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Scarlett Letter #145: Hard and Soft Social Media ROI. Return on Investment (and Impressions!)

In preparation for an upcoming NEOCON presentation, I recently calculated my social media ROI from 2012 YTD contracts. It was encouraging to discover that—relative to 2011—Scarlett Consulting’s overall business has indeed grown from leads that originated online.

This straightforward calculation included only those opportunities where:

1. The lead originated completely online. {Even if a prospect did research and became ‘convinced’ to talk with Scarlett Consulting based upon our online presence, I did not include them if we had any sort of real-life connection.}

2. Real fee proposals were requested.

Upon spending approximately (educated guess) 25-30% of my business development time engaged in online activity—blog posts; Twitter; LinkedIn; community forums—our numbers for Q1 and Q2 of 2012 look like this:

TOTAL OPPORTUNITIES (WINS & LOSSES):
30% of revenue (fees)
33% of proposals submitted

ACTUAL WINS (CLOSED DEALS):
25% of revenue (fees)
17% of proposals submitted

OBSERVATIONS AND MUSINGS:

1. Each lead that was generated online was subsequently nurtured with offline phone calls, visits, networking, and research.  None of my online leads resulted in an immediate win, however, I do have an AEC colleague who has jumped right from online leads into negotiating a contracts (with no competition nor additional legwork). Wow!

1a. An AEC professional that I greatly respect, Christopher Parsons from Knowledge Architecture and founder of KA Connect, brought up a valid point on this topic of Social Media ROI. Paraphrasing, he said the lines are blurry in terms of online and offline activity. The two activities are so fully intertwined that it becomes difficult to identify which business can honestly be credited to social media/online activity, versus which new business was won (both originated and developed) via offline activity. In my simple calculation, I chose to credit social media/online for the project opportunity, even though the I fully developed each one through the offline activities mentioned above.  Why? Because those prospects may neve have found me otherwise. I liken it to when I would attribute a project win to a newsletter or published article or networking event. All of those activities required additional nurturing, but they originated from those sources.

2. Most, but not all times, the leads that originated from online activity were about 25% lower in fee dollars relative to offline leads.

2a. Time will tell if my online and offline generated leads will be virtually the same in terms of fee opportunity per project.

3. On average, I spend about 50-60% of my time doing business development, of which 25-30% of that is devoted to online engagement.

3a. It’s hard to assign a value to ‘time’, which is probably one reason why so many of us have trouble measuring our social media ROI. Depending upon your firm size and utilization/tracking/overhead methods, it varies in terms of how to best measure the value of time. Is it based upon lost opportunity (where time could be spent elsewhere)? Hourly rates? Adjusted hourly rates? How does your firm measure the I in ROI?

4. Finally, in addition to the hard ROI mentioned above, Scarlett Consulting has realized social media soft ROI, including: increased speaking engagement invitations; increased potential strategic business partners; more business queries outside of the Midwest; and the ability to eliminate specific marketing efforts such as press releases, e-newsletters, etc.

I’d love to hear how your firm is measuring your hard and soft ROI.

 

Tags: AEC social media and online marketing, AEC soft and hard ROI, Anne Scarlett A/E Marketing, linkedin, social media ROI

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May 17, 2012

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