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>> So, Randy, let's go to this sort of ping point that you raised.
>> Yes.
>> You wrote this wonderful book.
And I say that not because you're sitting here,
because I say it when you're not around.
And, and it was wonderful because there were a whole lot of basics and a whole lot
of examples that taught me and anchored many of the things we've covered thus far.
But the big point was people do social, and your book is entitled this,
you know social integrated marketing communications, social IMC.
But then, in the title you talk about ROI, return on investment.
Right.
>> I was stunned to find that people mount money, time, effort to do social and
they make, they don't think about what the return on investment should be.
Or they use something that is meaningless like,
how many people glanced across a page?
>> Right.
Talk to us about return on investment, ROI.
What is it?
How do you really get at it?
How do you make it happen,
because it seems to me without that we shouldn't be doing any of this?
>> Well, well that's true it is a major concern.
In fact IBM does yearly studies of CMOs and CEOs.
>> CMOs, Chief Marketing Officers.
>> Chief Marketing Officers and Chief Executive Officers.
>> Right.
>> And what they find is,
is a return on investment from social is one of their primary concerns.
They see that they're pouring more and more and more money into content, but
they say okay, where are the purchases coming from?
In fact, that's where I started a decade ago.
Where one of my students said okay, I get the idea of viral, but where's the ROI?
And so the, to understand it, it's really fairly straightforward.
If you don't ask people for a relationship,
then there's no way to directly measure return on investment.
In other words, you're going to be investing money into content, but
you don't really know if it's producing sales or donations, or whatever you want.
>> Support. >> You want as your success
metrics, right?
And so the key is that if you're the anonymous engagement,
what you're going to be doing is using post-purchase surveys.
Hey, did you remember, did you go to our social site, yes or no?
You're going to be doing focus groups or some sort of live chats, where you're
hoping to, to close that loop, but you probably won't be able to do that.
The thing I like about the last two strategies, nurture and
private virtual communities, is that they require the visitor to make a commitment.
They have to give you their email address, perhaps a password.
They're going to also create a profile.
And because of that, we can take those last two,
and connect them over to our sales and marketing systems, or
our donation systems, to actually calculate an ROI.
I know I spent x on social.
I know it brought me these many people to the social site.
And of those, these are the numbers that actually tie over.
And so what it does, it allows you to build what we call a performance funnel,
or a relationship funnel.
Essentially, if you think about it, for
every audience there's a total audience size.
Then there's a total social audience size which we can quantify.
And then we're asking them to go on a journey with us.
We're asking them to come to our landing page, we're asking them to register.
And then after that, we're going to send them some things.
And then we're going to go through, and
eventually it'll come down to a donation, or a, a purchase of some sort.
Now we have a funnel.
Because I know how much I spent, and
I know how they went down through the funnel.
I know many, how much dollars, how many dollars are at the bottom of the funnel.
Now I can calculate my return on investment
to see if this is actually something good for my company.
And so the beauty of that is that I can do two things.
One is if I go through each step in the relationship,
as you see the funnel on the screen, I can go through and calculate
the percentage lost from step one to step two to step three to step four, and so on.
Which allows me to then figure out how efficiently my funnel's working.
And so for example, let's say that I don't have as many people going from
the landing page to registration as I want.
Well now I can go back and look and say, well maybe on a mobile phone that the,
the actions which is something they don't see, or
maybe it doesn't quite work the way we want it to,
I can test different options to improve the efficiency of my funnel.
In addition to that, I can also look at the effectiveness.
In other words, given the size of the market,
here's a percentage of market share that came to my landing page, and
here's how many became the final purchasers.
Now I can say how effective is that entire system.
What that does is it gives me metrics that I can measure every single day,
to know whether it's going to be producing the kinds of returns we were expected.
And if it isn't, I now can do some sort of testing
to improve the performance of the relationship funnel.
So it gives me total measurability and total trackability,
using both the nurture or the private virtual community approach.
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John LavineFounder, Professor and Director, Media Management Center
Candy LeeProfessor
Randy HlavacLecturer, Medill IMC; CEO, Marketing Synergy Inc
