Posts Tagged ‘small business social media’

Two Examples of Companies Measuring Social Media ROI

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October 12th, 2009

I wanted to share 2 examples of companies that have been able to share a very clear ROI from their social media efforts. If the two small businesses below can calculate social media ROI so than can your multi-million dollar company. The examples below aren’t exhaustive and of course there are things that can be improved upon. The important thing to realize is that there are companies out there that are able to measure ROI from social media.

For those of you who are not familiar with Naked Pizza it’s an all natural pizza place in New Orleans that actually makes pizza that’s good for you. What’s interesting is that Naked Pizza has been using social media tools such as twitter and facebook to reach out to customers and to generate a positive ROI from their efforts (yes dollars). In fact, Naked Pizza has a giant billboard outside of their store which encourages passerby’s to follow them on twitter. Jeff Leach, one of the co-founders of Naked Pizza says that he was able to drive 15% of daily revenues with Twitter; of those 15%, 90% were new customers! A few months ago Naked Pizza broke it’s one day sales record using social media, here are some stats from that day:

68.60% of total dollar sales came from customers who said they are “calling from twitter”
31.40% of customers did not mention twitter
41% of total tickets were from twitter customers
of the 26 new customers, 22 (85%) were from twitter

That’s example 1, here’s example 2.

Reality Digital is an SF based company that offers clients an online community platform to engage with their users. Reality Digital has been using social media (mainly twitter and facebook) to help get new clients and to increase the number of prospects/leads. Here are some stats from their social media efforts (found on Computerworld)

Total investment for social media programs (including technology costs and PR agency hours): roughly $3,000 per month
Total sales leads generated in April, May and June: 72
Average sales leads per month: 24
Average cost per sales lead: $125
Lead conversion to sales opportunities: 11.1%
Lead conversion to closed deals: 1.4%

Reality Digital didn’t give an exact number for how much money they are making but Lawrence Mak, the marketing manager said:

“Given the typical size of our deals, the annual cost of our social media programs is covered by revenue from one closed deal (annual contract). Because we started our social media program only three months ago, I consider it to still be in ramp-up phase. I expect cost per lead and conversion metrics to improve as the program matures over the next three to six months.”

So there you have it, 2 examples from 2 different companies that are using social media and are able to measure ROI. These 2 companies don’t have multi-million dollar budgets so what’s your excuse for not measuring your social media ROI?

TAGS: naked pizza, reality digital, small business social media, social media roi, social media roi examples

Who is Educating the Small Businesses on Online Marketing?

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January 13th, 2009

Emarketer released some interesting stats about how small businesses are going to be distributing their online marketing efforts. Take a look at this chart:

There are a few interesting takeaways. First, around 25% of small businesses are going to be increasing their social networking efforts. This number seems promising until you look at the percentage of small businesses that aren’t using social networking at all, 37%. Second, out all of the online marketing channels listed, company websites are apparently going to see a 9% decrease in usage. I found this interesting because blogs are usually tied to company websites. Finally, looking at the whole “do not use” section shows that a lot of these small businesses are not really using a lot of these online marketing mediums at all. I suppose this can be interpreted as either a huge miss, or as a huge opportunity.

Looking at the above graph, I started to wonder why so many of the small businesses out there are not making use of online marketing, alas the answer is below:

Generating new customers is by far the greatest challenge for small businesses. Looking at both of these graphs tells me that a lot of small businesses are not using online marketing effectively but are also struggling with generating new customers. I interpret these charts and results as a problem in education and information in the online marketing world. Here we have small businesses who are struggling to get new customers, and a very effective new customer medium (online marketing) that is not being utilized.

Perhaps small businesses are just unaware of the various online marketing tools and strategies out there that can lead to new customers. In general we tend to focus a lot on the large corporations out there but perhaps we need to turn our attention to educating small businesses on how they can use tools like SEO, social media, email, etc. to generate new customers and increase revenue?

Combine this with a survey that was released by Cone Business which concluded that 93% of Americans believe that companies should have a presence on social media sites (with 85% believe that companies should use social media for interaction) and you can see that we have a real big gap. Americans want companies to use social media yet a lot of small businesses are not (social networking, blogging, video, podcasting, etc.)

Why do you think we have such a gap? What can we do to close this gap? How else do you interpret the information?

thanks for reading!

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TAGS: educating small businesses, emarketer small business survey, online marketing for small businesses, small business social media, small businesses social media