Convince Clients of Social Media Marketing through ROI

There are some companies that are still unable to understand the true value of social media for their business. Now there is a better way to convince them, in a language they understand: ROI.

A recent study (pdf), conducted and published by Syncapse, examines social media in terms of ROI.  It does this by quantifying and understanding the impact of social media marketing investment on the top 20 brands on Facebook. The findings were pretty interesting.

This is particularity important, because quantifying the ROI of Facebook marketing efforts might change how we present social media as a marketing strategy to our clients.

The study examined the five leading contributors to Facebook fan value.

(1) Product Spending (2) Brand Loyalty (3) Propensity to Recommend (4) Brand Affinity (5) Earned Media Value.

Significant Findings:


· Fans spend an additional average of $71.84 on products for which they are fans compared to those who are not fans.

· The average value of a Facebook fan was $136.38. On a McDonald’s fan base of 2,232,328, the worth of annualized value would equate to $580,003,461.

· No two brand’s fan values are the same: Fan value of BlackBerry ($83.98) versus Nokia ($180.87).


· Fans are 28% more likely than non-fans to continue using the brand

· 42.5% of fans indicating a heightened likelihood of continued product usage


· 81% of fans said they feel connection/empathy with the brand, compared to 39% of non-fans

· 87% said they felt warmth, gratitude, happy or satisfied, compared to 49% of non-fans

Word of Mouth:

· Fans are 41% more likely than non-fans to recommend a fanned product to their friends

· 44% Likelihood to try a product if close family member or friend became a fan

· 68% of Facebook fans indicated that they are very likely to recommend a product (One of the highest was Victoria’s Secret with 79.4%)

Shaping Fan Value:

· Factors influencing and impacting fan value include: Product price, purchase lifecycle, sales penetration, brand health, product health, Facebook marketing success, loyalty, spending, fan acquisition cost, affinity and media value.


Key Takeaways for Digital Marketers and Their Clients:

· Frame It In $$: More and more, we should present social media marketing to clients in terms of ROI, ##’s and $$. This allows us to demonstrate the power of this marketing platform in a business language most can understand.  It also portrays social media in a context that makes good financial sense. “Social media can make you money”

· Digital Deep Dive: This study, along with specific case studies should act as a digital gateway, by helping us in convincing clients to dive deep into social media strategies and allocate a bigger budget for social marketing.

· Act Now, Look Later: Social media marketing is a long-term process which aims at building networks of loyal and brand hungry consumers.  It might be comprised of various short-term campaigns, but brands must have a long-term view of social ROI

· Online Efforts Boost Offline Sales: The 20 brands examined in this study rely on offline sales to succeed. They use social media to drive offline traffic into their stores.

· Social Actually Works: The more you reach, connect, and effectively engage audiences on social media, the more you increase:

1. Long-term ROI

2. Brand perception and awareness

3. Brand loyalty, connection & repeated purchases

4. Organic marketing (facilitated online word of mouth)

· Ask Why?:  Finally, we should be able to easily explain to clients that “There is a reason why these big brands are pouring millions in social media, and moving away from traditional media:”

1. Cheaper and more effective than most mass media marketing

2. More targeted and audience specific

3. Generates added brand empathy and connection with consumers

4. Provides consumers access to the brand, anytime, anywhere and at their fingertips

5. Allows consumers to market & recommend brand products themselves

6. Timely and compelling, moves consumers to take action

7. Allows consumers to engage with brands in a FUN WAY (and not interruptive)


Connect with Haysam on Twitter: @hisom