Easy Ways Retailers. 3Social Media Efforts

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1 Easy Ways Retailers Can Measure ROI From 3Social Media Efforts Results and Lessons from 4 Likeable Retail Brands media

2 CONTENTS EXECUTIVE SUMMARY... 3 INTRODUCTION... 3 SOCIAL MEDIA MEASUREMENT OVERVIEW... 4 THREE EASY ROI METHODS FOR RETAIL BRANDS... 6 CASE STUDIES FROM 4 LIKEABLE BRANDS... 6 Traditional ROI %: Cumberland Farms, Things Remembered, and The Company Store... 6 Facebook Fan Value: Things Remembered Coupon Redemptions: Midwestern convenience store CONCLUSION ABOUT LIKEABLE MEDIA... 12

3 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 2 EXECUTIVE SUMMARY Social Media Return on Investment (ROI) has been on marketers minds for years. While other marketing channels have relatively consistent approaches to ROI, companies have yet to land on an agreed upon method for determining Social Media ROI. We developed this paper to show how retail brands can measure Social Media ROI using three easy methods: Traditional ROI, Facebook Fan Value, and Coupon Redemptions. Each of the three methods is illustrated using case studies from four Likeable retail brands. Cumberland Farms created a Free-Chill-Zone- Day that led to huge word-of-mouth success with over half of sales attributed to Facebook. Things Remembered carried out two promotions that drew positive ROI a wellgenerated one-day social campaign for bridesto-be and an in-store social promotion for Facebook fans. The Company Store established a presence on Pinterest and saw significant sales in the first few months. Finally, a Midwestern convenience store implemented an ongoing weekly blast promotion through Facebook and Twitter using unique price lookup codes. INTRODUCTION Several studies have been released showing the effects that social media has on consumer behavior and sales. In April 2012, Forrester Research released The Facebook Factor, a report answering the question: How much more likely are Facebook fans to purchase, consider, and recommend brands compared with nonfans? Using logistic regression modeling, Forrester Research explored a variety of factors that impact whether a consumer will consider, purchase, or recommend a brand. The analysis yielded the Facebook factor and proved that Facebook fans are more likely than non-fans to consider, purchase, and recommend brands Facebook fans are much more likely than nonfans to consider, purchase, and recommend the brands that they engage with on Facebook. In the case of Best Buy, Forrester found that Facebook fans are about twice as likely to purchase from Best Buy as non-fans. Figure 1 Forrester Research, April 2012 Shortly after the Forrester Research report, ComScore published in June 2012 The Power of Like 2: How Social Marketing Works, a study about the effectiveness of Facebook ads and brand posts. In conjunction with Facebook, purchase behavior for Facebook fans of brands and friends of fans was analyzed against a control group. In the case of Target, Facebook fans who saw earned media messages in their newsfeeds were 19 percent more likely to buy products at Target than the group that did not see the messages, and their friends were 27 percent more likely to do so. The study served as an additional piece of evidence in order to

4 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 3 prove to marketers that social media can deliver a measurable marketing ROI. marketing ROI and measurement firm, 55% of marketers surveyed responded that social media measurement is a high priority. The top reasons for its importance include: the need to improve effectiveness the need to improve integration with other marketing the pressure to report quantified outcomes Figure 2 ComScore, June 2012 While the aforementioned studies involve complex modeling and control groups, measuring Social Media ROI can be simple. Likeable Media compiled a number of case studies in this report demonstrating three easy ways for retail brands to better understand how social media translates into real business value. We will walk through the importance of social media measurement, then highlight the methods for measuring Social Media ROI for retail brands, and finally dive into some retail case studies that use each of the methods to show a positive ROI. SOCIAL MEDIA MEASUREMENT OVERVIEW Social media measurement continues to be a top priority for marketers. According to the 55% of marketers surveyed responded that social media measurement is a high priority 2011 Marketing ROI & Measurement Study in 2011 by Lenskold Group, a Figure 3 Lenskold Group, 2011 We have written quite a bit on social media measurement and have even produced an ROI Best Practices ebook showing marketers: how to best evaluate ROI on social media networks how to analyze metrics on specific platforms how measuring ROI is different for each social media platform Before marketers can measure anything or even begin to establish Social Media ROI, we recommend following these five simple rules: Identify what success will look like Do not measure everything Understand that different metrics matter to different people

