• Social Studies Blog. How to succeed in social business.
  • The ROI of Social Media

    Social is clearly playing an important role in business. Most marketers agree that social media has added value to brand amplification, yet not everyone is clear on how to track the value of social media  when it comes to impacting revenue. What has not paid off is using social as yet another advertisement channel vs. using it to build trust and transparency with customers.  As we kick-off Pivotcon  this week in NYC, we can reflect on the words of event producer Brian Solis:

    “Social media is no longer just about marketing. It’s a game-changing, organization-wide business imperative that requires a unified approach, from the top down and the inside out. To survive in this new business landscape—the Social Construct—you must move from a “Social brand to a fully engaged, fully informed Social Business.

    To be a social business means to incorporate social into your entire customer process,  and to learn how to generate business using social technologies.

    In looking at revenue generation from social, companies with e-commerce sites should have the easiest job drawing a correlation between Facebook and actual ROI. However research shows that social media under-performs as a referrer to e-commerce sites.

    It’s no surprise that Altimeter Group reports 70 percent of social marketers don’t know how social media connects to revenue. For most brands there is no revenue to be found.

    According to this recent blog from Marketo, “the ROI of Social Media Ads,” social media isn’t bringing much ROI at all.

    On the Marketo blog, Jon Miller VP of Marketing, Content and Strategy gives a complete break-down of the performance of Marketo’s social media ads and sponsored posts.

    “Facebook Ads and Sponsored Stories are not working well for us, with an Investment per Target of $161 and a ratio of pipeline to investment barely above 2.0. Across all ads, we’re paying $0.28 per click and $0.44 CPM, though the CPC range is as high as $2.00 and as low as $0.03.”

    If Marketo, the leading provider of cloud-based marketing software, doesn’t have a strong ROI from Facebook, who can track their revenue from Facebook? Where is the ROI?

    Recent research conducted by Incyte Group shows us consumers want direct connections with companies and other customers in branded customer communities.

    These communities are tightly integrated with the company website, are proactively managed by companies, and offer a way for people to share information with like-minded friends about the products and services of a company. That doesn’t mean the company always controls the conversation, however the company provides the forum for the conversation.

    Customer communities generate significant return on investment because, unlike Facebook engagement tactics, a customer community is an engine for generating content that’s relevant to consumers based on their stage in the customer lifecycle.


    Kiddicare, the largest baby online retailer in the UK is one example of a company that made its website more social with the use of a community. Kiddicare brings relevant customer conversations about each specific product and embeds it next to each product on their e-commerce site.

    Simon Harrow, Chief Operating Officer said, “We use Get Satisfaction integrated in our e-commerce product pages, allowing us to solicit customer feedback and offer customer feedback on every product page. This relevant customer generated content is pretty powerful for shoppers who are considering our products.”

    The overall ROI was 1,000 product champions signed up per month, 30 percent reduction in calls to customer support center and a 38 percent increase in first call resolution rate.


    MonaVie burst onto the scene in 2005 and has quickly become a leader in the health and wellness industry. Currently operating in 22 countries, MonaVie is one of the fastest growing companies in the world, as evidenced by its ranking in the 2009 Inc. 500 list of fastest growing companies.

    Get Satisfaction gives MonaVie distributors a place to learn from each other as a community, and ultimately increase the satisfaction and thus the value of each MonaVie customer.

    “Users of the community are 25 percent more satisfied and more loyal than those customers that are handled exclusively through the traditional channels,” said Jake Larse, MonaVie Contact Center Managing Director.

    These case studies are further proof that to build authentic relationships with customers, companies need to engage with customers at every stage of the customer lifecycle and not just on social networks.

    That’s why customer communities should be an integral part of every company’s social strategy to see real and powerful ROI.

    Subscribe to the Social Studies blog for the tools to unleash the power of customer conversations.

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    Wendy Lea

    About Wendy Lea

    Wendy Lea is the CEO of Get Satisfaction. Wendy currently serves as an angel investor, strategic advisor and board member for a long list of startup companies. Wendy chairs the board for women’s entrepreneur group Watermark and serves on the board of Silicon Valley Social Venture Capital (SV2.org) and Corporate Visions. She has been recognized as a Top 100 Woman of Influence in Silicon Valley and was awarded the Watermark’s “Woman Who Made Her Mark” award.


    1. Azita, thanks for such a thoughtful article. You got right to it referring to Marketo’s social media return on investment when you cited their ADVERTISING spend. We know that only a tiny percentage of people click on ad and sponsored content compared to ‘real’ content. Why is that? Because 21st century consumers are internet savvy and can tell the difference between informative, entertaining content and content that screams BUY MY STUFF. Seth Godin calls this “permission marketing” and potential customers will happily exchange their contact details and permission to communicate with them for this kind of content that is useful to them.

      Chris Markham

      • Hi Chris, You’re absolutely right. People are tired of being “sold” to on social media, but they do want educational, informative content that’s related to products and issues they care about. There is a huge opportunity for content based marketing….But it has to be relevant to what the consumer cares about, not just a marketing message broadcast. ~Azita

    2. Good write-up. I certainly appreciate this website.
      Keep writing!

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