Secrets of Social Media ROI Revealed by 166 Case Studies with Rob Petersen

Hi everybody, and welcome to today's Biznology digital marketing webinar. I'm Frank Reed. I'm one of the bloggers here at Biznology. I'm the managing editor of Marketing Pilgrim blog, which is currently sitting at number 13 on the Ad Age Power 150. I'm also the director of business development for the Edgeworx Group, which is an interactive agency with an integration mindset based in Irvine, California. But today, we're We're going to be hearing from Rob Peterson, who is another one of our Biznology bloggers, and he's going to be presenting his Secrets 166 Social Media ROI Case Studies Reveal. But before we get into Rob's presentation, I'd like to recognize our sponsors. First is BarnRaisers, a digital marketing social media solutions company that builds brands using community and the proven principles of relationship marketing. We also have Brick Marketing. Which is a full-service SEO solutions company that increases website visitors. We have Marketing Pilgrim, the internet and social media marketing news blog. We cut through the bull so you don't have to. Lastly, reputation.com. Don't let the internet scare off potential customers. Improve what people see when they search for your business. So as we wait for some other attendees to join, let me review the format of our webinar. Our BizKnowledge webinars last just 30 minutes. Now, we do that so you can easily fit them into your busy schedule. We record each webinar, and we'll email you that link later this week. During Rob's presentation, you can use your GoToWebinar controls to ask a question. An orange arrow opens and closes your webinar controls. If you have a question, simply type it into the box labeled Questions at any time during the event and press the Send button. I will select a few questions at the end of the webinar and pose them to Rob. Let's see, while we are waiting for the last few attendees to join, I would like to remind you that Biznology newsletter and blog are available for free at biznology.com. So if you are not already a subscriber, we hope that you will sign up now. Alright, so thanks again to all for spending the next 30 minutes with us. We know how valuable your time is. So let's introduce today's speaker. Rob Peterson is one of our Biznology bloggers. And he's the president and founder of BarnRaisers, a digital marketing agency. He's also on the MBA faculty of Rutgers University where he teaches courses in web analytics, SEO, and social media measurement and ROI. Rob has also been recognized by the American Marketing Association for building billion-dollar businesses. So if you've ever struggled with tracking the value of your social media marketing, this is the webinar for you. Rob, take it away.

