This is part three in a three-part conversation with Olivier Blanchard, author of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization. In part one, Blanchard clarified social media myths and how to drive maximum company buy-in. In part two, Blanchard covered the ideal structure of a social media program and gives some best practices for managing it.
When presented with a recent American Express study that showed online purchasers rarely interacted with a social media channel prior to the actual purchase, social media expert Olivier Blanchard bristled good-naturedly.
"Don’t be so narrow-minded," he said. "Take the blinders off and look at the bigger picture. … We’re note just dealing with the direct digital path – awareness, click the link, make the purchase. There’s a much bigger notion around [social media], which creates preference, desire and mindshare for products that a traditional advertising can’t do as well."
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People interact with social media outreach more often than a single print or TV ad. An online relationship means an individual is reminded of a company’s presence frequently. The high rate of contact is ideal for affecting certain types of behavior to "sell more stuff."
Part III: Full Interview
Blanchard encourages companies do go beyond the vague statement though with the notion of frequency, reach and yield – three terms he picked up while working with Microsoft in their distribution channel.
"[Frequency, reach and yield] was a way to look at sales with a very specific focus where it wasn’t just selling more stuff, it was types of behaviors with customers that led to specific types of sales," he said.
Frequency is the buy rate – looking at the frequency customers purchase a specific item or service. It was discussed in part two of the conversation as well. Reach is "casting a broader net" – contacting more potential customers and turning them into transaction customers. Yield is getting customers to spend more per purchase.
"Frequency reach and yield bring focus to a sales strategy and can connect social media activity with actual results – not vague stuff, but hitting very specific targets."
A social media campaign highlighting the tendency to skimp on deodorant after running reminds people to plan ahead when low, increasing purchase frequency. A restaurant’s social media campaign featuring videos and blogs about new desserts could increase the yield per visit of the eatery’s regulars. A social media ad touches more new potential customers than most print or TV ads, increasing reach. Depending on which type of business you run or product you sell will dictate which metric to target in a campaign.
Blanchard diagrams the financial and nonfinancial components of each metric in his book. It is critical, for example, to note the difference between frequency of interactions – a nonfinancial aspect – versus the frequency of transactions – the financial aspect. Monitoring the later is ideal, yet often overlooked. Impacting even slight changes in the financial aspects of any of the three metrics can lead to a significant increase in a company’s bottom line that is directly tied to social media campaigns.
Blanchard is convinced these claims are not a charlatan’s promise. But figuring out the perfect campaign to move the needles on these three metrics? Well, that’s another book entirely.
Hear the full conversation on this topic in the above podcast. Additionally, you can check out part one of the podcast – a discussion on clarifying social media myths and driving maximum company buy-in – or part two – a discussion on the ideal structure and management of a social media program.