5 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 4 Do not rely on tools to provide the analysis Focus on the above four rules before tackling Social Media ROI The most important step above is to identify ideal outcomes in order to measure results Adding clarity to the term success will help show progress comparatively. What does success look like? What are you trying to accomplish? What is the return you are after? Adding clarity to the term success will help show progress. Without it, you will only be showing results without any reference point. In addition to identifying success, we reiterate that for social media measurement do not only focus on obtaining likes and follows. More followers and likes do not directly translate into a higher ROI for your brand. People are not making purchasing decisions based on how many likes a brand has. And the companies bringing in the most revenue every year do not necessarily have the most likes on their Facebook pages. Furthermore, with measurement, you cannot and should not measure everything. It is so easy to over-quantify in the space as there are easily With measurement, you cannot and should not measure everything as many social media measurement tools as there are tactics. With terms like sentiment analysis and net promoter score being tossed around everywhere, it is easy to get persuaded into thinking you need to measure everything. The reality is that you really only need to measure what matters to you and what will help craft a strategy moving forward. One of the most basic rules of measurement is to identify and articulate what you want to measure. Another way to improve your measurement strategy is to tie your social activity with a web analytics tool, such as Google Analytics. With third-party tools, you can dive deeper into metrics in meaningful ways such as: Understand and improve your overall social media results. You will not only be able to report on social media activity but how that activity translates into more engaged visitors on your site, more orders purchased, and more feed subscribers, to name a few. Track specific campaigns. See how certain campaigns performed compared with others when it comes to acquisition, behaviors, and outcomes on your website. Once you identify what you want to measure and have a strategy in place, demonstrating an ROI for social media is attainable. The next step is understanding the definition of ROI. ROI is a common way for businesses to evaluate success. This type of measurement for social media specifically has been difficult to grasp as many businesses are unsure how to properly execute it. A look at Social Media ROI helps businesses understand what is working and what is not. To put simply, Social Media ROI is a measure of efficiency. The common and traditional financial formula many use to calculate ROI is:

6 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 5 effectiveness of their marketing efforts. These methods include: Benefits typically refer to revenue, sales, or savings from a campaign. Cost estimates are usually the sum of the outcomes in the following three areas: People: The number of people who worked on the campaign x amount they spent on campaign x their hourly rate Process: Any creative and marketing costs Technology: Any costs associated with technology, systems, etc. If an ROI result shows 250%, we can interpret this as for every dollar spent on the campaign, $2.50 in value was added to the bottom line. To increase ROI, benefits ultimately need to grow while costs and investments are held constant. The higher the ROI, the more efficient and effective the social media campaign. Where The higher the ROI, the more efficient and effective the social media campaign quantify the benefits of social media. marketers seem to struggle is not on the investment input that is easy to obtain and plug in but rather the return variable as it is far more difficult to THREE EASY ROI METHODS FOR RETAIL BRANDS Measuring Social Media ROI does not have to be difficult. We have outlined three methods using four case studies from Likable retail brands that marketers can apply to show the Traditional ROI % Facebook Fan Value Redemptions Each of these approaches is manageable, valuable, and simple. Using a traditional ROI % is as simple as plugging in the investment amount spent on the social media campaign, and the sales generated from such, into the ROI equation. This method is useful when the campaign or marketing efforts in question have some sort of tracking method, whether web tagging or a unique product look-up (PLU) code for in-store purchases. Using the value of a Facebook fan is another great way to measure Social Media ROI. By devising promotions solely for Facebook fans, retail brands can track their activities vs. nonfans and validate if fans are more likely to purchase (and by how much) than non-fans. Finally, in addition to sales data, showing the number of code redemptions as a result of the social campaign or marketing also helps measure the effectiveness. CASE STUDIES FROM 4 LIKEABLE BRANDS TRADITIONAL ROI %: CUMBERLAND FARMS, THINGS REMEMBERED, AND THE COMPANY STORE The following case studies illustrate how positive ROI results can be obtained using the traditional equation: ROI = (benefit cost) / cost %. Acquiring sales data that is directly tied

