“Money is money.”
That might sound like the simplest business lesson there is — the kind of thing most people understand before they even learn to read. But as Olivier Blanchard noted at the Buzz2010 event (full disclosure: SmartBrief helped organize the event) it’s often the first business principle people ignore when they start talking about social media. Social-media gurus love to pretend that ROI stands for “return on involvement” or “return on innovation.” But it doesn’t. It’s return on investment — as in money.
Word of mouth is not money. Engagement is not money. Buzz is not money. Those things can all be gateways to money, but unless you can make the conversion, they’re all ultimately worthless. Only money is money.
Social media isn’t free. The time it takes to run a social-medial campaign diverts resources (time, talent, technology) from other activities. So it needs to pull its own weight. Blanchard argues that there are three ways this can happen. Your social media campaign must either:
- Increase how often your customers buy from you. (Frequency)
- Increase your total number of customers. (Reach)
- Increase how much each customer spends with you. (Yield)
Frequency, reach and yield — if your social-media campaign doesn’t pass the FRY test, it’s not generating ROI, Blanchard argues. Of course, calculating exactly how much your social-media campaign has improved your FRY rating can be a little tricky. Luckily, Blanchard walked the Buzz2010 audience through the process in his presentation. Check out the slides from his presentation and sign up for SmartBrief on Social Media to stay up to date on the latest developments in social media.
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[...] Does your social-media campaign pass the FRY test? (smartblogs.com) [...]
Excellent post! Thanks so much.
Well yes at the end of the day you have to measure things in terms of money but not always. Thanks for sharing.
Great slideset! A for-profit business must quantify desired reduced expenses or increased revenue as their Return on Investment. Then you ask questions around how social media might contribute. Yet another example of how classic marketing says to determine strategy (outcome) first then the appropriate tactics (e.g. social media).
Great slideset! A for-profit business must quantify desired reduced expenses or increased revenue as their Return on Investment. Then you ask questions around how social media might contribute. Yet another example of how classic marketing says to determine strategy (outcome) first then the appropriate tactics (e.g. social media).
[...] This post was mentioned on Twitter by SmartBrief on SocMed, SmartBrief on SocMed, Jason Murphy, Judy Bradt, Judy Bradt and others. Judy Bradt said: RT @SBoSM: Does your social-media campaign pass the FRY test? http://ow.ly/2tiJm [...]
Wow!
This is one of the most focused presentation on Social Media ROI that I have seen.
FRY is going to be my new Buzz word
Thank You Very Much for such an awesome insight!
Great stuff. I love how you demonstrated how to get past the tools to the real nitty gritty stuff of what you want to accomplish. It is so important to not focus on the tools but to have a plan on how to get there.
[...] Does your social-media campaign pass the FRY test? [...]
[...] “Frequency, reach and yield — if your social-media campaign doesn’t pass the FRY test, it’s not generating ROI, Blanchard argues.” (Read more in the post on SmartBlogs). [...]
[...] are driven back to you are: frequency of purchase, total reach to customers, and monetary yield (Olivier Blanchard’s “ FRY Test” [...]
Just came across this post. I agree with Daniel – best and most clearly focused presentation on planning marketing efforts that may or may not include social media. Refreshing – Thanks!