Social Media, ROI, Metrics and Petsmart
There is much talk in the blogosphere and Twittersphere lately about how to measure the importance of social media when using traditional metrics and ROI (Return on Investment). My position is that if you’re operating a business and cannot figure out a way to measure your social media activities as they relate to the bottom line, then hold off on getting heavily invested in such activities until you can do so. Social media is a channel for communications, and like many traditional communications channels it can be difficult to measure success, especially if you haven’t got a goal or an understanding of the culture!
Fluffy Metrics
Fluffy metrics are things like brand awareness, blog mentions, Re-Tweets, clicks, subscriber stats, Facebook friends, and engagement. Unfortunately, there is no real scientific formula that says, “If you are mentioned in Blog X, you will be seeing a certain percentage of increase in the bottom line over the next quarter.”
Now, lets clarify here that the above items ARE a set of metrics. You can measure blog mentions, Re-Tweets, clicks, subscriber stats, Facebook friends, and engagement. (monitoring) The key is, “How does this relate back to real ROI that you can put up in a slide presentation to your share holders?” At the end of the day, these stats all mean NOTHING without context.
The ROI Problem
Besides the fact that ROI is a much-hated acronym in the new media space, it is a real concern! Even the largest of companies don’t understand how to generate measurement metrics is this Wild West of social media.
I was sent a message today via Twitter from @jw_social1 that alerted me to a tweet by Jeremiah Owyang, from the Forester Research Interactive Marketing Forum:
@jowyang Petsmart says they “get social media but don’t know how to measure it”, they aren’t alone.”
I am going to go out on a very thin limb here and say that Petsmart has very little experience in the new media arena, and should probably hire a firm like The Advance Guard or New Marketing Labs to try and help them figure out a way to effectively measure and generate social media activities. I will go out on an additional limb and say that a huge percentage of Fortune 1000 companies are sitting in the same boat. Setting up a Twitter account and a Facebook fan page are just spokes on a much larger and more complex wheel.
Possible Solution to the Petsmart Problem
Let’s help Petsmart close the loop on how they might be able to create real metrics and ROI using social media!
Petsmart, like most major brands, are seeing folks flocking to Facebook and Twitter, and therefore would like to reach people through these venues. The first thing they need to understand is that all social media engagement is opt-in and completely voluntary. If you begin to shout a message at people, they will simply opt out and forget you ever existed. As I stated in The Business Within Social Media – The Dozen Don’ts, rules #2 and #4 are very relevant to the fact that people don’t like to be treated as targets, nor do they like to be shouted at.
With this rudimentary understanding in mind, let’s build a hypothetical social media program for Petsmart that includes trackable ROI.
#1 Partner With and Enable Trusted Sources
Companies and brands are latching on to social media right now because it is getting a ton of mainstream attention. (Thank you Oprah.) However, this form of reaching people on the web is not new. There are many, many passionate individuals and small organizations that have been using social media to reach out to folks who would have a natural interest in their products or services.
How does Petsmart do the exact same thing? Well, a simple Google search for pet podcast brings up a bevy of shows run by passionate pet enthusiasts and pet care professionals that already have an engaged audience. Some of the results I see are:
Pet Life Radio
The Pet Podcast
All God’s Creatures Pet Podcast
Pets on Board
This doesn’t even include the subset of podcasts and blogs that talk about more specific pets like birds, dogs, and cats. The options are nearly endless.
So how is this all relevant to Petsmart and ROI? Simple – do small micro-sponsorships of some of these high quality podcasts. Contact the owners of these shows and ask them if you could participate in their show once a week, giving a new “Petsmart Pet Care Tip” each week. Throw a coupon offer in the mix and drive those niche targeted audience members to a landing page, where they can print a coupon. That coupon has a UPC code embedded that allows the cash registers in the store to track where they came from. Wow!
That was easy right? I can think of at least fifteen more ways that Petsmart can help facilitate and enable an existing (and passionate) community. What’s more, this is all done with good ethics, no in-your-face selling techniques, and they still come out with a fatter bottom line ~ one that is fully trackable and proves ROI.
Again, go back to the rule where I say that “shouting is not allowed“, and begin to think outside the traditional 30-second TV spot. My guess is that by leveraging social media content producers you could reach thousands of passionate pet lovers for less than the cost of a traditional TV spot or full-page ad in the New York Times.
Culture and Objective Specific
I am not a brand professional for Petsmart, far from it actually. I work in social media for Best Buy Remix. That being said, the example above is semi-generic and is trying to prove the ability to track and measure ROI in social media spaces. If I were a consultant to Petsmart or an agency working on their behalf I would really try to get a better understanding of the company culture as well as an idea about which direction the company is looking to move forward.
I hope that you (the socialmediaphiles) will add to this discussion about ROI in the social media space. I believe that by combining smart business principals along with the new media channels that we will be able to further our industry. Don’t be afraid to stretch a bit, be creative and play a bit in this space before jumping in. I am looking forward to hearing and exploring your thoughts.
Special thanks to Brian Spaeth and John Meadows in the edits of this article.
Keith Burtis is a social media and digital marketing professional. If you or your company are looking to REV THE ENGINE on your digital efforts contact Keith today! Specialties include: Blog design/Integration, Custom Facebook Pages, Social, Digital and Interactive Content strategies.
Hi Keith,
I like that you brought up this topic. About a year and a half ago, we started doing some pretty indepth SMM for a client of ours. ROI wasn’t the first big question on my mind, but was something that I realized would definitely help sell many of these online initiatives to skeptical clients. Can you measure ROI? Yes, but it’s not easy, and it’s not always 100% accurate…but hey most analytics package is not sold as being 100% accurate, but more of a benchmarking and trending tool.
Interestingly enough, we caught one of our client’s competitors in a free fall in these metrics a couple months before sales showed the decrease. I’m not going as far as saying you can forecast, but it’s getting close.