how to make a business case for #socialmedia gain social media roi with crimson-hexagon
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How To Make A Business Case for Social Media
Dr. Natalie L. Petouhoff @drnatalie
www.DrNatalieNews.com
We are going to explore the 4 KEY Steps to Making a Business Case
Step 1: Define Business Benefits & Social Strategy – Start with one simple sentence – Determine ways that social analysis would help – Do the math with help from department heads
Step 2: Examine Project Benefits, Costs and ROI Step 3: Determine AddiIonal Benefits Step 4: Define Risks and UncertainIes
Using A Business Case Template:
>3.5 Billion pieces of content Shared / Week By 2020 à 450 Billion business transacIons / day
How can we make sense of all this?
People are Acting on Content
Aren’t the Benefits obvious?
CLEARLY, PEOPLE ARE SHARING MORE THAN EVER SOCIAL IS HERE TO STAY. SO WHY DO WE NEED A BUSINESS CASE FOR THE INVESTMENT IN SOCIAL MEDIA ANALYSIS?
• The first 2 phases driven by Innovators & Early Adopters
• They don’t need business cases to adopt something
WHAT’S SHIFTING THE NEED FOR A
SOCIAL MEDIA BUSINESS CASE?
We’re in the “third wave” of social media.
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The Third Wave is Dominated by The Early Majority Who Are PragmaMsts –
• They want proof • Love business cases
– Now deep insights are needed – Based on proprietary market research technology to:
• Know More • Know Why • Know How
Social Media Analysis has Evolved
To make sound business decisions…
Businesses need deep insights to drive business acIons – Who’s talking about the brand? – What’s being said about the products & services? – How are those online and offline conversaIons between customers affecIng the business?
– What can the business learn from these conversaIons? – What can the business learn from monitoring their compeIIon?
The Business Case Creation Process: ���How to Justify an Initiative
Define Gather IdenMfy Analyze Choose Implement & Measure
Define Project
IdenIfy & Align
Stakeholders
Set Goals, Metrics
Gather Financial Data
Document current state
Define Problems to
Solve
IdenIfy benefits
IdenIfy costs
IdenIfy risks
Create business case
Analyze Create ROI
Create selecIon criteria
Produce RFP
Evaluate vendors
Select soluIon
Measure baseline before
Measure acer for ROI
Refine & opImize
Gain consensus
The components ���of a quality ���
business case ���– a template
Table of Contents 1. ExecuIve Summary
• Background
2. Current Business • Business Problem To be Solved
3. Proposed Project • DescripIon/SoluIon to the
Business Problem
4. OpIons EvaluaIon Approach • Proposed opIons
5. Investment Analysis • Costs, Benefits, ROI • QuanIfy / Sell the Benefits
6. Risk Analysis & MiIgaIon • Change Management / Governance
Poorly communicaIng
the anIcipated payback / benefits of a project
to your stakeholders—CxO’s, Finance, IT, etc…
Is a sure bet to stop your projects from being funded…
Even projects you know
would strongly benefit the company.
BEGIN BY DISTILLING THE BUSINESS CASE INTO A SINGLE SENTENCE:
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“We will ___(DO SOMETHING = Project)_____ to improve __(A Business SituaFon)________, and our success will be measured by _____(Benefits as Measure by Metrics)____, which is worth ___(A Dollar Value)________.”
Example: “We will use social media monitoring analysis to gain strategic insights, And our success will be measured by averFng a PR crisis, Which is worth, on average, $2M for each PR crisis averted.”
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IN ALL SINGLE SENTENCE EXAMPLES…
This is the foundation of your business case and keeps the effort focused! AND -- You may find that you can garner benefits in other departments You can add additional sentences to your business case
YOU PUT A STAKE IN THE GROUND: i.e. – you say how you intend to use the social media analysis to produce specific business results…
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Example: “We will use social media monitoring analysis to gain real-‐Fme market research & insights, and our success will be measured by increased consumpFon (sales) & marketshare, which is worth 5% increase in sales equaling $2M.”
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BENEFITS FIT INTO “5” BUCKETS: To get more benefit, make friends in other departments!
