Reading; "Increasing the ROI of Social Media Marketing." MIT Sloan Management Review.

Intro

This reading, "Increasing the ROI of Social Media Marketing" by V. Kumar and Rohan Mirchandani, addresses a classic headache for marketers: how to prove that social media actually makes money. Instead of just "listening" to the internet, the authors propose a data-driven way to find and use brand ambassadors to drive real sales.

For your Lecture 6 exam, focus on the 7-Step Framework, the three special metrics, and the Hokey Pokey case study.

The 7-Step Framework for Social Media Success

The authors suggest companies move from a "one-way" message to a "two-way" dialogue by following these steps:

Step	Action	Simple Explanation
1	Monitor	Listen to what people are already saying about your brand.
2	Identify	Find the "influencers" in the crowd.
3	Profile	Find common traits among these influencers (e.g., are they active? talkative?).
4	Locate	Find influencers specifically interested in your product category.
5	Recruit	Invite them to join your specific campaign.
6	Incentivize	Give them a reason to spread the word (discounts, fame, or freebies).
7	Reap	Measure the results in terms of brand growth and actual money.

The Three "Magic" Metrics

The core of this paper is how they use data to measure a person's value. You’ll likely need to know the difference between these three for the exam:

• Customer Influence Effect (CIE): This measures a user’s influence on others. It’s not just about how many followers they have, but how much their followers actually respond, retweet, or share their posts.

• Stickiness Index (SI): This measures relevance. An influencer might be famous, but do they talk about your product? SI looks at how much of their online chatter is about your category (like ice cream vs. tech).

• Customer Influence Value (CIV): This is the monetary value. It combines what the influencer buys themselves (Customer Lifetime Value) with the profit from the sales they caused by influencing others

Case Study: Hokey Pokey Ice Cream

The authors tested this on a real company—a premium ice cream chain in India called Hokey Pokey.

The Strategy:

1. Phase 1: "Creations on the Wall" – Customers made their own ice cream recipes in-store, named them, and posted them on a physical wall.

2. Phase 2: "Share Your Brownies" – Influencers were encouraged to tweet and post about their creations to earn "Brownie Points" (redeemable for prizes).

The Results: By finding the "right" people to spread the "right" message, Hokey Pokey achieved massive gains despite a tiny budget:

• +40% Sales revenue growth rate.

• +83% Social media ROI.

• +49% Brand awareness.

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Key Takeaway for the Exam

The biggest lesson here is that social media accountability is possible. You don't have to guess if your tweets are working; by using metrics like CIE and CIV, you can link "abstract" likes and comments directly to financial performance.