This is a big and popular topic, and having just read a few posts about it – Patrick Schaber over at the Lonely Marketer and Francois at Emergence Marketing motivated me to put up my own post about it.
Of course Social Media is a huge space, so I am focused on what we (MotiveQuest) do around here – which is listen. (We collect millions of topic-specific consumer conversations from blogs, forums and newsgroups and then analyze them to develop an understanding of the core human motivations & drivers and competitive dynamics within a category. Results used for branding, communication, product development and issue management)
Anyway, in conjunction with Northwestern University, MotiveQuest has been developing something called the Online Promoter Score. This is a measure of the frequency and willingness of consumers to advocate strongly for and recommend your brand or product.
Strong Predictive Relationship to Sales
MotiveQuest worked with MINI and their agency BSSP to measure the impact of online promoters to sales. The analysis covered 16 months of data from January 2006 through April of 2007. The graph to the right shows the correlation the monthly change in online promoters for the previous month versus the change in sales. For example the point in the upper right is MINI’s monthly change in sales from April to May 2006 and the change in online promoters from March to April 2006. Statistical analysis gives 99.8% confidence that the metrics are positively correlated.
So, if your marketing activities (social media and otherwise) can drive your online promoter score – then we have ROI!