How to Make a Business Case for #Socialmedia Gain Social Media ROI with Crimson-Hexagon

How
To
Make

A
Business
Case

for
Social
Media

Dr.
Natalie
L.
Petouhoﬀ

@drnatalie

www.DrNatalieNews.com

We
are
going
to
explore
the
4
KEY
Steps
to

Making
a
Business
Case

Step
1:
Define
Business
Benefits
&
Social
Strategy

– Start
with
one
simple
sentence

– Determine
ways
that
social
analysis
would
help

– Do
the
math
with
help
from
department
heads

Step
2:
Examine
Project
Benefits,
Costs
and
ROI

Step
3:
Determine
AddiIonal
Benefits

Step
4:
Define
Risks
and
UncertainIes

Using
A
Business
Case
Template:

>3.5
Billion
pieces
of
content

Shared
/
Week

By
2020
à
450
Billion
business
transacIons
/
day

How
can
we
make
sense
of
all
this?

Aren’t
the
Beneﬁts
obvious?

CLEARLY,

PEOPLE
ARE
SHARING
MORE
THAN
EVER

SOCIAL
IS
HERE
TO
STAY.

SO
WHY
DO
WE
NEED
A
BUSINESS
CASE

FOR
THE
INVESTMENT
IN

SOCIAL
MEDIA
ANALYSIS?

•  The first 2 phases
driven by Innovators &
Early Adopters
•  They don’t need
business cases to
adopt something
WHAT’S SHIFTING THE NEED FOR A
SOCIAL MEDIA BUSINESS CASE?
We’re in the “third wave” of social media.
6

The
Third
Wave
is
Dominated
by
The
Early

Majority
Who
Are
PragmaMsts
–

•  They
want
proof

•  Love
business
cases

–  Now
deep
insights
are
needed

–  Based
on
proprietary
market
research
technology
to:

•  Know
More

•  Know
Why

•  Know
How

Social
Media
Analysis
has
Evolved

To
make
sound
business
decisions…

Businesses
need
deep
insights
to
drive
business
acIons

–  Who’s
talking
about
the
brand?

–  What’s
being
said
about
the
products
&
services?

–  How
are
those
online
and
oﬄine
conversaIons
between

customers
aﬀecIng
the
business?

–  What
can
the
business
learn
from
these
conversaIons?

–  What
can
the
business
learn
from
monitoring
their

compeIIon?

The Business Case Creation Process:
How to Justify an Initiative

Define
Gather
IdenMfy
Analyze
Choose

Implement

Measure

Define

Project

IdenIfy

Align

Stakeholders

Set
Goals,

Metrics

Gather

Financial

Data

Document

current
state

Define

Problems
to

Solve

IdenIfy

benefits

IdenIfy
costs

IdenIfy
risks

Create

business

case

Analyze

Create
ROI

Create

selecIon

criteria

Produce
RFP

Evaluate

vendors

Select

soluIon

Measure

baseline

before

Measure

acer
for
ROI

Refine

opImize

Gain

consensus

The components
of a quality
business case
– a template

Table
of
Contents

1.  ExecuIve
Summary

•  Background

2.  Current
Business

•  Business
Problem
To
be
Solved

3.  Proposed
Project

•  DescripIon/SoluIon
to
the

Business
Problem

4.  OpIons
EvaluaIon
Approach

•  Proposed
opIons

5.  Investment
Analysis

•  Costs,
Beneﬁts,
ROI

•  QuanIfy
/
Sell
the
Beneﬁts

6.  Risk
Analysis

MiIgaIon

• 
Change
Management
/
Governance

Poorly
communicaIng

the
anIcipated
payback
/
beneﬁts

of
a
project

to
your
stakeholders—CxO’s,
Finance,
IT,
etc…

Is
a
sure
bet
to
stop

your
projects
from
being
funded…

Even
projects
you
know

would
strongly
beneﬁt
the
company.

BEGIN
BY
DISTILLING
THE
BUSINESS

CASE
INTO
A
SINGLE
SENTENCE:

13

“We
will
___(DO
SOMETHING
=
Project)_____

to
improve
__(A
Business
SituaFon)________,

and
our
success
will
be
measured
by

_____(Beneﬁts
as
Measure
by
Metrics)____,

which
is
worth
___(A
Dollar
Value)________.”

Example:

“We
will
use
social
media
monitoring
analysis

to
gain
strategic
insights,

And
our
success
will
be
measured
by
averFng
a
PR

crisis,

Which
is
worth,

on
average,
$2M
for
each
PR
crisis
averted.”

14

IN
ALL
SINGLE
SENTENCE
EXAMPLES…

This is the foundation of your business
case and keeps the effort focused!
AND -- You may find that you can garner
benefits in other departments
You can add additional sentences to your
business case
YOU PUT A STAKE IN THE GROUND:
i.e. – you say how you intend to use the social media
analysis to produce specific business results…
15

Example:

“We
will
use
social
media
monitoring
analysis

to
gain
real-‐Fme
market
research

insights,

and
our
success
will
be
measured
by

increased
consumpFon
(sales)

marketshare,

which
is
worth

5%
increase
in
sales
equaling
$2M.”

16

BENEFITS
FIT
INTO
“5”
BUCKETS:

To
get
more
benefit,
make
friends
in
other
departments!

