Quantifying the unquantifiable – ROI through Social Media

Ladies and Gentlemen, welcome to the last week’s post for Enterprise 2.0, featuring the ROI generated through the implementation of social media by the Indian ice cream company, Hokey Pokey. It’s been fun, it really has; but the weeks’ tasks have run out, and I present to you my final post from QUT’s Enterprise 2.0 subject (fuelled and driven by the prestigious Jason Watson). Now that’s not to say I won’t continue to blog using my own thoughts to drive the direction of the blog, but I do hope to influence everyone’s views on social technology and enterprise / web 2.0’s favourable uses in today’s tech-saturated environment. But I digress, let us move to the meat of this post. I don’t usually post the task, but as this week’s topic is a little research-heavy (and my own case being a bit abroad) I will start the content with some background on the task.

To identify and discuss an additional ROI case example on your blog. What is your view on how ROI was calculated? Did they include all the tangible and intangible benefits? What are the strengths and weaknesses of their approach?

Week 10’s Blog Topic

For those who love TLA’s (three letter acronyms), I wouldn’t need to spell out ROI, but as this isn’t a regular term associated with social media, it stands for return on investment, a metric to measure the favourable (or negative) returns of an investment made over an annual rate. Studying business analysis, I can happily say I fully understand the concept and hope to convey its meaning to my readers through its application with social media.

I scream, you scream

We all scream for…. a quantifiable measurement of the effects of social media through word of mouth (WOM), customer influence effect (CIE) and customer influence value (CIV). I’m pretty sure that’s how the song goes… The aim of this week’s post is to discuss the ROI of a social media implementation, through my chosen case study of Hokey Pokey, and to review the measurements made, both quantifiable and qualitative. I searched for an interesting case, as I usually do, and found this example, whereby a company set out to quantify the effect of word of mouth from two particular advertising campaigns, “Creations on the wall” and “Share your Brownies”. The campaigns focused on encouraging their customers to create their own signature ice cream, and then share it at the store’s location and online. Furthermore, gamification was added to the campaign to award points to people’s creations when they were purchased, earning the creator discounts and prizes. “That’s a pretty neat campaign, but how does ROI play a role in this?”.

Overview of the Research Study

Overview of the Research Study
-(Kumar, Bhaskaran, Mirchandani, & Shah, 2013)

The company spent six months observing the interactions and discussions people had in regards to ice cream. This provided a solid basis on how to best invest their money into a set of advertising strategies to be based within social media. For a brief synopsis of the case study, Adi Gaskell blogged about the successes realised through the seven steps Hokey Pokey undertook.

Word of Mouth as a figure

Now that we understand what it is Hokey Pokey was trying to achieve, let’s look at the manner by which they broke down these unquantifiable measures for analysis.

Process of Measuring the CIE, CIV and CLV

Process of Measuring the CIE, CIV and CLV

This is quite a new take on the measurement of unquantifiable attributes. The manner in which Hokey Pokey was able to utilise WOM, CIE, CIV and now customer lifetime value (CLV), allows for a greater understanding of the ROI of social media. Each of these factors is considered a value, and can be formed into an equation to generate a direct value. As this post is getting quite theory-heavy, I’ll refrain from embedding each equation for CIE, CIV and CLV, but I implore you to take a look at the case study and its many metrics to what we would assume is unquantifiable.

What was the final result?

Hokey Pokey, as a small business, was able to utilise this understanding of the different metrics to increase their sales by 40%. This may not sound like much (in comparison to say, Blend Tech’s 700%), but again, we need to look at the effect of these key indicators of social media.

Pre and Post-Performance Metrics

Pre and Post-Performance Metrics

As we can see, sales revenue is just one figure in the ROI of Hokey Pokey’s two advertising strategies. The effect of ‘growth in brand awareness’ and ‘number of positive WOM instances’ have been factored in to show the true nature of social media’s implementation in small businesses. What were the strengths of this case? Creating quantifiable measurements to show the impact of social media on small businesses. The weaknesses? One could argue the sales revenue of Hokey Pokey was increased by only a small amount, detracting from the total value of the strategies implemented. However, I hope this post (and its analysis) has swayed your perspective on the ROI of social media like it has for me, providing insight into the many other attributes and measurements that should be effectively analysed when determining the true value of any social media implementation.