7 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 6 to a social campaign can be accomplished by presenting unique passwords or codes to customers during the purchase process. Cumberland Farms Figure 4 Facebook wall post and cover photo for Cumberland Farms WHO: Cumberland Farms, a 50 year old northeast gas station and convenience store. The company bought Gulf Oil s gas stations and trademark in the Northeast back in 1986 and now has 600 stores in 11 states. WHAT: Major changes to the store design and layout as well as increases in fuel consumption were occurring around the time of the promotion. During this time, Cumberland Farms was trying to reach too many audiences. However, they did appear to have a passion product in their frozen beverage the Chill Zone product with very little promotion. Previously, the company had been solely focused on traditional media to drive sales. Likeable Media recognized there was an opportunity to leverage the passion for the product to drive offline sales through many inactive advocates. As a result, the Mix Up Yours campaign was born. A well-executed engagement strategy grew an active community from no fans to over 150,000, and a subsequent Free-Chill-Zone-Day Challenge propelled the campaign into an enormous Word of Mouth marketing success. The Free-Chill-Zone-Day Challenge arose from fans posting that they wanted more free Chill Zone products. As a result, Cumberland Farms responded with a challenge promoted only on Facebook: if the fan base reached 50,000 Likes within 22 days, a Free Chill Zone Day would take place. HOW: A Facebook password was needed in order to redeem the drink. Cashiers then recorded those who used the password during transactions and as a result, sales numbers could ultimately be tied to this promotion. Using the investment dollars that were put into the promotion and the revenue that was generated from such, the ROI was calculated. RESULTS: In addition to the goal being reached in 10 days, the campaign: Figure 5 A Cumberland Farms store during the Free Chill Zone Day Had 50% of sales directly tied to Facebook

8 WHITEPAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 8 Increased Chill Zone redemption rates by 20% in the first year and 23% in the second year Overall, the Mix Up Yours campaign generated a 228% in ROI for Cumberland Farms. While the sales information is proprietary and cannot be disclosed, the following formula was used to determine the ROI: Things Remembered ROI = Benefits Cost Cost ROI = 228% received expert advice by simply showing their engaged Facebook status in stores via their smartphones or a print-out. This one day only social campaign run through Likeable Media was promoted starting two weeks prior to the event via frequent Facebook and Twitter content, Facebook ads, and one blast. HOW: Since a free personalized gift was given away as part of the promotion, cashiers were able to record all transactions that included such and thus all revenue tied to this promotion was recorded. Using the investment that was put into the promotion as well as the revenue numbers generated, the ROI for this campaign was calculated. RESULTS: For the one day promotion, Things Remembered saw some notable outcomes: 53% of all stores had a transaction that included the free gift Of the stores that did have a transaction, the average store pulled in one additional transaction and one third of stores had additional sales on top of the free offer Figure 6 Facebook tab and ad used in the Brides-to-Be Promotion WHO: Things Remembered is the nation's largest and most prominent retailer of personalized gifts with 600 retail stores in 48 states. WHAT: Summer is the busy season for weddings. Things Remembered wanted to celebrate brides-to-be and offer its Facebook fans an opportunity to attend exclusive events at their local retail store. Attendees were given a free personalized gift, private shopping, and 23.6% of the revenue increase for this day compared to the same day last year came from sales related to this promotion Overall, the Bride to Be Promotion had a 670% ROI. While the sales information is proprietary and cannot be disclosed, the following formula was used to determine the ROI: ROI = Benefits Cost Cost ROI = 670%

9 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 8 The Company Store to share The Company Store boards, pins, etc. The Company Store relies on orders mainly from its website and catalogue. This further proved the need to have a presence on Pinterest as this site would presumably drive additional visits and sales to the website. Figure 7 The Company Store s profile on Pinterest WHO: The Company Store, founded in 1911, manufactures quality down and bedding essentials. With a limited number of retail stores, The Company Store relies on most of its sales from its website and catalog. WHAT: Pinterest is one of the fastest growing social media sites according to The 2012 Digital Marketer: Benchmark and Trend Report from Experian Hitwise. The Company Store saw a great opportunity to use Pinterest to increase traffic to its website and ultimately drive sales given that: The demographics of Pinterest users are also the key demographics for customers of The Company Store. According to ComScore, around 68% of Pinterest users are women and 27% are between the ages of The Company Store recognized Pinterest as a prime opportunity to target their demographic on a network that they were already using. HOW: The Company Store used Likeable Media to develop its Pinterest profile and boards. By using a web analytics tool, sales generated from customers coming from Pinterest were documented. Incorporating the investment that was put into maintaining the Pinterest account as well as sales tied from the site into the ROI formula, the ROI for this campaign was calculated. RESULTS: In its first 2 months on Pinterest, The Company Store had: 35 boards on Pinterest with more than 600 total followers Over 29,500 visits to its website driven from Pinterest Significant sales from Pinterest Overall, Pinterest has driven a 224% ROI for The Company Store. While the sales information is proprietary and cannot be disclosed, the following formula was used to determine the ROI. Many design bloggers interested in The Company Store products were already using Pinterest and had been for a long time. Launching a profile on Pinterest would be a great way for the bloggers ROI = Benefits Cost Cost ROI = 224%