Thank you, Frank. We'll just get right into today's subject of social media ROI. First, before we present some of the findings from the case studies, just a couple of imperial facts about why social media is so effective in building businesses. It really relates back to the fact that the internet and social media has now changed the way we buy. If you think about it, just about all our purchase decisions begin online with us kind of letting the internet know what we want. By writing our unmet need in the query box of a search engine. Even if we buy offline, we're researching online. And what we're looking for in our journey is some type of review from somebody who's had experience with what we're buying, because we'll trust the recommendation of somebody else a lot more likely than we would trust something in an ad. But you take all these facts and figures together, and what they tell you is that marketing has changed. It's really not a monologue where we keep pushing out messaging and shouting it louder if we're not getting through. Now it's a conversation where as effective as we are depends on how good we listen to our audience we're trying to reach, and not as a monologue, but as a conversation, and in the process building relationships that are going to be more sustainable. This is also what the Harvard Business Review said in a landmark study that they did almost 2 years ago now, where they concluded that we, instead of buying in the rather vertical way that we bought in the past, of considering a lot of brands, evaluating some, and then buying, where our relationship with the manufacturer ends. Now it's a much more fluid and horizontal process where we're actually learning along the way, looking for how others can help us before we buy, and trying to help them afterwards with what we've learned. Because it really is in our DNA as human beings to share our brand experiences. As compelling as all of this information could be, everybody that I talk to in my walk of life, whether they be peers or clients or prospects, say, that's a really nice argument, Rob, but show me the money. Tell me where is the ROI. And in fact, Social Media Examiner, an online business newsletter, says when they do their annual survey every year that the number one question that comes up over the 4,000 marketers that they poll is, how do I measure social media return on investment? So I set out a couple years ago to start delivering the evidence through a series of blog posts just describing brands and businesses that have had success with social media. This summer I decided to publish an eBook on it and actually had 166 case studies of businesses that have benefited through social media. So what did I learn? This webinar is all about really the business principles and fundamentals that transcend all 166 of those businesses that had success with social media. To say, what is it about them? Because they cover a wide range of different business types from B2B to B2C to profit to nonprofit, from small to large. What is it that makes them all successful? We'll get into each one. We'll have a case study that will demonstrate it. One of the reasons that I have these case studies is because in the process of writing this book, one of the most gratifying things for me was not to just view it as a compilation of of blog posts, but to look at it fresh and say, what did I learn? And so what I learned was that I got to know many of the business owners behind these case studies personally, because in writing about them, they reached back and said, thanks for writing about us. And I got to know their personal stories a lot better. So as much as this is secrets and business principles and best practices, it's also personal stories and, and people who have really done well in the social media environment. So let's start to reveal them. All of these case studies exhibit the business principle that to build it is better than to buy it. And a case study that demonstrates it particularly well is an e-retailer called Melrose Jewelers, which as this headline shows you, built a business that had $2 million in sales in one quarter by running a promotion on Facebook. Melrose Jewelers sells jewelry obviously, but their main category is watches, watches that cost about $5,000 on average like Rolexes and Breitlings. What happens is that they developed a promotion for Facebook where if you went to their Facebook page, this is what you'd see first. You take a simple quiz of a few questions and the quiz would reveal the type of watch person that you were. So they would engage you. In the process of engaging you, if you decided to go further, they would give you a $100 discount and enter you into sweepstakes on a Melrose Jewelers watch. If you bought the watch and then put a picture of it on Facebook after you bought it, they'd give you another $150. You could be engaged and get a sizable discount on the watch. Here were the results that they got. They literally, as a result of this promotion, doubled their sales in 3 months. They raised their average shopper value. Clearly, all of this is directed in terms of website traffic because that's the only place you could buy the watch. And this all comes from internet research. So the one piece I couldn't get from internet research was the sizable database that they built in this process that was permanent for them. And all of, as you can see, is fueled by a 600% increase in likes that they got that drove all of this traffic. So this is case number one of how business principle— and if you're in the area of social media, the mindset of I build it rather than I buy it— is an important principle to have for ROI success. The second principle is that nothing succeeds like a passionate belief in your brand. This fellow in front of the blender is CEO Tom Dixon of the company Blendtec. Blendtec makes industrial blenders, and if you go to YouTube and you search the term Blendtec, you'll see a page of YouTube videos with Tom blending everything from iPads to iPhones to broom handles to golf balls, all of which have been viewed in the area of 10 million or more views. The story behind this brand is that it's almost 40 years old, and for most of its life was a company that sold B2B blenders to the commercial market. Starbucks, for example, uses Blendtec blenders to grind their coffee beans. In the late 2000s, they decided to sell direct to consumers, going on YouTube with Tom in kind of a blending fury, and all with a bunch of commercials that cost only $1,000 to make. 2 years later, their company sales increased by 700%. And where did that traffic go? A lot of it went to their website. This measures their website traffic. And yes, once those commercials ran, they were getting 120 million visitors to their website in a week. It all shows too, the third principle, that if people like you, they're going to want to find out more about you. So the third secret to social media success is to realize that people like to do business with people they know. So we've talked about Facebook. We've talked about YouTube. Let's talk about the power of a blog. This is a blog called Fast Lane. It's written, or it was originally written in 2007. It's still a very active blog today. But the unique thing about it is it comes from GM, and it's written by senior executives at the company. If you think about it, when GM started this particular blog, our faith in GM products and their product quality was probably at its lowest. So really, GM deserves a lot of credit for putting their senior executives out, who we really didn't have much trust in at the time, out there in a very visible way, blogging with anybody about their brand. And what GM realized was that they were saving, in doing this, about $200,000 a year versus market research costs that they could have done. This chart comes from Forrester Research, which studied the impact of that blog. Forrester didn't even attempt to quantify the value of the increased brand visibility that came from the traffic and press mentions and search engine rise in rank, or word of mouth. But they simply said from the comments that came on the blogs and what the learning was and the insight was and how GM took action, that what if GM just decided every 3 months to do some focus groups to get the same level of learning? And they estimated that GM would have spent about $200,000 versus a very marginal expense that they spent having a company blog with their senior execs authoring posts occasionally. This is Joe Sorge. Joe Sorge probably represents as much as anybody in social media the business principle that social media and customer service are the same business. Joe is the owner of a restaurant in Milwaukee, a burger