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?
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