Lee Odden

Social Media ROI as Return on Influence #Optimize

Optimize Social Media ROIWhile the topic of return on investment with social media participation seems to polarize many marketing, advertising, and public relations pundits, there are a growing number of companies and agencies that are implementing social media marketing and analysis efforts to answer the question firsthand.

We’ve all read about or seen favorite examples going back to Dell Outlet selling a few million dollars worth of discounted computer equipment through Twitter, to Blendtec selling more blenders because of its YouTube videos showing what happens when a Blendtec meets an iPhone, or a rake. Of course, there’s also the famed Old Spice example of selling more body wash because of Isaiah Mustafa on a horse on a beach.

It’s About the Customers 

Besides those very viral and frequently shared social media ROI examples, there are also marketers that realize that it’s not always about selling widgets on Facebook or YouTube. It’s about the connections they make with customers being instrumental for recommendations and serving as inspiration to buy. It might not mean purchasing at the moment of social media interaction, but at some point in the future as the customer navigates the search, social, and mobile web.

It’s About Relationships

The value companies can get from investment in social media is directly tied to the relationships they build with customers and a relevant community. If a business wants to sell more widgets through Twitter, they could certainly achieve that goal providing they understand what information and experiences trigger those purchases and respond with an appropriate customer engagement plan. Whether Twitter is the sales channel or simply a proxy to the sales experience depends on the customers – not the brand’s objective of selling widgets on Twitter.

ROI is Also About Cost Savings

Sometimes realizing measurable business value from social media investment is a matter of creating efficiencies as some companies have by developing internal social network platforms that result in more effective collaboration and operational effectiveness. Those efficiencies often translate into better, faster, and more useful information for customers that result in cost savings or even more sales.

Measure What Matters

The better connections brands have with consumers, the more likely those consumers will be positively inclined to buy. Many social media ROI models are based on a direct marketing approach with an offer and response approach. The problem is that companies are chasing after a platform where relevant customers might be vs. understanding how to influence those customers through a social experience. The ROI from social media investment doesn’t have to come from direct sales through social networks, but that’s exactly how most companies evaluate.

It’s About Inspiration and Influence

A lot of productive social media marketing efforts are more likely to influence business outcomes than be the channel where those outcomes occur. Public and media relations, for example, isn’t that different. Positive media coverage creates awareness and inspires search or discovery of the brand and the sale occurs on the company website. Social experiences like influencer marketing programs can provide brand-advertising benefits and inspire consumers to buy sooner, more quantity, or more often, as well as to choose one brand vs. another. What company wouldn’t want to sell more products, more often, more quickly?

Here are a few interesting data points and examples that suggest a correlation between social engagement and consumer buying behavior:

  • eMarketer – Over 50 percent of Twitter followers are more likely to purchase from brands they follow.
  • USA Today – Coca-Cola Facebook fans are two times as likely to consume product and 10 times more likely to purchase than non-fans, according to Wendy Clark, senior vice president of integrated marketing.
  • Yahoo – Brands who sponsored content with social features increased purchase intent by 13 percent.
  • Mashable – “Following Brands on Twitter Increases Purchase Intent.” A study by Constant Contact and research firm Chadwick Martin Bailey reports that 60 percent of brand followers are more likely to recommend a brand to a friend after following the brand on Twitter, and 50 percent of brand followers are more likely to buy from that brand.

The missing piece to many assessments of what value social media participation provides is that most marketers are chasing popular platforms with their own interpretation of what will motivate customers to buy. What they should be doing is understanding customer preferences and optimizing for the kinds of social experiences that will not only inspire purchase, but social sharing, advocacy, and loyalty. Social media is a communications platform that can help businesses serve customer needs across the lifecycle, not just at the top of the sales funnel. Understand that and an entirely new opportunity is revealed.

This post originally appeared in my Social Media Smarts column on ClickZ.

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Lee Odden About Lee Odden

@LeeOdden is the CEO of TopRank Marketing and editor of Online Marketing Blog. Cited for his expertise by The Economist, Forbes and the Wall Street Journal, he's the author of the book Optimize and presents internationally on B2B marketing topics including content, search, social media and influencer marketing. When not at conferences, consulting, or working with his talented team, he's likely running, traveling or cooking up something new.


  1. Fantastic post, I really enjoyed reading it and I have to say this is exactly what I have been looking for myself.

    Once again thanks for the top quality writing.

    Mark McCulloch

  2. That’s a good point RodrigoV The data points simply show a correlation between those who are fans of a brand and their likelihood of purchase or referral vs those who are not fans.

    Would those customers have purchased anyway? Is the social connection enough to inspire more sales and referrals than otherwise would have happened? The key question is whether social engagement between brands and customers facilitates a lift in sales or recommendations that lead to sales – directly or indirectly.

    I do believe those brands who create a social presence and relationship with customers can see an effect on more referrals and sales for the same reasons that any other brand/customer communications influence those outcomes.

    From an agency standpoint we are living this reality every day with new business inquiries coming in every day via Twitter, Facebook, LinkedIn and our blog. That is in addition to inquiries on our website that were influenced by prospects consuming our content on social channels. We are also seeing these social engagement and new business effects with clients as well.

    In case anyone is wondering, it’s not speculation – it’s first hand observation that leads me to the conclusion about social media influence on sales.

  3. Really great tips and effective.Of course any business can get the investment in social media is tried to the relationship they build with their customer and also their communities.Through social media they can achieve their goal easily.

  4. Avatar iPhone App Developers says

    I am interested in the new Wahooly model and see the ROI (Return On Influence) being a critical aspect of whether that experiment will work or not. -Interesting times!

  5. Avatar Elsaker Killer says

    It is great. Thank you so much. The information is very useful…


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