17

Revenue

Tech
investment
leads
to

incremental
revenue

Sales,
Mktng

Measured
in
incremental

gross
margin

User
ProducMvity

Tech
investment
leads
to

streamlined
efficiencies

Department
Head,
and

End
User;
Customer

Service,
Product

Development…

Increased
worker
output,

cost
saving

Asset
ProtecMon

Tech
investment
protects

against
potenMal
for
loss
or

exposure

PR,
Risk
Mgt,
Security,
IT

Measured
as
potenMal

direct
/
indirect
cost

avoidance

Compliance

Tech
investment
complies
with

gov't
regulaMons

Legal
Affairs,

Regulatory

Measured
as
direct
cost

avoidance

Capital
Efficiency

Tech
investment
allows
for

reuse

increased
output
for

exisMng
capital

Finance,
IT,
Dept.
Heads

Measured
as
increased

output
per
capital

investment,
direct
cost

avoidance

Benefit
Bucket

Value

Depts.
Measurement

HERE’S
THE
HARD
PART…

DO
THE

MATH
-‐-‐-‐-‐

QuanMfy
each
benefit
idenMfied!

18

What’s
necessary?

•  Understanding
actual
departmental
funcIons,
costs
and

their
benefit(s)

•  Make
friends
with
Finance
and
Quality

•  Can’t
get
to
the
math
for
ROI
without
it

•  Get
input
from
departmental
head(s)
to
discuss

operaIonal
costs
and
social
analysis
opportuniIes

•  Vet
with
other
departments
–
part
of
the
change

management
process
–
so
down
the
line
you
don’t
get

resistance

HOW
TO
QUANTIFY
A
BENEFIT

19

Example
quesMons
to
ask
yourself
/
Dept.
Heads

when
quanMfying
a
benefit:

Q:
What’s
the
benefit
of
having
social
media
analysis
in
PR?

A:
Geong
deep
insights
on
brewing
issues
could
help
to
prevent
the
need
to
have

PR
damage
control

Q:

What
were
the
costs
associated
with
PR
damage
control?

A:

Decreased
shareholder
value,
cost
of
effort
to
restore
brand
equity,
resource/
PR
agency
overIme
costs,
irreparable
damage
to
brand

Q:

What
benefit
bucket
does
averted
PR
damage
control
belong
to?

A:

Cost
avoidance
fits
into
Asset
ProtecIon
benefit
bucket

Therefore,
Social
Media
monitoring
analysis,
from
a
PR
perspecIve,

is
protecIng
assets:

i.e.
earnings

shareholder
value
…

PR
Crisis
Recovery
ROI

CALCULATION

•  What
is
the
cost
of
a
PR
Crisis
Recovery?

•  Impact
to
annual
revenue
/shareholder
value?

•  Revenue
lost
/
week

during
PR
Crisis?

•  Length
of
PR
Crisis
without
social
media

monitoring?

•  Length
of
PR
Crisis
with
social
media

monitoring?

•  Cost
to
restore
corporate
brand
reputaIon
/

equity?

=

–

x
100

•  People:
Staﬀ
Salary
(exisIng)

•  Process:
Training
to
use
the
system

(3
days)

•  Technology:
Social
Analysis

Plarorm

ROI

On
average
research
shows:

Beneﬁt:
$2M
to
restore
the
brand’s
reputaIon

Investment:
(1
year)
=
$5,000/mo
x
12
=
$60K

ROI
=
$2M
–
$60K

x
100
=
566%
ROI

$60K

4
KEY
Steps
to
Making
a
Business
Case

Step
1:
Define
Business
Benefits

Social
Strategy

– Start
with
one
simple
sentence

– Determine
ways
that
social
analysis
would
help

– Do
the
math
with
help
from
department
heads

Step
2:
Examine
Project
Benefits,
Costs
and
ROI

Step
3:
Determine
AddiIonal
Benefits

Step
4:
Define
Risks
and
UncertainIes

Using
the
Business
Case
Template:

Examples:

Use
Cases
For

Social
Media
Monitoring
Analysis

22

Consumer Brands: Measuring Intent
Use Case: How does consumer behavior
respond to corporate actions or
other events?
Business
Application: Change activities based on
impact; investigate correlations
with other data sources.

Advertisers: Campaign Effectiveness
Use Case: To what extent did a specific
campaign meet its objectives?
Business
Application: Design future campaigns
accordingly; gain visibility into
elements of ROI.

B2B: Consumer Views on Industry Trends
Use Case: What risks or opportunities exist
in industry-level conversations?
Business
Application: Determine whether / how to
participate in high profile issues.

TV Media: Fine Tune Promotional Content
Use Case: What programming elements
drive passion from fans online?
Business
Application: Design or tweak promotional
content in order to highlight most
engaging topics to audiences.

Brand Audit - PR Use Case
SAMPLE CLIENT: A $200B global innovator that puts “imagination to work” to
make a better world (Crimson Hexagon serves 16 divisions)
QUESTION: What is happening to our brand?
Develop a framework for social media crisis analyses
communications by analyzing three crisis affecting the brand
over a 9-month period:
1
OFFSHORING JOBS
TO CHINA
TAX BREAKS IN A
BAD ECONOMY
2
NUCLEAR ENERGY
SAFETY CONCERNS
3

INSIGHTS and ANSWERS
ANALYTIC FINDINGS:
A.  Meaningful negative sentiment over horizon
B.  Greater negativity toward tax issues vs. outsourcing
vs. nuclear energy concerns
C.  Bigger crisis was one of politics, not a single event,
impacting brand perception relative to competition
“I don’t think there is any question that the audit
had a real impact on how people understand the
brand… It’s fair to suggest that Crimson Hexagon
has had a hand to play in our re-positioning.
CLIENT FEEDBACK:
A
C
B UNEXPECTED
UNEXPECTED, UNINTENDED

How
to
make
a

business
case
for

Social
Media
Monitoring
Analysis

Dr.
Natalie
L.
Petouhoﬀ

@drnatalie

www.DrNatalieNews.com

THANK
YOU

How to Make a Business Case for #Socialmedia Gain Social Media ROI with Crimson-Hexagon

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