Marketers are usually challenged to justify word of mouth social media marketing programs to the finance department. With economic challenges ahead, your job doesn’t get easier.
As someone who’s focuses on both creative and measurement, and as Interim CFO at Bazaarvoice, I started thinking more about the question of what marketers need to sell CFOs on the social marketing opportunity. Ultimately everything comes down to the bottom line – drive revenue, margin or costs down – but every marketing strategy has a different familiarity, timeline to ROI, or measurements that have to tie back to the P&L. So the approach to start, grow and sustain social marketing through the eyes of the finance department will differ from doing business as usual. And the justification needs to span beyond the numbers to get the entire management team to understand the ‘ecosystem’ effect of how customers make purchase decisions in a networked world.
I posed a question on LinkediN question to my marketing peers and colleagues: With the economic downturn, how will you convince the CFO that "social" marketing is a priority?
I’ve summarized the 25 answers to the question into these 8 tips:
- Provide financial leaders with hard facts—give numbers representing the anticipated dollar value of social media marketing compared to its cost (ex: anticipated ROI) for your company, cite research on the proven effectiveness of social media (ex: reviews/testimonials turn potential customers into actual customers, which is crucial, especially during an economic downturn) and emphasize that a company should always aim to drive sales (especially when proven tools for doing so exist!)
- Emphasize that capital expenditures necessary for social marketing are often minimal compared to other forms of marketing (even if the time and effort necessary for social media marketing is equivalent to traditional forms of marketing, the return on investment has the potential to be much higher), emphasize that driving $1 of sales revenue costs less with social media marketing than with traditional marketing, investing in social media marketing can help companies reduce cost drivers during an economic downturn (ex: Ratings & Reviews result in lower product returns and thus lower unnecessary costs associated with them)
- Demonstrate the value to your company of existing social media and how new social media initiatives would create more value than (and could possibly replace) stale company practices in place today (ex: compare direct revenue from social media marketing to that raised by other traffic, demonstrate value of free social media marketing as an argument for additional social media marketing investment)
- Explain that social media marketing creates brand ambassadors who market for free—social media marketing represents a cost-effective marketing alternative that drives actual results and can spur a viral marketing campaign
- Note that social media is here to stay—the proven effectiveness of social media and consumer dependence on it indicate it is here to stay and failure to partake will result in missed opportunities (becoming actively involved in social media will give your company a chance to influence what’s being said about your brand as well as a chance to listen and respond to the current conversation)
- Keep tabs on the effective social media marketing initiatives of your competitors—it’s important not to fall behind
- Identify social media tools used effectively by other companies and think of which social media tools will help you deliver what your customers want
- Show the CFO SEO—For example, present the CFO with consumer feedback about your company already on the Web (Google your company) to encourage his/her interest in developing a dialogue with those consumers