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Revenue Tech investment leads to incremental revenue
Sales, Mktng Measured in incremental gross margin
User ProducMvity Tech investment leads to streamlined efficiencies
Department Head, and End User; Customer Service, Product Development…
Increased worker output, cost saving
Asset ProtecMon Tech investment protects against potenMal for loss or exposure
PR, Risk Mgt, Security, IT Measured as potenMal direct / indirect cost avoidance
Compliance Tech investment complies with gov't regulaMons
Legal Affairs, Regulatory Measured as direct cost avoidance
Capital Efficiency Tech investment allows for reuse & increased output for exisMng capital
Finance, IT, Dept. Heads Measured as increased output per capital investment, direct cost avoidance
Benefit Bucket Value Depts. Measurement
HERE’S THE HARD PART… DO THE MATH -‐-‐-‐-‐
QuanMfy each benefit idenMfied!
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What’s necessary? • Understanding actual departmental funcIons, costs and
their benefit(s) • Make friends with Finance and Quality • Can’t get to the math for ROI without it • Get input from departmental head(s) to discuss
operaIonal costs and social analysis opportuniIes • Vet with other departments – part of the change
management process – so down the line you don’t get resistance
HOW TO QUANTIFY A BENEFIT
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Example quesMons to ask yourself / Dept. Heads when quanMfying a benefit:
Q: What’s the benefit of having social media analysis in PR? A: Geong deep insights on brewing issues could help to prevent the need to have PR damage control Q: What were the costs associated with PR damage control? A: Decreased shareholder value, cost of effort to restore brand equity, resource/PR agency overIme costs, irreparable damage to brand
Q: What benefit bucket does averted PR damage control belong to? A: Cost avoidance fits into Asset ProtecIon benefit bucket
Therefore, Social Media monitoring analysis, from a PR perspecIve, is protecIng assets: i.e. earnings & shareholder value …
PR Crisis Recovery ROI CALCULATION
• What is the cost of a PR Crisis Recovery? • Impact to annual revenue /shareholder value? • Revenue lost / week during PR Crisis? • Length of PR Crisis without social media
monitoring? • Length of PR Crisis with social media
monitoring? • Cost to restore corporate brand reputaIon /
equity?
= – x 100
• People: Staff Salary (exisIng) • Process: Training to use the system
(3 days) • Technology: Social Analysis Plarorm
ROI
On average research shows: Benefit: $2M to restore the brand’s reputaIon Investment: (1 year) = $5,000/mo x 12 = $60K
ROI = $2M – $60K x 100 = 566% ROI $60K
4 KEY Steps to Making a Business Case
Step 1: Define Business Benefits & Social Strategy – Start with one simple sentence – Determine ways that social analysis would help – Do the math with help from department heads
Step 2: Examine Project Benefits, Costs and ROI Step 3: Determine AddiIonal Benefits Step 4: Define Risks and UncertainIes
Using the Business Case Template:
Examples: Use Cases For
Social Media Monitoring Analysis
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Consumer Brands: Measuring Intent
Use Case: How does consumer behavior respond to corporate actions or other events?
Business Application: Change activities based on
impact; investigate correlations with other data sources.
Advertisers: Campaign Effectiveness
Use Case: To what extent did a specific campaign meet its objectives?
Business Application: Design future campaigns
accordingly; gain visibility into elements of ROI.
B2B: Consumer Views on Industry Trends
Use Case: What risks or opportunities exist in industry-level conversations?
Business Application: Determine whether / how to
participate in high profile issues.
TV Media: Fine Tune Promotional Content
Use Case: What programming elements drive passion from fans online?
Business Application: Design or tweak promotional
content in order to highlight most engaging topics to audiences.
Brand Audit - PR Use Case
SAMPLE CLIENT: A $200B global innovator that puts “imagination to work” to make a better world (Crimson Hexagon serves 16 divisions)
QUESTION: What is happening to our brand? Develop a framework for social media crisis analyses & communications by analyzing three crisis affecting the brand over a 9-month period:
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OFFSHORING JOBS TO CHINA
TAX BREAKS IN A BAD ECONOMY
2
NUCLEAR ENERGY SAFETY CONCERNS
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INSIGHTS and ANSWERS ANALYTIC FINDINGS:
A. Meaningful negative sentiment over horizon B. Greater negativity toward tax issues vs. outsourcing
vs. nuclear energy concerns C. Bigger crisis was one of politics, not a single event,
impacting brand perception relative to competition
“I don’t think there is any question that the audit had a real impact on how people understand the brand… It’s fair to suggest that Crimson Hexagon has had a hand to play in our re-positioning."
CLIENT FEEDBACK:
A
C
B UNEXPECTED UNEXPECTED, UNINTENDED
How to make a business case for
Social Media Monitoring Analysis Dr. Natalie L. Petouhoff
@drnatalie www.DrNatalieNews.com
THANK YOU
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