The 5 Golden Rules of Social Media ROI
By Marco Saio
Facebook page? Check! Twitter account and dedicated hastags? Check! Competitions, discounts and giveaways? Check! Any real, measurable and abundant ROI from social media campaigns? … erm, guys?
One respondent eloquently describes the ROI dilemma faced by travel marketers; 'For all its potential, social media keeps me up at night.. It feels a little bit like jumping in at the deep-end without arm-bands and being expected to swim like Michael Phelps '
With this in mind, I took 3 social media experts to task on how travel brands can move beyond deploying social media for 'engagement' or to 'raise awareness' and instead concretely generate incremental revenue and real ROI. Excerpts below;
Josiah Mackenzie, Hotel Social Media and Review Analytics for Service and Sales
Identify where social media will save you money
Social technology can increase efficiency. Data shared by SimpliFlying at the EyeForTravel Social Media Strategies Amsterdam 2011 conference indicated its seven times cheaper to serve a customer on Twitter than in a call centre. Using social media and review analytics could also save you substantial amounts of money in customer surveys, business intelligence, and market research. Exposure from social campaigns could replace some of your investments in advertising and PR, saving money from budgets there as well.
Count inbound leads from social media
Many hotels are using social media listening tools to pick up on conversations with people looking to buy what they are selling. Dan Sherman made a $70,000 sale off a Facebook referral. There are more sophisticated metrics related to sales - such as time to closing and average order size of a socially engaged customer - but begin with counting leads. Hubspot research showed companies that blog generate 88% more inbound leads than those who do not blog. What does this look like for your situation, and on other social networks? How is social activity affecting your lead volume?
Measure for sales conversion improvement
Social media - and online customer reviews in particular - play a key role in optimizing sales conversion rates. PhoCusWright found that OTA shoppers who visit hotel review pages in OTAs are twice as likely to convert. Jennifer Davies from Expedia had more specifics: "On Expedia.com, good reviews of 4.0 or 5.0 generate more than double the conversion of a review of 1.0 – 2.9." Brian Ferguson, EVP at Expedia, quantifying the ADR impact as well: "A 1 point increase in a review score equates to a 9% increase in average daily rate (ADR)." Measure the increase in revenue directly attributable from using social media in the sales process.
Track progress towards business KPIs and strategic objectives
Insights from the social web can play a key role in reaching strategic business goals such as improving guest satisfaction or increasing the percentage of direct bookings. When you understand the financial impact of reaching larger business goals such as these, quantifying the contribution of social media towards reaching that goal becomes easier.
(EyeforTravel and Greg Tilston published a good overview of social KPIs on the EyeForTravel blog.)
"The online reputation of each of our brands is a key success indicator for us. Online reviews not only give us insights into our daily operations, they also directly influence our revenue and profitability." – Luis del Olmo, EVP and CMO of Melia Hotels International
Driving email newsletter subscriptions? Need to increase the number of inbound links to your website for SEO purposes? Want to increase visitor time on your website? Campaign or project-based ROI might ultimately be the best measure of return on investment. Especially if you compare the cost associated with reaching a goal with what it cost you in the past using other tactics. Martin Soler at WIHP wrote a good article if you want to learn more about this: http://www.searchenginejournal.com/industry-discussion-the-true-nature-of-social-media-roi/39421/
Morris Sim, Co-Founder of Circos Brand Karma
Get your social business from Friends of Fans (FoFs).
There are a lot more of FoFs than fans, and your fans' referral will mean a lot more than if you try to target them directly.
Pay attention to user-generated content (UGC).
Monitor what's being said with text, photos, and videos. Know how your brand is being perceived in real-time as well as evergreen UGC.
Content from meaningful conversation is king, and no one likes to be constantly reminded of offers and discounts. Imagine if you're conversing with your date and in every other sentence s/he tries to convince you to move in and help with rent. A big turn-off!
Have a plan for dealing with emergencies.
These days, crisis could occur at any point even if you do everything perfectly. So it's time to update the emergency response plan and take into account the many-to-many nature of social media. Once the staff trained, make sure you do regular practice runs!
Develop a relationship with Gen Y/Zs.
They are highly influential. More than half of the world is under 30 and they are the new movers and shakers. Everywhere from Cairo to Wall Street they're banding together to make their voices heard, and in some cases, overthrowing institutions. Get to know them. They're your future customers and staff.
Barbara Pezzi, Director Analytics & Search Optimization at Fairmont Raffles Hotels International
Start with a goal in mind before you embark in any activity.
If you do not know what it is that you are trying to achieve, it becomes very hard to measure how successful you have been. The same applies to ROI. If your social media strategy does not have ROI in mind, it is very unlikely it is going to produce any. Ultimately, not all social media activities will have an ROI or a financial outcome. However, it is important that all stakeholders agree if a financial gain is expected and if so, a relevant strategy put in place.
Without accurate benchmarking it is very difficult to establish correct ROI.
Take records of your key metrics before, during and after your social media campaign so that you can correctly establish the impact of your activities. Keep a written schedule of all your activities on the various social sites for correlations and further analysis. It make historical analysis much easier.
Philosophical debate aside on whether social media should have an ROI or not, if you are required to report on it, stick to its financial definition and financial metrics.
Makes sure you take into account savings in your profit calculation but do not create or use intangible "made up" metrics like the ROI of a Facebook like or a twitter follower. It is a simple case of costs vs profits. If the investment is in $, then so must be the outcome, not followers, likes or clicks.
Have a measurement strategy in place.
It is almost next to impossible to accurately measure any activity if no tracking has been put in place in advance. Ensure you social posts and links are tracked with campaign parameters, as you would do with your PPC campaign, familiarise yourself with the analytics tools provided by each social platform when available (ex: Facebook Insights), establish your Key Performance Indicators. You are not measuring the activity, like how many followers did you gain this week or how many times you posted, but the outcome.
Accurate measurement takes time and discipline.
Start by utilising tools freely available such as Google Analytics, before you start investing in a proprietary tool. Set actual numeric targets against your goals, measure accordingly and act based on targets and results. Measurement is not the goal. The goal is to derive actionable insights. If you do not have a solid analytics strategy in place, and the human resources to manage it, even the most expensive sophisticated tool will be next to useless.
International Marketing Co-ordinator
Phone: +44 (0)207 3757163
EyeforTravel is an online travel intelligence provider to hotels, airlines, online travel agents, cruise, car hire firms and more. Established in 1997 by Tim Gunstone, right at the inception of online travel, the group offers a diverse product portfolio including industry analysis, insights, research, webinars, reports and conferences. From major hotel brands to new startups, EyeforTravel helps its 80,000 strong customer base make better decisions, build better brands, close the most lucrative deals and ultimately sell more of their product.
For more information visit www.eyefortravel.com.