard, you can set thresholds to show alerts if a component of your marketing program has gone out of whack — your fan lifetime value is decreasing, your clickthrough rate is increasing and a particular message against a certain interest target is resonating.

That leads to action — refresh your marketing creative, post different items on your wall, come up new variations of what’s working, spend more against a particular target, and so forth.

When you’re doing systematic marketing, you’re letting the data guide, but not blindly control, your decisionmaking process.

Not only are you growing your marketing effectiveness measurably, but proving to your chief executive officer your value to the bottom line via numbers that she and the chief financial officer can understand.

Instead of just more fans, gross rating points, or media mentions, you have hard statistics that the board will appreciate.

While this initial exercise on paper may take a couple hours, the actual implementation of cross-channel measurement may take several months—then the development and execution of programs that tie into this measurement may take 18 to 24 months.

The accounting and finance folks have SAP or whatever system tracks and manages the general ledger and chart of Accounts.  It’s now time that the marketing folks have their system— PowerPoint and Excel don’t count!

Dennis Yu is Chief Executive Officer of BlitzLocal.

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Social Networking for Solo Entrepreneurs; 7 Suggestions

Solo entrepreneurs wear many hats when it comes to running a business. One of these “hats” includes managing social media activities.

To reach a point where social media engagement produces meaningful results in terms of business development and customer loyalty requires a long-term commitment of both time and resources. Here are seven practical steps to achieve these results, gleaned from years of doing this as a solo entrepreneur myself.

1. Think Strategically, Then Tactically.

Like other forms of marketing, social media has to support business communications and marketing goals and objectives. If it can’t, then why use it? The place to start is at the strategic level.

However, it is not a matter of creating a social media strategy separately from other forms of marketing. Instead, determine how social media tools and tactics can be integrated into an overall marketing strategy. Here are some possibilities.

• Reduce customer service costs.
• Create engagement experiences that change consumer perception of your brand or products.
• Build relationships that drive greater loyalty.
• Produce new ideas that increase business margin.
• Generate high frequency postings, which keeps your brand top of mind with the customer.
• Drive traffic to your website.
• Produce new leads or product sales.

Consider what you are already doing in terms of marketing and add a social layer to it. For example, if you use email marketing, could a link to a web-based version of the email be tweeted to your followers at the same time the message is distributed to your mailing list? Or, can Facebook social plug-ins — the “Like” button, for example — be added to product description pages? How about a customer ratings and review component? Those are simple steps that, once integrated, require almost no time investment.

Though limited in scope, this approach might be a practical first step in getting started with social media. Regardless, first think strategically, then tactically.

2. Locate Your Customers; Then Go There

Just because many companies use Facebook, LinkedIn, Twitter or Google+ does not mean your company should. First, find out which social networks your customers are using, and then create a presence there.

Brand monitoring tools such as Trackur, Radian6 and Brandseye and can find the platforms your customers use. It makes little sense to have a presence in places where your customer doesn’t.

3. Assign Meaningful Metrics.

Once you understand the business objectives, identify the right metrics to monitor social success. Choose measures that align with your business goals.

Important metrics could include the following.

• Accessibility. How visible or reachable your brand is in the social world.
• Interaction. How consumers react to your company in a positive way.
• Qualitative. How engaging your content is based on consumer response.
• Quantitative. How much traffic social engagement drives to your website, for example.

4. You Do Not Have to Do Everything.

You don’t have to have a ubiquitous presence within social media, at least not at first. Choose one thing and do that, then add other activities over time.

If I were just getting started in the use of social media, most likely I would pick Twitter as my “one thing.” It’s a simple tool that is easy to use, yet can serve many functions. In fact, I refer to Twitter as my “social media Swiss Army knife.”

For example, Twitter can be used for networking, brand monitoring, announcements, product promotion, customer service, information sharing, feedback gathering, lead generation and sales. Just about any way you can conceive of using the tool is acceptable, just as long as you don’t use it to spam others.

Not only that, social media management applications such as TweetDeck and HootSuite make administering a Twitter accounts much simpler. Both have mobile versions, so you can take Twitter on the go and use it during the course of your day.

5. It Takes Time.

There is no quick ascent to the top of the social media ladder. Instead, it’s typically a steady climb where the same types of activities are repeated every day. Those include the following.

• Content creation. Whether it’s tweeting links to useful resources, making Facebook status updates or writing helpful blog posts, content creation is at the heart of any social media engagement strategy.

  I find it helpful to develop a content calendar, which can keep your postings on target and supportive of the main topics and keywords you wish to address. Bt there’s no need to plan a content calendar for more than a few weeks at a time. Things change quickly in social media and you will want to be able to adjust your content creation to accommodate such changes nimbly and efficiently. Having a long-term calendar may hamper your ability to do that.

• Growing the number of Fans and followers. It is essential, especially at first, to concentrate on growing your Fan and follower base, assuming you are using Facebook and Twitter, respectively.

  For Twitter, get started by following others first. Many of them will follow you in return. Relevance is key. You don’t want to follow everyone, but only those that it makes sense to do so. Included on that list are current customers, prospective customers, friends, vendor partners, those you already know and those who are following you. You may also wish to follow competitors.

• Community engagement. Fans and followers will expect you to have a personal presence within social media. They not only need useful information, but personal validation, as well.

  When they ask questions, leave comments or provide feedback in response to content you have created, customers will anticipate a response. Not only that, they count on that response coming sooner, rather than later. Tools like the ones mentioned above can help you stay abreast of conversations as they happen.

  You can use campaign-style tactics such as contests, polls, sweepstakes, special offers and games to accelerate growth. But, when the campaign is over the need for a long-term commitment to your community still exists. That’s where the most meaningful growth will come from, anyway.

6. It’s Here to Stay

Though it will constantly morph and change, social media is not going away. SocialBakers.com, a social research site, projects that Facebook should have over a billion users by the summer of 2012. Twitter currently grows at a rate of nearly a half-million new users per day, according to a recent post on Twitter’s blog . Even though Google’s attempts to create a social presence has failed in the past, its new Google+ social network appears to hold real promise, especially for businesses. Only a few weeks old, the site now numbers over 20 million users, according to The Telegraph, a U.K. newspaper.

It should not be a question of “if,” but “when” you will engage in the use of social media for marketing.

7. Have Some Fun

What’s better than getting to know your customers by face and by name? Many marketing tactics treat customers as if they are a number on a spreadsheet. Social media allows you to connect with them in a much more personal way. Have some fun getting to know your customers and enjoy the process along the way.

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