Non-financial vs. Financial


The fictitious example used, Teach a Kid to Swim campaign, indicates that the number of students attending the camp has increased (no hard numbers) but within this increase, the number of students attending for free has also increased. Measuring soft ROI and hard ROI, or non-financial outcomes vs. financial outcomes could be complicated. According to Olivier Blanchard, hard ROI can only be measured in currency, in dollar value only. Whereas soft ROI, or nonfinancial outcomes, are the intermediate metrics that fill the gaps between the initial investment and the return. They tell the story by capturing changes in customer behavior. It gives us an idea of what happened between the time a program is assigned its budget and the time it yields a measurable return.
Examples of social media that can be used to initiate engagement could include the launching of a new Facebook page with comments area, tweets, blogs, press releases, and podcasts; creating and following an activities timeline for the delivery of each of these strategies is critical.
Measuring the soft ROI could include monitoring the volume of mentions around the Teach A Kid to Swim campaign. In other words, measuring how many times your organization’s name is mentioned across the web and measuring the volume of mentions as well as channel to channel over time can help.

Measuring the mix of sentiment from these mentions (negative vs. positive context), measuring the number of fans, followers, shares, likes, recommendations, requests for information, email sign-ups, registrations, etc., are measurements of soft ROI.
Blanchard’s Investment-return relationship figure:
Investment→→Action→→Reaction→→Nonfinancial Impact (Soft ROI) →→Financial Impact (Hard ROI)

Converting soft ROI into hard ROI = Converting funding into activities on the social web. These activities are converted into interactions between the organization and the users of social media – which is converted into nonfinancial outcomes (followers, mentions, sentiment, clicks, downloads, recommendations, replies, participation in chats, shares, likes, retweets, etc.). At the end of the line, nonfinancial outcomes are converted into financial outcomes.

Creating promotional codes and links exclusively to certain members can help to accurately track the effectiveness of a social media campaign. These promotional codes could be sent to past participants to increase or encourage return attendance.

A webpage with camp participant testimonials and camp Youtube videos could be used to increase visibility, donors, and brand trust.


1 Comment

  1. Lori another good post.
    Although I highly recommend Olivier’s book, I don’t agree that measuring Soft ROI and converting it to Hard ROI is difficult. What we forget to take into consideration that for years we have been asked to effectively measure Soft ROI campaigns such as PR and Marketing Campaigns. And our CFO’s have been asking us to find a way to convert not all, but some of the activities into revenues.

    Organizations and companies are still struggling with how to justify adding social media into their organizational umbrella. But it is easy to do if during the strategic process you really think through the what, why, how and when.

    What are you going to measure?
    Why are you measuring?
    How are you going to measure and convert?
    And when ( how long is the decision to buy process ) will this conversion take place?

    A lot of SEO professionals and consultants are still tasked by employers and clients to eventually demonstrate how a particular activity, offline and online will convert to brand loyalty, increased awareness, community and eventually revenue growth.

    Again, another good post! Liked it.


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