The Value of a Single Social Recommendation

January 2, 2013 Comments
The Value of a Single Social Recommendation
Measuring the Value of Social Media Users

Image under Creative Commons: Attribution by Flickr user Www.CourtneyCarmody.com/

Figuring out the real, dollars and cents value of social media is still a daunting challenge for most businesses.  There are ROI calculators that deduct the cost of electronic self-service from the cost of sales.  There are whitepapers and blog posts and whispered promises by sales people at the end of their fiscal quarter.  But every once in a while you stumble across an real life example that provides the best and most vivid argument for a real, bottom-line value of social media interaction  per user.

Devart is a maker of database management and development tools.  While working on a social business intelligence project for a client I was investigating management consoles for MySQL.  Through the course of evaluation, we selected Devart’s dbForge Studio for MySQL and that is when I noticed their “High Five” program.  As you can see in the screen grab below, the company has put a very definite, measurable monetary value on social media recommendations of their tool from their user community.

The values range from discounts to free licenses to $100 Amazon gift card!  Moreover, the Devart “High Five” program demonstrates a level of maturity that is rare.  The easiest social interactions – a recommendation on twitter, facebook or linkedIn yield discounts.  But even these are tiered to reflect the “amount” of engagement required by the end user.

the value Of Social Engagement

Tweets, the easiest to perform, are rewarded with a 10% discount.  Facebook posts get 15% .  LinkedIn – the biggest B2B social network listed – gets the user a full 25% off a license cost.  But Devart goes further.  Put their corporate product badge on your blog and get 50% off , write a short review, get the product for free.  Write a longer review, get the product for free and $50 for Amazon.  Write 1000 words with links and get the free license and $100 bucks at Amazon.

What makes this a great example of how to calculate the value of a single social recommendation is that it rewards the user with a tangible “gift” with the same immediacy that the company is rewarded with a positive social media recommendation.  It is not a mail-in-rebate.  It’s not a coupon.  It is a recognition that earned media, word-of-mouth recommendation and social channels have a positive impact on business.

A Devart license for the dbForge Studio runs only $200 bucks.  So a free license plus $100 Amazon gift card is a net loss for the company.  But they are able to calculate that one long review by a happy end user will drive at least 2 new transactions and thereby be a net revenue driver.  It also allows the user to choose the level of engagement they desire – from easy to more involved – and be recognized appropriately.

It is a great example of how at least one company has calculated the value of a single social recommendation.

*This is not a recommendation or endorsement for any Devart product.  Billy Cripe, BoomThink and SocialBusinessNews.com are not affiliated with Devart.

  • http://clayfranklin.com/ Clay Franklin

    This is really great news. Most companies have no idea how much social media customer service, recommendations, or even interactions are worth. Most would run a campaign and look at the exact cost vs. the exact immediate return on investment of the exact campaign.
    Here we have a progressive company that has clearly identified a value for a recommendation and rewards customers appropriately.
    Personally I think this is awesome and sets an example for how other companies might value social engagement as well as reward customers and potential customers appropriately.
    @ClayFranklin

    • http://www.bloomthink.com/category/blog Billy Cripe

      I’ve reached out to their head of internet marketing (who I found via LinkedIn) and asked if he’d be interested in commenting on how they came up with their cost/value structure. Thanks for the comment and kind words!

  • http://twitter.com/ianvisits IanVisits

    “Write 1000 words with links and get the free license and $100 bucks at Amazon.”

    In essence, that’s a paid blog post wrapped up in a different name, and while the method of garnering “paid blog posts” is an interesting one, I wonder if they require disclosure that it is such a thing, or if users can cloak their motivation?

    • http://www.bloomthink.com/category/blog Billy Cripe

      Good point Ian. Yep, it should be disclosed that the blogger is getting spiffed for the review.

  • http://www.adigaskell.org/blog Adi

    It would be interesting to get some insight into how they derived those figures. Assuming their figures are sound though this is a really nice idea.