HubSpot's Social Media Delivers on ROI

In some of my previous posts, I suggested that social media is highly effective in generating marketing ROI.

Last week, I interviewed Mike Volpe, VP of Marketing HubSpot, for his perspective on social media ROI.

HubSpot is a stellar example of how a small business can excel in social media marketing and in the process, attract $17 million in venture capital for a social media and online marketing solution (read more on why small business succeeds with social media).

Mike started off our discussion by observing that most marketers believe that social media is only suitable for creating buzz and fostering brands.

However Mike disagrees and with good reason: HubSpot favors social media for demand generation.

HubSpot’s inquiries from social media support Mike’s position. Below are selected social media results for June 2008:

Editors Note: Although HubSpot defines ‘leads’ as any prospect who has completed an online form, it is more accurate to define these unqualified responders as ‘inquiries’.

Mike has calculated his cost-per-inquiry as $10 per inquiry and includes the marketing overheads for content creation. This compares favorably to the $75 per inquiry he would pay for traditional outbound marketing.

Although Mike was unable to share the ROI on his social media marketing programs, he indicated that the ROI on social media is many times more than traditional outbound marketing programs.

This has created a ‘fun’ sales and marketing environment where salespeople do not make cold calls and marketing managers avoid having to focus on marginal improvements in response rates and trying to avoid spam filters.

Mike’s advice is that social media should be viewed as any other top of funnel marketing activity. The goal is to build an audience rather than a database. Marketers should create content or tools that engage prospects to realize a social media outcome. Offers and calls-to-action will help move prospects along the buying cycle.

HubSpot’s audience numbers are impressive with 6,000 blog subscribers and 3,000 webinar registrants – far surpassing HubSpot’s forecasts.

Mike acknowledged that it can be difficult to measure interactions amongst social media and the impact on prospect conversions. However, HubSpot has generated a significant number of prospects and sales who can be attributed to clicking from a singular social media source.

I wish HubSpot continued success and applaud their success in defining ROI on social media.

P.S. I have to congratulate Mike on not once plugging his use of their own social media software as the key to HubSpot’s accomplishments.

A Community Turns One Year Old

If Social Media Today is a toddler, then that would make me a newborn.

A few weeks back I was invited to blog on Social Media Today and now would like to send my congratulations to the team.

Happy Birthday to you! Thanks for inviting me to the online Party!

Crowdsourcing: Wikipedia vs. The Economist

Two diverse questions came to mind as I read an article on crowdsourcing:

1. Is crowdsourcing losing its appeal?
2. Is journalism threatened by Wikipedia?

Recently, the Economist published an article on crowdsourcing that discussed the past and future of this social medium where idea generation is outsourced to online crowds.

The author illustrated the success of crowdsourcing with examples drawn from Wikipedia, the Library of Congress (using Flikr) and Google.

According to article, the cost savings on crowdsourcing can evaporate when intellectual property such as product designs must be legally verified as to their ownership. In addition, a volunteer model such as Wikipedia would be disrupted should Wikipedia evolve to a for-profit business.

Next I turned to Wikipedia for their perspective on crowdsourcing.

I was interested to see that many of the same success stories and pros and cons on crowdsourcing were shared by the Economist and Wikipedia.

We know that Wikipedia has trumped Encyclopedia Britannica but does this extend to magazines such as the venerable Economist?

As Don Tapscott and Anthony Williams observe in the book Wikinomics, the strength of Wikipedia is the substantial number of edits made by the Wikipedia community of volunteers - an average of 20 edits per article. In a similar fashion to open source software, the community is constantly updating and revising articles.

Given this dynamic state, perhaps Wikipedia is as much to threat to journalism as YouTube is to TV.

Delivering ROI on Social Media

My last post discussed why the nature of social media need not be compromised by pursuing lead generation through these new media.

Today, let's turn to some examples of how B2B marketers are embracing social media for this purpose.

A few weeks ago, McKinsey & Company released the results of their latest survey on social media: Building the Web 2.0 Enterprise: McKinsey Global Survey Results. The buzz on this report included a post from Peter Kim, a fellow Social Media Today blogger.

The McKinsey survey struck a chord with me in that 94% of responding executives deployed Web 2.0 media targeting internal parties versus 87% who interfaced with customers. This indicates an almost equal propensity to use these tools to communicate to both external and internal parties.

In targeting customers, improving customer service and acquiring new customers in internal markets were #1 (73%) and #2 (71%) respectively.

In other words, a significant proportion of survey respondents are using Web 2.0 tools for customer acquisition.

So if organizations are using social media to acquire customers, then how can we measure ROI?

An easy answer lies with blogging - the rainmaker of social media.

If your goal is to attract visitors to your website, blogs are an ideal medium to publish fresh, relevant content with keywords that attract the search engines like bees to honey.

Leads generated from organic or natural search results are of higher quality and are more likely to convert to qualified leads than any other medium. You can ask yourself: what is the value of a page one search result on Google?

Bingo! ROI can be calculated based on the value of qualified leads and closed sales generated through organic search. (Personal note: this week I closed a $20,000 account that found my organization through organic search and whom we never would have targeted with our outbound marketing efforts).

In a much less scientific method than McKinsey, I asked a question on LinkedIn Answers to see if marketers were using blogs to enhance their organic (or SEO) page rank and to gauge the impact on their business development.

Here are the highlights:

• The small direct marketing agency in Silicon Valley who achieves top organic search results in only 24 hours.
• The tech start-up in Austin who has generated substantial lead volume through their social media efforts in only a short period of time.
• A highly ranked blogger on wireless technology who resides in India.
• A web design firm in Ireland who attracts 40 unique visitors a day through blogging and organic search.
• A web design firm in India whose blogging has been so successful in improving their organic search results that the firm has canceled their paid search (PPC) program.

These small organizations have demonstrated high ROI on social media through blogging and can easily quantify the benefits.

Do you know of other organizations who have a similar perspective on generating ROI through social media such as blogging?