The metric of ROI is losing its weight within the social space and giving way to ROE or Return on Engagement. With the rise of social networks how does ROE apply to B2B enterprises? Dave Howell reports
How to measure the social activity that B2B companies are involved in has been a contentious issue since the inception of social networks. Applying the traditional metrics of ROI or established KPIs failed to deliver the meaningful insights that businesses were looking for. In the brave new world of social marketing a new way to measure the effectiveness of campaigns was needed.
The current measurement of Facebook engagement for instance has been called into question. Wisemetrics have analysed the current Facebook metric and found it to be lacking in some areas, proposing that an additional metric – which the company details – should be used instead.
Addionally, Social Bakers adds their own angle on how social metrics should be calculated stating: “We at Socialbakers believe and our clients’ successes stand as proof that the best way to compare social performance is to analyze Engagement Rates. The beauty of this calculation is that it can be applied for any social network that uses public data, such as Twitter and Google +!” Social Bakers propose these formulas for engagement rates:
Businesses can use the metrics that are currently available, but what is clear is that for specialist tracking some form of bespoke approach will be needed. For businesses operating in the B2B space, these metrics could be evolved to be highly specific, but would then deliver reliable insight into the social activity and the return taking place.
For all businesses in the B2B sector, evolving their social media and how its results are tracked is a top priority. As Christine Crandell writing in Forbes states: “Lessons learned along the way brought the end of social media and shaped the next era. Using Facebook for customer support or as a B2B sales channel was a great experiment that didn’t really pay off. Yet it fundamentally changed the balance of power between the buyer and seller as well as redefined how work gets done. The next stage of social’s B2B evolution focuses on ROI not because it is ‘cool’ but for the significant leverage it can have on achieving business objectives.”
Developing an insight into the value that social media can bring to an B2B organisation takes time and effort says Sandy Carter, VP of social business sales at IBM: “Realizing a meaningful ROI depends on how you deploy social. The key to remember is that you will not see results out of the box.”
But can businesses actually place a value on the social media activity they are spending resources on developing? Two companies think so. Bulmers recently stated that a Facebook fan was worth £3.82 per week to the company. How did they come to such an accurate figure? Their research carried out by TNS was crude and had a number of caveats including the likelihood that Bulmers fans who interact the most with the page would have a clear bias towards the brand and would have been the most likely of all our fans to see the status update calling for people to complete the questionnaire. Nonetheless, these results are extraordinarily positive.
And another company that has come out with figures based on its use of social media is Eventbrite that last October looked closely at its exposure on Facebook and Twitter claiming that the former generates £2.25 in additional gross ticket sales on average with the later worth £1.80, with the business network LinkedIn coming at £1.24.
Says Vanessa Hope Schneider, Eventbrite Senior Public Relations Manager: “Social media is really important for Eventbrite—both as a brand, and as part of our product offering. One of the ways in which Eventbrite was able to spur early exponential growth in our user base was to be one of the first partners with Facebook, back in 2008. Our founders saw that people were copying event information from Eventbrite events and posting it on their Facebook walls. We wanted to make that process of sharing far easier, and when we integrated Facebook sharing into our platform, growth really took off. Facebook is now the #1 driver of traffic to our site, which makes sense, because Events are inherently social.”
How B2B organisations approach their development of social media metrics will need to be more holistic, as by their nature, these networks offer a plethora of data, all of which will feed into the equation. Recently the Altimeter Grouplooked closely at ROI in the context of social media.
Susan Etlinger, an industry analyst with Altimeter Group said: “In our research for this report we identified six primary qualitative and quantitative approaches and developed three case studies that illustrate how organizations measure the impact of social media on revenue. But while these six ingredients are consistent, the emphasis each company places on them depends on the nature of their business.
“There is no “one-size-fits-all” approach. The following pages aim to identify and describe — based on business, product, media, and customer type — the most effective “recipes” for measuring the revenue impact of social media that we have seen adopted to date. The volatility of social data and the pace of change mean that tried-and-true measurement methods are no longer enough. Social data is different. The old rules don’t apply.”
A healthy ROE can be quantified, but in an age of social media, the results of the ROE will be different for each company. And perhaps this is the crux of the mater when social media metrics are considered: It’s impossible to use an off-the-shelf approach. For B2B companies in particular that may be trading in highly specialised sectors, the ROE metrics they develop will have to be themselves highly specific to reveal the returns that each company is expecting.
Jan Rezab, SEO, Socialbakers
A Many are watching it live, nurturing their communities and seeing them grow. Others are seeing the results directly through increased sales or contacts. And some don’t really care as the investment is low and they can afford to play around in the space without making full use of it.
Q Is ROI really appropriate for the social space? Is ROE (Return on Engagement) more useful? But how can companies measure this ‘engagement’?
A ROI is important to any business. Social media campaigns, provided they have built an audience to speak to, are much more cost effective and have greater impact than any traditional advertising, be it television, outdoor or print. Traditional advertising, no matter how finely targeted, is ‘push’ publicity. You’re pushing something on a random group of people regardless of their interest in your product, your pitch or your offer.
This irritates people, it bothers them, they see it for what it is: advertising, a sales pitch and they tend to tune it out. Social media is ‘pull’ advertising. You provide a space for a group of people that have self-identified as having an interest in your brand. They want to know about your brand, your product, your company. You are speaking to the choir at that point. They, in turn, can share that information with their networks, provided they determine it would be relevant to others.
Regarding B2B, traditional marketing is limited to trade shows, trade mags, or a slick website, among few others. Word-of-mouth and established reputation is the best means to secure a deal in B2B. Word-of-mouth is offline social media. With social media, reputation is established openly for all to see and comment.
ROI in social media is ROE. There’s little difference. The level of engagement in your message or medium is your first metric. Then the actual return can be measured in terms of increased sales, increased customer loyalty (less turnover), or even more engagement, ie. more posts, more comments, more shares, more fans. All this leads to a wider, yet more dedicated customer base. When you listen to your customers, they tend to pay more attention to what you actually have to say.
Q For B2B companies is ROI from their social media activity more about improving their influence within their particular market segment?
A Not exactly. It’s about having a group discussion and working together to create products and services that better serve your customers and ultimately your bottom line. Hopefully, you’ll allow your ‘market segment’ to have a greater influence on you.
Q Are there any particular tools that B2B companies can use to measure their ROI across social media?
A Absolutely, and we make them. Analytics Pro allows you to track, compare and maximize your social media ROI, while Builder Pro allows you to manage all your social media networks, campaigns and relationships in a single integrated tool.
Q What is your key advice to B2B companies as they develop their metrics for measuring ROI from social media?
A If you don’t spend time in your social media space, your customers won’t either. Make it interesting. Add value. Make it worth their while to become more engaged with you. And most importantly, listen to them and incorporate their ideas and feedback into your business at any level.
Q Do B2B companies try and apply social media that is really more appropriate for B2C (Facebook for instance) when other social networks would be better exploited?
A Any company just needs to be relevant to their audience, regardless of platform. They need to choose the platform that best suits their needs as well as those of their customers. They need to create the space where their customers feel comfortable in coming or go to the space where their customers are.
Work smarter, innovate, listen to your customers, be adaptable, use all of the resources at your disposal. Don’t be afraid of taking a chance. Build relationships and reputation. Be responsive and responsible. And be accountable and reliable. Breathe.