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?
acob, these are terrific examples. Obviously Reality Digital is in the “business” and should get this strategy (but so glad it's working for them all the same). But, Naked Pizza, now that's news! Talk about creative, out of the box thinking. I keep hearing about the statistics out there that talk about the high powered users generating 95% (or some other really high %) of all social media (Twitter specifically) activity inferring that this is not a widely spread phenomenon when in reality, if we look at these “smaller” users (of which there are many millions) I'll bet we'll find lots of “Naked Pizza's” with real successes building businesses by adopting social media.
Thanks so much for sharing!
Jacob, these are terrific examples. Obviously Reality Digital is in the “business” and should get this strategy (but so glad it's working for them all the same). But, Naked Pizza, now that's news! Talk about creative, out of the box thinking. I keep hearing about the statistics out there that talk about the high powered users generating 95% (or some other really high %) of all social media (Twitter specifically) activity inferring that this is not a widely spread phenomenon when in reality, if we look at these “smaller” users (of which there are many millions) I'll bet we'll find lots of “Naked Pizza's” with real successes building businesses by adopting social media.
Thanks so much for sharing!
Hi Steve,
There are plenty out there, just google “small businesses using social media” Coffee Groundz is another great one.
hey steve,
thanks a lot for the comment glad you found the examples useful/helpful!
A little more details on the Naked Pizza landmark day? Was it just a great day with lots of slow buildup and the billboard or was it a special promotion/discount? Kind of an empty example without a few more details.
Hi Jason,
That's all the information that Naked Pizza shared. Either way I don't think it's an empty example as it still shows how the company was able to drive business from social media. More details would be great but unfortunately I haven't found any.
Thanks for the comment
It sounds great and I am sure they saw great results, but without more info there is no context. I say empty because there are no details of cost.
How much time did they put into it? How much advertising money? How many staff resources were committed?
I doubt it is an extravagant cost, but we don't know without a few more details. If they made $1000 off of new Twitter customers and it cost them $2000 then it is not that great of an example. I know you said they have a positive ROI (yes dollars), but I am inclined to depend on the facts. They speak a little more clearly when trying to learn and improve and educate.
Not saying it is a bad example, I would just prefer to see behind the screen a little more before holding it up as a great example.
I agree, more info would have been great
It sounds great and I am sure they saw great results, but without more info there is no context. I say empty because there are no details of cost.
How much time did they put into it? How much advertising money? How many staff resources were committed?
I doubt it is an extravagant cost, but we don't know without a few more details. If they made $1000 off of new Twitter customers and it cost them $2000 then it is not that great of an example. I know you said they have a positive ROI (yes dollars), but I am inclined to depend on the facts. They speak a little more clearly when trying to learn and improve and educate.
Not saying it is a bad example, I would just prefer to see behind the screen a little more before holding it up as a great example.
Thanks for this!
I was wondering if it's possible to measure ROI, from my Social Media Program, in an automated form like with Sales Force and other Business Intelligence programs can do for traditional marketing programs.
Thanks for your answers!
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