bar and grill called AJ Bombers. Joe's initial foray into social media occurred in 2009 when he opened his restaurant. Opened 3 restaurants actually in Milwaukee at the worst time to possibly open a restaurant in Milwaukee, not being a good city from the economy standpoint to open one. And for 6 months, he basically operated the restaurant at a barely break-even level. One day with his head in his hands, he decided to go on the internet and look for and use a resource called Twitter Search to see who might be writing about his restaurant. And lo and behold, there was a tweet from a restaurant reviewer in Milwaukee who said that Joe's restaurant, AJ Bomber's, makes the best burgers in Milwaukee. Immediately, Joe started to embrace Twitter, started to develop a relationship with this particular restaurant critic who he didn't know before and her following, and started to use it as a vehicle for inviting people in to ask them how their meal was. And as a result, within 6 months, 75% of his business was coming from Twitter. His weekly sales were 60% above what they were a year ago. Joe really also just embodies the everyman of social media who just embraces new things and sees where they go. At one point, one of his competitors, another burger restaurant in Milwaukee, said, maybe we could do a duel on TV. So Joe enlisted his following to see if they could petition the Travel Channel and get a show on the Food Wars, a burger a burger war between the two of them, which they successfully did. The impact of what ROI can be if you build a community and they become your resource for innovation and ideas is huge. There are plenty of case studies of businesses who do this successfully. One of them is IBM. IBM decided to open an internal blog. Didn't open it for the public, but opened it as this screenshot shows you, for anybody within the company who wanted to contribute to their blog and had something to say. It was voluntary. You could just go on there with ideas and talk to other people. And what happened was they used it as an internal tool for collaboration. And the main method of getting people together from all around the world was crowdsourcing. So companies were allowed to set up blogs on their own. And what happened was, on a voluntary basis, there were 17,000 blogs set up. There were 100,000 people who used them. What IBM would do to draw attention to certain activities that were happening at certain times, they would be announcing these crowdsourcing jams, which as many as 500,000 people contributed to at one time. So as a result, IBM took some of the product ideas that came from this particular initiative, and they funded them with $100 million in funding to bring these ideas to market, and they generated $100 billion in revenue. So that's 100-to-1 ROI with a 41% gross profit margin. Perhaps if you think about all of these, all of these case studies took place in the worst economy since— so not only did they demonstrate ROI, but they demonstrated ROI in a place when the economy was not that good. It could be a small business owner that really, like Joe, who didn't have the resources for traditional marketing. It could be a big business like IBM that needed to try new things. It could have been a business where people had the resources to try it, but the traditional ways failed. But there is really an entrepreneurship of almost courage that happens with all of these case studies. And the story that maybe exemplifies that as much as any, if not better, is this is a picture of Mari Luengrath. Mari is the owner of a business she started called Foiled Cupcakes. Mari got the idea for her business because one day she was driving around the city of Chicago with her very young son, and it was his birthday, and she wanted to buy him some gourmet cupcakes. Driving around Chicago, she couldn't find any place in Chicago to buy a dozen gourmet cupcakes for less than $100. So she said something about this is wrong, but it also triggered a new product idea. So she started the cupcake company as a startup. She didn't have the money for a storefront, so she pretty much just operated out of her house, not this nice kitchen that you see here in the picture now. And she built a website which would be her means for generating the orders. And what happened was that the website developer that she had engaged to do this, unknowing to her, had offshored the building of the website and run into a problem with paying the website developer in a PayPal account. So he wouldn't launch the website. So Maury was sitting with a kitchen full of cupcakes and no way to get the word out. With no knowledge of social media, she embraced Facebook and Twitter and set up profile pages. And basically used that as a means to launch her business. As a result, today 93% of her leads come from social media, and her company year-to-year continues to surpass their revenue targets by a large amount. Mari is also a great case of how she's evolved her social media platforms to suit her audience. When she first started, she was basically dealing direct to consumers and using Facebook and Twitter a lot. What she found In the process was that really a lot of her revenue would come from larger corporate accounts. So she embraced LinkedIn, which we haven't talked about to this case, but she— up to now, but I'm including here to talk about the unique way she embraced LinkedIn. She used LinkedIn and that feature where you can find companies in your area to find all the companies that were within a certain radius of where her delivery trucks would go and found a way to sort of get messages to them. to bring in new people. So really the trick here is in all of these case studies, this wasn't a case of how many times a day to tweet or how many— when to put up Facebook versus LinkedIn. These are people that embraced basic business principles. And so wherever you are in your own social media evolution, whether you're just starting, whether you're in it, whether you've been in it for a while, the real question to ask yourself is, do we, or does the company, or does the program that we're doing live by these principles, which are to build it is better to buy it, that nothing's going to be better because you're putting yourself out there than a passionate belief in your brand, that people like to do business with people that they know, and that you're in a customer service business the minute you start with social media. You should build a community for one reason, to use them for innovation and ideas. And just really believe that social media is going to work with failure not being an option. If I were to put this into a process that any business could use, I might use the metaphor of crawling, walking, running, and thriving. And so what I see in all of these case studies is that What happens is that before you start, you're very clear about what your strategy or your goals are. And you need to make sure that your website is going to be a desirable place for people to visit. Because as you saw in the case of Blendtec, what happens is— or the case of the GM blog— is that if people like what you're putting out there, they're going to go on their terms to other resources, most likely your website, to find out more about you. Then you want to start to establish your social following and you feel that you've got a good place in who you are on the internet. You want to start to sort of ask yourself, well, who do I want to attract? Start to build relationships. As you saw with Mari, that you want to increase what's working, pull back on what's not. If you see another area that you want to penetrate, use the social networks to evolve your business in that way. As you saw probably as well as anybody could see through the Blendtec commercials, that you want to make your content as interesting as you possibly can. And so as you are developing and building relationships, make sure that you are curating your content, not just what you are putting out, but making it as interesting as possible. My intent in writing this eBook was just really to put all the work that I have been doing in one place so that I can make it a value-add for people who are coming to my website. And I noticed that a lot of people came to my website because they wanted to have case studies. And lastly, as you saw in the IBM case, is make sure that you're relying on your customer base to nurture and bring your business around and use them for innovation and ideas. Because the ROI on a new business idea, as IBM demonstrated, is really huge. So I appreciate your listening to these case studies. I will thank you very much for listening. And Frank, I'll turn it over to you for any questions that might come from the audience.