10 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 9 FACEBOOK FAN VALUE: THINGS REMEMBERED The next case study shows how positive ROI results can be measured using the value of a Facebook fan. Showing sales data directly tied to Facebook fans can be attained by asking customers to show their fan status (for a special deal perhaps) during the check-out process and would ultimately be recorded during the purchasing process. Things Remembered store to receive the double rewards. The promotion ran from October 31, January 16, 2012 across all 600 retail stores. HOW: Upon checkout in stores, customers showed the cashiers that they liked Things Remembered on Facebook using their mobile phones. For all transactions during the promotion period, the cashiers would record whether or not the purchaser was a Facebook fan of Things Remembered. Sales during this period were then ultimately tied to the Facebook fan factor. RESULTS: The campaign was a huge success and showed some impressive outcomes: 20% of buyers liked Things Remembered on Facebook during the promotion time period. 63% of Facebook fans were new to the company. Figure 8 Mobile version of Facebook page for Things Remembered WHO: Things Remembered is the nation's largest and most prominent retailer of personalized gifts with 600 retail stores in 48 states. WHAT: Things Remembered wanted to offer Facebook fans the opportunity to earn double rewards on purchases through an in-store promotion. The goals were simple: Overall, Facebook fans purchasing during the promotion time period had a 35% higher Average Dollar Sale (ADS) than non-fans. COUPON REDEMPTIONS: A MIDWESTERN CONVENIENCE STORE The final case study shows how ROI can be measured using codes redeemed from social campaigns. Sales data directly tied to social sites can be achieved by providing unique codes for fans/followers that they can use during the check-out process. Increase Facebook Fans Drive sales Customers needed to like Things Remembered on Facebook on their mobile device while in the

11 WHITE PAPER 3 Easy Ways Retailers Can Measure ROI From Social Media Efforts 10 A Midwestern Convenience Store HOW: A different code was provided via Twitter and Facebook posts each week for the promotional item. Once in store, the customer would provide the code to the cashier upon check-out and the cashier would then record it in the system. All transactions using the unique PLU code were therefore tracked. RESULTS: With the promotion blasts, the Midwestern convenience store has seen 56,173 codes redeemed that are tied directly to Facebook and Twitter just in the span of one year. Figure 9 Example of promotion post on brand s Facebook page WHO: Company with chain of convenience stores in the Midwest. WHAT: To reward Facebook fans and Twitter followers and ultimately increase sales, the Midwestern convenience store created an ongoing promotion with Likeable Media by giving out free items weekly on Facebook and Twitter. Using the unique price look-up (PLU) code, customers would tell it to the cashier or show it on their phone in order to receive the item. CONCLUSION We have laid out three easy methods for retail brands to measure Social Media ROI: Traditional ROI %, Facebook Fan Value, and Coupon Redemptions. Use these methods and follow the approaches taken in the case studies to understand and show how social media translates into real business value and how campaigns can demonstrate a positive ROI. Of course, everything should tie back to your core business goals.

12 For more information on how social media can drive ROI for your brand, please Mallorie Rosenbluth at media About Likeable Media Likeable Media is an award-winning, global social media and word of mouth marketing firm with a focus on the creation of compelling content. Likeable Media has worked with over 200 brands such as The Company Store, Things Remembered, Omaha Steaks, 1800flowers.com, Quality Dairy, Cumberland Farms, The Pampered Chef, Pendaflex, Ritani, Verizon, and Logitech. Likeable Media is recognized as one of Facebook's top 90 Preferred Developer Consultants, and is the only agency to win three consecutive WOMMY awards from the Word of Mouth Marketing Association (WOMMA). Likeable Media was named #118 and #146 in 2011 and 2012, respectively, on the Inc 500 Fastest-Growing U.S. Companies. Likeable consists of Likeable Media, as well as the corporate training program, Likeable U, and the small business software product, Likeable Local. Want to learn more? contact@likeable.com