Using a different measure, chip maker Intel says its blog for partners, Channel Voice, has decreased costs by eliminating the need for expensive in-person events.
Procter & Gamble used media mix modeling –which analyses sales data to determine the effectiveness of the marketing mix – to demonstrate that the community of teenage girl-orientated advice site, BeingGirl.com, is several times more effective at driving sales of its feminine hygiene products that its television ads.
The results underscore the value of social relationships as indicators of future sales, even though the exact engagement-to-sale trajectory is not mapped.
The dilemma for leaders is that these social relationships are powerful, whether or not their company chooses to participate in them.
From the start of the internet, people began sharing shopping experiences and recommending for or against brands just like they do in conversation.
The worldwide decline in trust towards institutions meant people stopped believing what companies had to say about themselves some decades ago.
Instead, the rise of peer-to-peer trust (which is still increasing) meant recommendations from friends started having a broader reach than in the past. A 2011 IBM study shows consumers creating as much information every two days as they did in the period from the dawn of civilisation to 2003!
Those recommendations were being made in social networks where corporates were noticeably absent – at least initially.
Some parts of the whole
A simple search will provide companies with detailed consumer sentiment and trend data that allows them to track what keywords are used to find products and which of those lead to sales. Strategies can be refined accordingly.
Data mining is another option: it allows businesses to compare comments on products by different providers and aggregate these with ratings and reviews to better understand what customers want and how their competitors are faring.
Location-based data also allows businesses to pinpoint where conversations about their products are happening and identify potential new markets; growth in these areas would provide further financial measures.
Another powerful tool is data-driven web optimisation, which allows data to be tested, analysed and measured.
For example, market research company eMarketer improved its subscription conversion rate by 53% by removing the price from the description after reviewing data that showed reader preferences. It is possible to measure what it costs to get this benefit against achieving the same results by conventional means.
Online feedback on products also allows companies to quickly refine their offering or approach.
One financial services company increased lead generation by 40% though better design and by delivering content that focused on the benefits of the product while reducing non-essential information as a result of information it had received directly by engaging customers across multiple platforms.
In all these examples the cost of acquiring data by other techniques including using large teams to cold-call clients can be expensive. The cost saving could be used as part of the ROI measure of the project.
Top-line benefits
As far as campaigns are concerned it’s possible track the journey of a customer from click to click, although this tells us about the influence of a specific campaign rather that the factors that influenced the lead-up to a decision.
However, we do know that engaged communities lead to sales down the line.
American health and nutrition retail company GNC is an example of a store that built online communities interested in health and provided experts to answer questions at no cost, and without directly chasing sales.
The initiative created a “halo effect” of positive sentiment that ultimately helped anchor people to the brand and converted to sales over time.
Because B2B is immersed in the same social and mobile ecosystem of customers, suppliers and competitors, the need to create positive impressions online is just as critical, perhaps more so since 60% of the buying circle is over before a prospect makes contact.
B2B companies have much to gain by providing value to prospects and they can do this by generating useful content such as ebooks. Offers that prospects can act on is an effective way to generate leads and that can be measured.
And while existing B2Bs have made a slower transition into the social space than consumer brands, given the rise in participation globally, their involvement is inevitable.
Peer-to-peer conversations influence behaviour and in an environment in which these relationships are more trusted than anything else, businesses must take notice of them even in the absence of a perfect measure of ROI for all aspects of social media.
Dionne Lew is the founder of The Social Executive, a consultancy helping organisations build strategic advantage by harnessing the network impacts of owned, earned and social media.