Great, thanks Rob. I'm sure attendees have a much stronger idea now how to track ROI for social media. But of course, as we always have on our Biznology webinars, he didn't answer every question, but that's a good thing, so there's something else to talk about. We've got several good questions from the audience teed up for you. And in the meantime, I'd like to remind our audience that it's not too late to ask your own question by typing it into the questions box in your GoToWebinar controls. Before we do get to that first question, we need to thank our sponsors once again. BarnRaisers, which is a digital marketing and social media solutions company that builds brands using community and the proven principles of relationship marketing. Brick Marketing, which is a full-service SEO solutions company that increases website visitors. Marketing Pilgrim, the internet and social media marketing news blog. And then reputation.com, don't let the internet scare off potential customers. Improve what people see when they search for your business. All right, now on to the questions. We have a few minutes here, and Rob, we're going to let you field some of these. We have some good questions. And anytime we talk about anything in the Internet space, this seems to be one that comes up. Somebody wants to know how much time do you need to put in? What is your investment in this? Do you have any type of standards, or do you have anything that you could share with the audience that might give them an idea of exactly what they are getting themselves into getting started?

That's a good question, and actually one that comes up frequently. The benefit of getting to know some of the people who were involved in these case studies is that's the question I asked them. And what I found was that it really becomes almost like a routine. First of all, you should make sure on your website that you have an analytic tool and you know sort of where your business is coming from and what days your visits might be more. But you really should get a sense from how your audience spends time with you. And then what most of these people did was they worked out a routine. Joe, for example, who really did well with Twitter, usually got up around 8:30 to 9:30 in the morning before the restaurant started to get into full gear for lunch and would spend an hour on social media a day. People would ask him how he did it, but it really was just an hour. And what happened over time is his audience started to follow him. Follow him. They got conditioned to the fact that he would probably be on around that time. Almost like email marketing where you send something out and you do it on a regular basis and your audience expects to get something from you, social media sort of works in the same way. It really is a process of listening, working out a timeframe, and it usually for most of these businesses ended up just being anywhere from an hour to a few hours a Great.

Well, that's great to know. And we've got a couple other questions that kind of follow along those lines, or just getting to know a little bit more about this opportunity that exists for these businesses. Are there any type of brands or any type of maybe verticals that you see work— that this type of approach is working better for? And do they have particular— are there particular social networks that fit well with certain types of activities or certain types of brands?

Sure, good question. Certainly products that are fun, food is an example, or products that might be social in terms of people coming on, or products that tend to do well in areas like Twitter or Facebook. Companies that tend to really rely on one-to-one relationships, B2B companies for example, and that's really why the GM business was chosen as a case study, are particularly well suited for things like blogs or LinkedIn discussion groups, things where there's an opportunity to almost use comments like you would use a download form and develop a relationship that way. Businesses like YouTube where you might have a business like Blendtec where really there is nothing short of seeing how good that product is than to believe it, YouTube can be very effective. But really, if you put yourself out there in a genuine way with your audience, your audience will start to direct you too. What will start to happen, I even have a little rule that I call the Goldilocks rule that I observed in some of these, is that if you are putting yourself out there, you will start to find, and you listen to the level of engagement, who is writing back to you, who likes what you are putting out, you will start to figure out and that will direct you in terms of where you need to be spending your time. Mari started largely to some degree as a last resort. By just opening up a Facebook and Twitter page because she had no other way to get her name out when the cupcakes were ready but the website wasn't. In time, she found that she was having more meaningful relationships by reaching out and finding companies on LinkedIn in her geography and developing relationships with them. So it's always good to remember all along this journey that you take with social media What is the business goal that I have to put out? Because that and the genuineness that you put yourself out there will sort of make the mix of the area that the social networks that you're in and the ones where your audience are meet in a way that you're being the most productive with your time and your messaging.