When it’s all said and done

Thanks for sticking with me, everyone. I know this post has been a little theory heavy (and that’s with me withholding some of the other tables and figures I wanted to include), but I wanted to share this unique view on the quantification of certain elements of social media that is hard to write down as being of a particular measurable value. I’d like to thank all my readers, and Jason Watson for providing us all with a chance to create and improve our digital image. Shout outs to Conor and Adam for their quality blogs, useless facts and quotes of the week.

Thanks for reading, all. I hope to continue my posts in the future, and hope you can join me once again.

To end it all, here’s a Scottish band I was introduced to during my latest adventures abroad.

Sources from this link-heavy post

Hokey Pokey’s Site
The Case Study in question
Jason Watson’s LinkedIn Page
ROI Definition
WOM Definition
Adi Gaskell’s Blog
Adam’s Blog
Conor’s Blog

The study’s source –
Kumar, V., Bhaskaran, V., Mirchandani, R., & Shah, M. (2013). Practice Prize Winner—Creating a Measurable Social Media Marketing Strategy: Increasing the Value and ROI of Intangibles and Tangibles for Hokey Pokey. Marketing Science, 32(2), 194-212.


6 responses to “Quantifying the unquantifiable – ROI through Social Media

    • It certainly shows an importance in if not quantifying such things as return customers and social growth and customer influences, it shows the importance of understanding the value of these intangible or soft goals. While spending time and effort to translate these values to figures may not be necessary in every case, stepping forward and embracing these aspects as critical success factors for marketing and social growth should not be ignored.

  1. This was a good informative read ! I have just finished writing my own blog http://wp.me/p3LAAa-1J on Red Bull and how they utilize entertaining marketing strategies to lure their customer base. However, I found that a lot of the ROI was “un-quantifiable”; as in it was a lot to do with their reputation and brand image that they wanted to focus on. It’s good to know that this type of ROI is in fact quantifiable in terms of ROI, I believe that increasing the overall brand strength and reach also directly relates to increases in the revenue and sales.

    What were the weaknesses that you found ? Is it difficult for companies to express this type of ROI as true value ?

    • True value is interesting. What deems are marketing campaign as being successful may not always be visibly apparent in the profit / loss statement at the end of the financial year. As you said, luring their customer base to view or act differently (such as sharing interesting or entertaining media with friends) can create an intangible value that won’t be immediately realised. The term “shared value” should be included here. Reaching out with social media tools and applications allows customers to have their say and contact the stores and organisations they are willing to spend money with. This communication benefits both parties, as the customer can have their purchases tailored to suit them, and the organisation creates a better customer satisfaction rating, leading to further purchases, good reputation and the increase in their customer base.
      All things to consider. As a weakness though, the analysis did not mention competitors and their current strategies. While they did spend time analysing the ‘chatter’ of their market, perhaps a focused section on customer reactions with competitors campaigns could have helped improve their 40% revenue.

  2. Your picture of ice-cream on the class Facebook page is what drew me in to read your post and you did not disappoint! What made you choose this organisation to look at? Even though you mention their sales only increased by a small amount, sometimes I think in the long-run, the intangible benefits like word of mouth and good customer relationships can be just as important for maintaining a consumer following. What do you think? If you have the time I would love for your feedback on my latest post about Steaz Organic Tea and ROI:http://brittanysmith2013.wordpress.com/2013/09/30/social-media-and-roi-for-steaz-organic-tea-drinks/ Thanks 🙂

    • The case study takes these intangible benefits into consideration when analysing their value. Yes, the 40% increase in sales is small, but when comparing this to the increase in both customers and their influence (through positive word-of-mouth), we can see the true outcome of reaching out through social media. The consumer following of any company should be analysed to best create products that will both satisfy their customers and increase their market share. Pulling customers away from other companies is standard practise in any organisation, and keeping the customer as their number one priority may seem like a show, but with social media, the emphasis on customer satisfaction can be maintained and utilised to increase a company’s reputation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s