What's your Twitter ROI? How to measure social media payoff

Yes, you can measure the ROI of marketing via social media campaigns -- really

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Litle & Co. in Lowell, Mass., is now at that point. The company, a payment-processing center for other businesses, has been using social media sites for two years, says John Stevens, director of corporate content and communications. Those tools include a wiki designed for its own developers, and Twitter and LinkedIn for connecting with customers.

"We have begun to look very hard at what the ROI is, what is that value, and how do we actually quantify it," Stevens says.

The company has had leads on new clients come in through Twitter and LinkedIn, and employees have been able to provide real-time customer service through them too, he says.

"In the softer world, they've proven themselves out," Stevens says. He also says the company has seen "six-figure revenue come in because of the connections made through social media."

But Litle is now trying to gauge the benefits of communicating with customers through social media channels rather than via e-mail or phone calls.

"If you're using the available mainstream social media that you don't have to serve, host or secure, then you're talking about a number of different value drivers," Stevens explains. "And when you look at the value of conversations with people, then you can ask whether you can spend less time in a 140-character tweet versus a 15-minute conversation on the phone. So we're beginning to measure that: Is it a less costly service channel than phone or e-mail, and is it preferred?"

Getting firm ROI figures is key, Steven adds, because the company is deciding whether to continue using public sites such as Twitter or build proprietary systems that meet its own security standards for sensitive financial and corporate information.

The ROI figures will help Litle determine whether it's worth building propriety systems, which Stevens estimates would cost well over $100,000 in hardware and software.

"But there's no elixir that tells us how to get our answer," he says.

Some companies that have built their own social media infrastructures are finding that the ROI is solid.

One of them is IBM, which set up its own versions of popular social media applications because it wanted to be able to authenticate users and ensure security, says Carol Sormilic, vice president of social media at IBM. The company's internal version of Wikipedia, called Bluepedia, is a global intranet encyclopedia of all things IBM that's co-authored by employees. Its in-house version of Twitter is called BlueTwit, and its internal version of Facebook is called Beehive.

The sites have a social component, with photo contests and the like running on them, but Sormilic says they have real business value, too. "It starts to make the organization much smaller. It flattens the organization. And we're exchanging ideas," she says.

IBM has calculated the ROI for its efforts, but it declines to release specific numbers. Sormilic notes that some of the returns from social media are soft benefits, such as the ability to promote a better exchange of information among a geographically dispersed workforce.

Sormilic says IBM's social media tools have also delivered work efficiencies that cut costs. She points to the time savings among IBM salespeople, who use the tools to gain real-time access to the technology content they need to close deals and to connect immediately with IBM experts to assist existing and would-be customers.

"We have found that these new collaborative tools have helped reduce non-value-added time," she says. "The results were very positive."

NEXT: One company's ROI tally for social media

Related stories:

Pratt is a Computerworld contributing writer in Waltham, Mass. Contact her at marykpratt@verizon.net.

Copyright © 2009 IDG Communications, Inc.

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