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SOCIAL MEDIA The future of social media ROI As with 3M Singapore, these brands have invested the time, energy and tools Left: UK to cultivate strong relationships with fast food chain, Pret A their communities. This is the first step Manger,has on a longer journey focused on creating invested and evaluating relationships. Instead of heavily in blindly investing in paid reach – such as nurturing social media advertisements – brands should focus relationships on what truly matters in the long-term with customers and create sustained interactions with customers. As a second step, companies should From positional equity requires more refined measurement as it focus on building relational metrics, in to relational equity is determined by the kind of responses or addition to positional ones. Importantly, Yet, on all three counts, relying on these feedback on your posts/photos/videos/ managers should make the distinction metrics is a contradiction of the essence infographics (for example, ‘thank you’ between positional equity and relational of social media – communication tools messages, messages of encouragement, equity early on in the phases of planning that create and strengthen relationships positive shares, etc). their social media marketing strategy. between people. It would be a gross To assess relational and positional Next, marketers and business managers mistake to think that social media ROI can equities, we call for managers to build and should focus on their content strategies. be measured as any other communication rely on relational metrics, not positional We live in a time where social media channel, precisely because its nature is ones and act accordingly to maximise has disrupted industries, started a fundamentally different from that of other these metrics. myriad political movements and has even media channels. contributed to overthrowing governments. Rather than being a ‘stock media’, where From presence to action Every business wants to harness the the number of impressions represents Some brands have already paved the road power of social media. Yet, with the the main outcome, social media is a ‘flow by adopting strategies and best practices fast-changing nature and proliferation of media’, defined by the depth and breadth of that focus on building, strengthening platforms, many businesses get caught relationships between brands and various and measuring relationships with their up in being present on social media, stakeholders. customers. For instance, one of the reporting their success to management While many organisations tend to place UK’s largest fast food chains, Pret A in conventional ROI terms, and tend to too much importance on the quantity that Manger, has invested heavily in nurturing forget about growing engagement. What accurately represents their position in the relationships with customers. businesses need to do when measuring competitive landscape – i.e. their positional Despite having a smaller community ROI is take into account both the equity – at a given moment, what they often than its competitors, the brand has positional and relational to reflect social overlook is the relational equity with their focused its efforts on responding media’s true added value. community and stakeholders. For example, in effectively to customers, offering great many of our conversations with top executive value and exclusive discounts to their management, managers tend to compare community, and turning community- how well they are doing in terms of fans and sourced recipes into actual products. Pret follower count against their competitors. A Manger even shared the story of how While this is a start, we believe that its coffee is grown. what they should really be paying attention The company’s content clearly reflects David Dubois is an Assistant Professor of to is how close their brand is to their the brand’s positioning around creativity, Marketing at INSEAD Business School community. How many comments do the passion for fresh food and good humour. in France. This article was written in social assets receive every day? How many This has resulted in a Facebook ‘People conjunction with Marcus Ho, Co-Founder of them are being replied to? What is the Talking About’ score of 1,39% (which of Social Metric, a social media firm based social sentiment of the brand? means 1,39% of people who saw a post in Singapore. This article is republished While positional equity is determined by reacted to it by talking about it or sharing courtesy of INSEAD Knowledge quantitative measurements such as number it). Most Facebook pages typically score (http://knowledge.insead.edu). of likes, fans, shares, etc., relational equity below 1%. Copyright INSEAD 2014. 28 strategicmarketingafrica Third quarter 2014 26-29 Social Media v3.indd 40 2014/06/26 3:51 PM