Determining Social Media ROI

A few weeks before the Inbound Marketing Summit took place, Chris Penn and I were discussing what he should speak about.  Of that discussion came the decision to do the presentation on how to determine the ROI of social media.  Figuring out social media ROI continues to be a very hot topic not only for the social media geeks but also for big brands that want to determine success measurements of their investment into the space.

Outside of this conversation I had been bugging Chris to analyze my restaurant, Caminito Argentinean Steakhouse, for some time now.  Other case studies have focused on what we’ve done but not tearing apart the metrics.  Chris is a genuis at analysis and analytics.  So, I really wanted him to expand my knowledge and ability Google Analytics and other tools to properly analyze our efforts at the steakhouse and determine our ROI.  For those that don’t know, approximately 1.5 years ago we cut out 80% of our traditional marketing budget and turned our focus to our website, SEO, social media and other digital initiatives as a way to drive sales.  Surprise, surprise, it worked.  Since then we have seen a minimum of 20% increase in sales when comparing the same month the previous year.  But, one thing we never did was break out and track those individual efforts between the website, social media, and other areas we were spending our time online.

As part of his presentation Chris asked if he could use the restaurant as an example and do an analysis of our ROI.  What Chris found, in terms of hard dollars, surprised me and I think it will surprise you too.

You can check out Chris’ presentation, both slides and videos below:

Video

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Slides

As I said, I was surprised at the actual dollar values but I wasn’t surprised at the result that Chris found.  For us, our entire focus has been on SEO.  We have used social media as a tool to augment that but not as a primary vehicle to drive revenue for the restaurant.  For instance, we have made a conscious decision to not set up a Twitter account where offer discounts.  It is something we’re considering doing in the future, but right now we aren’t utilizing social media in that way.

While this presentation gives you some information about my brick and mortar and the decisions that we face and have to make, have you taken these steps to determine the ROI of your efforts on your website, blog, or social media profiles?  If you have done this exercise, did you change anything about the way you spend your time post-analysis?

Note: This is the first post of many highlighting videos from the Inbound Marketing Summit that was held at Gillette Stadium on October 7-8, 2009.  All posts will be tagged ims09 for aggregation purposes.

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Written by Justin Levy

View Comments to Determining Social Media ROI
  1. justinlevy
    October 12, 2009 | 6:14 pm

    Don’t think you can figure out the ROI of social media? Watch @cspenn do it right before your eyes #ims09 http://bit.ly/oxNIq

    This comment was originally posted on Twitter

  2. gameplanhayden
    October 12, 2009 | 6:28 pm

    Don’t think you can figure out ROI of social media? Watch @cspenn do it right before your eyes #ims09 http://bit.ly/oxNIq (via @justinlevy)

    This comment was originally posted on Twitter

  3. knealemann
    October 12, 2009 | 6:42 pm

    @justinlevy with an actual usable #socialmedia #ROI study. http://bit.ly/oxNIq

    This comment was originally posted on Twitter

  4. socialsonya
    October 12, 2009 | 8:41 pm

    Don’t think you can figure out the ROI of social media? Watch @cspenn do it right B4 your eyes (via @justinlevy http://bit.ly/oxNIq #fb

    This comment was originally posted on Twitter

  5. Christopher S. Penn
    October 12, 2009 | 7:50 pm

    I appreciate the flattery, but I think it's important to stress that you do NOT need to be a “genius” of any kind to do this type of analysis. quite the opposite – this particular formula is accessible to everyone!

  6. hkotadia
    October 12, 2009 | 11:17 pm

    Determining Social Media ROI http://bit.ly/SamD2 #sCRM #socialmedia

    This comment was originally posted on Twitter

  7. joltsocialmedia
    October 13, 2009 | 12:37 am

    Determining Social Media ROI http://bit.ly/11O5H4
    #socialmedia

    This comment was originally posted on Twitter

  8. sbrudvig
    October 13, 2009 | 7:30 am

    #mkg495 RT @hkotadia Determining Social Media ROI http://bit.ly/SamD2

    This comment was originally posted on Twitter

  9. pfurey
    October 13, 2009 | 10:21 am

    Social Media ROI http://bit.ly/136Kbt

    This comment was originally posted on Twitter

  10. clemenceko
    October 13, 2009 | 1:03 pm

    Video and slides on – Determining Social Media ROI >> http://ow.ly/u7Ej

    This comment was originally posted on Twitter

  11. brett
    October 13, 2009 | 3:47 pm

    Determining Social Media ROI – http://retwt.me/RG0P (RT @justinlevy)

    This comment was originally posted on Twitter

  12. JaredGolberg
    October 13, 2009 | 4:01 pm

    very interesting blog post.. RT @brett Determining Social Media ROI – http://retwt.me/RG0P (RT @justinlevy)

    This comment was originally posted on Twitter

  13. mksmither
    October 13, 2009 | 4:01 pm

    Thank you…helpful.RT @brett: Determining Social Media ROI – http://retwt.me/RG0P (RT @justinlevy)

    This comment was originally posted on Twitter

  14. JamesRyanJ
    October 13, 2009 | 11:32 pm

    Watching a great ROI presentation http://bit.ly/oxNIq on @justinlevy

    This comment was originally posted on Twitter

  15. Josh
    October 14, 2009 | 1:24 pm

    I really liked the slide show, it really make simple the ROI from social. The hardest part in “selling” that social is worth it is the lack of analytic to back up claims. I know there are tons of tools out there to see numbers of people visiting a site, but more specifically the time involved in conversing online and the return that it gets you. Testing, playing and interacting are priceless towards improving conversions and ROI.

  16. Josh
    October 14, 2009 | 5:24 pm

    I really liked the slide show, it really make simple the ROI from social. The hardest part in “selling” that social is worth it is the lack of analytic to back up claims. I know there are tons of tools out there to see numbers of people visiting a site, but more specifically the time involved in conversing online and the return that it gets you. Testing, playing and interacting are priceless towards improving conversions and ROI.

  17. anyapfrey
    October 15, 2009 | 9:05 am

    Some discussion on Social Media ROI http://bit.ly/xcE4Z

    This comment was originally posted on Twitter

  18. fvongraf
    October 17, 2009 | 2:18 am

    I like this presentation on actual $ ROI via Social Media: http://bit.ly/2V3t5i What do you think @CindyKimPR ?

    This comment was originally posted on Twitter

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