Great. Thanks, Rob. Now we have an excellent question for someone like yourself, because Eileen wants to know where Can we get the ebook with all these case studies?

It's on the website. The website is barnraisersllc.com. It's on the right-hand sidebar. You can get it by just going to it with a click. There's no information required. The process will take less than 5 seconds. If you find the ebook of value, there's a subscribe to our email right above that. And you can just put your name in there and get a weekly email every Wednesday.

We have time for I think one more, because this is an interesting question in the sense of how things are changing with social media. Where do you see blogging in this? Is blogging social media in your opinion?

Oh yeah, absolutely. In fact, I would view blogging blogging and many case studies in that area where blogging is essentially the hub of social media. Blogging is the most content-rich area of social media from a standpoint of how much you can say. There are studies by eMarketer that say that blogs build the highest level of trust of any of the social networks because of the fact that you can really get into such a larger degree of depth than where you want to go. Many companies who have their hub as a blog use the social networks as outposts where they might put the headline of their blog in and then a link to the blog post. In fact, Twitter is actually described by Wikipedia as not a tweeting network but a microblogging network. Many people who are in the blogging world, if they want to search what are valuable topics that people are writing about, will go to a search tool called Topsy, topsy.com, because that's a site that you can type any topic into and it will reveal the blogs that people are putting out there on Twitter. Incredibly valuable as a content-rich source and especially valuable as a B2B tool where you have the opportunity to develop relationships with bloggers through— and customers really— through the comment area. And certainly blogs with links and everything else that you can put into in terms of titles of your blogs are very, very rich resources in terms of raising the search rank of your business and your website.

One last quick question. Hopefully everybody can hear me.

Hello? We can hear you. Frank, I lost you on that question. It looks like we might have lost Frank.

No, I think I'm back.

Okay, good to have you back. Yeah, good to be back.

There was a question here, I don't know if you heard it, about keeping track of these relationships.

How to track your relationships?

Yeah, how to keep track of the relationships.

Sure, the way to keep track of it is really to develop your own database however it might be, even from an Excel chart of who you might track in terms of how much people are engaging with you. There are also online tools. Perhaps this leads into the topic of another webinar. But for example, on Facebook there is a tool called Booshaka, spelled B-O-O-S-H-A-K-A.com. Booshaka is a tool that you can use for your Facebook page that's free at the intro level. And it can actually track who are your most your biggest advocates. And what it has is an algorithm of basically who's engaging with you the most. But it's a very good tracking mechanism that way. Joe used Twitter search, Joe Sorge for AJ Bombers, to find people that were in his area that were talking about his business. So just about every social network has a real-time application of where you can go to find out who's engaging with you and who's engaging with you the most. Now, I don't know if I still have Frank here or you can hear me out there, but if you can, I want to thank you very much for coming to this webinar. I want to thank Biznology for bringing it to you and for Frank for being the host for this. And I'll take any other questions or listen to Frank if he comes back. Thanks for spending this half hour with me and with Biznology.

Can everybody hear me now? I'm sorry.

Yes, we can hear you. I can hear you, Frank.

Are we still on? Because I want to make sure that we tell everybody about our next webinar.

I think we are.

Okay, well, there we go. I'm sorry, I'm having some technical difficulties here. Sometimes it can happen. Anyway, make sure if you want to get email a question that has not been answered today, make sure you send it to eileen@mikemoranngroup.com. That's eileen@mikemoranngroup.com. She'll be sure to get them to Rob for an answer. Later this week, we'll send you all a link to the recording of the webinar to listen to again and to share with others. We also want to invite you to mark your calendars for our next Biznology webinar, which is How to Take Back Your Online Reputation, which is scheduled for 11 AM US Eastern Time on November 13th. And that will be with, with Chris Abraham. But thank you, Rob, for your time today. Thank you for everybody who's attended, and we really appreciate it. We look forward to seeing you in November.