Last week’s Synch-Up blog (see below, April 6: “Measuring ROI”) post struck a chord with some members of a LinkedIn Group on B2B Social Media and I thought it was worth sharing.
Here is how Eric S replied to my blog post:
“This is great. While it doesn’t entirely answer the question I posed a few weeks ago to the group regarding measuring ROI of social, it validates some of my thought. In particular, it’s a time-intensive effort. It’s connecting dots. It’s figuring out if a sale was influenced by our social media engagement efforts. What my colleague @justinsf determined was that it takes old-fashioned investigation to determine if and how a sale was influenced. Very rarely will someone say “I saw you on FB and decided to call!” That would be nice but it’s not very likely.”
My reply to Eric
“Yes, Eric, “old-fashioned investigation” is a great way to look at it. That is, indeed, what proving ROI really entails. Unfortunately, some marketers might understand that to mean that it’s largely a guessing game and that would be a mistake. There is in fact a PROCESS for determining if and how a sale was influenced.
It’s part of the ROI Institute’s methodology. The process consists of five levels of evaluation: Level 1: Reaction, Satisfaction and Planned Action; Level 2: Learning; Level 3: Application/Implementation; Level 4: Business Impact; Level 5: ROI. Each level provides a foundation for measuring the subsequent level, creating a linked chain of events that builds incontrovertible credibility for the final ROI calculation. Each level involves multiple tools and calculations including crucial assessments such as “Isolating the Effects of the Solution” to be able to say with certainty how much of the business improvement (i.e., the “sale”) can be attributed to the solution (a social media campaign, an advertising campaign, an event, etc.).
As I mentioned in my post and as we all seem to agree, it’s a time and resource intensive prospect. I’ve applied the process to the annual meeting of one of my clients and the resulting report was published in “Proving the Value of Meetings & Events: How and Why to Measure ROI” by Jack J. Phillips, Monica Myhill and James B. McDonough. I’ve proposed applying the methodology to trade shows for several clients but we haven’t yet executed. Because it is such a resource intensive process, measuring to Level 5 (ROI) is realistic only for large or high profile events.
At the same time, elements of the process can be applied to almost any event, at a great deal less cost and time. (i.e., measure smaller events at just Level 1; medium sized events at Levels 1 and 2;, etc.) There are a great many individuals world-wide who are certified to apply the ROI Institute’s methodology to industry, manufacturing, education and training. I believe there are only a small handful of us certified to apply the methodology to marketing and events, but anyone can use the methodology to improve the measurement and evaluation of their event programs.