Measuring the Return on Relationships | Beth’s Blog

Measuring the Return on Relationships

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Note from Beth: A few weeks ago,  I suggested that nonprofits stop using the phrase “ROI” or questions like “What’s the Return?” and ask “What’s the Change?”   I had a quick chat with Claire about this idea and invited her write a guest post to celebrate the launch of her new book, Twitter for Good – which is filled with great insights and practical advice about making Twitter power your nonprofit’s mission.

Starting at 12:00 AM (midnight) on Tuesday, September 6, 2011 Twitter for Good: Change the World, One Tweet at A Time will be available as a FREE  electronic download for 24 hours only.

Measuring the Return on Relationships by Claire Diaz Ortiz (nee Williams)

Last week, I started a discussion on Social Edge entitled, Fundraising, It’s Not Always About the Money (http://www.socialedge.org/discussions/marketing-communication/fundraising-on-twitter). I explained that while researching my new book, Twitter for Good (http://ht.ly/4RirJ), I took a long, hard look at fundraising on social media and came to a new, startling conclusion: it’s not about the money. As I asserted, the real ROI (return on investment) of fundraising on new media is the relationships.

Although I opened the discussion, I didn’t take it far enough, and too many of you came away with the same, burning question:  How can we measure the ROI of relationships?

Measuring the ROI of a marketing campaign can be time-consuming, but it’s always straightforward. Measuring the ROI of a fundraising campaign is equally simple. We spent $1,200 to send out 500 pieces of mail in our direct mail campaign and we netted $4,500 in donations. Done. We spent $50,000 to host our annual fundraiser and we received $200,000 in donations. Understood.

But relationships? How can you possibly measure the intangible?

What was the value of my first meeting with the lovely Beth Kanter a few years ago at the old Twitter offices, where we chatted for far too long about the highs and lows of adoption (and, a little bit about nonprofits and social media)?

Who knows. But I’ve written some guest posts, so I guess she doesn’t hate me.

What is the value of the strong connection I’ve built with Amanda Rose (http://www.twitter.com/amanda) from Twestival (almost exclusively virtual save the frantic annual “we’re in the same place let’s have lunch!” phone call) over the years?

Don’t ask me. But she gave me a book endorsement.

What is the value of Amy Neumann’s (http://www.twitter.com/charityideas) ongoing, selfless offers to provide support on anything non-profit related on Twitter?

Got me. As far as I know she’s never made a donation to the non-profit I started (http://www.hoperuns.org), but I’m sure she’s told some folks about it.

When trying to promote our cause to the world, we yearn for relationships. And to some extent, we all have relationships like this, relationships that we are cultivating or have cultivated or hope to cultivate. We know we need them, we know we should spend time with them, but we’re not entirely clear on how much, or why, especially when it comes to fundraising.

Or are we?

I’m going to go out on a limb and say that we can quantify these relationships (to some extent). Yes, we can break down the real ROI of fundraising on social media.

And here’s how.

If you know me, you know I’m fan of uber simple acronyms and word games that help people remember and implement what I’m teaching. Heck I did create the pathetically obvious T.W.E.E.T model (Target, Write, Engage, Excel, Track) (http://clairediazortiz.com/how-to-use-twitter/) for excelling on Twitter, didn’t I?

And now I’m going to do it again.

How to Measure the ROI of Fundraising on Social Media:

Fundraising on social media is about relationships, and we can measure the ROI of those relationships by breaking down the return on investment into three parts.

Return on Investment = Reach, Outcome, Influence

  • Reach: A relationship you develop becomes more important the larger the reach is. If Susie P has 9 friends on Facebook, and Susie Q has 900, Susie P is probably your better bet. But remember, reach isn’t always about numbers. See Influence to better understand.
  • Outcome: Any relationship that yields tangible benefits is working.  Did a three-hour dinner in London with an international aid worker bring you one quality application (the aid worker’s Facebook friend, no less) for an outstanding position at your non-profit you’ve been trying to fill? Did you have a blast at the dinner to boot? Even better.
  • Influence: Is a person popular, or do they actually have sway in your given area of interest? In one example I share in Twitter for Good, Scott Stratten’s @unmarketing (http://twitter.com/unmarketing) Twitter following (then about 40K) clicked more times on the bit.ly link he sent out of him singing than Ashton Kutcher’s million followers did. Why? Perhaps Ashton’s followers are more interested in watching Ashton sing. Likewise, if @ClaireD (http://twitter.com/claired) were to tweet about sports, no one would bat an eyelash. Targeted reach is what you’re after.

Specific case studies back up these three points. Born2Fly (http://born2fly.org/) is an organization dedicated to banishing sex trafficking, and Diana Scimone of Born2Fly’s excellent guest post (http://www.bethkanter.org/twitterthon/) here on Beth’s blog (which was reproduced in Twitter for Good (http://ht.ly/4RirJ) tells the story of learning from a fundraising campaign that didn’t meet expectations. Her take-away? Build relationships with bloggers to better promote the next fundraiser. REACH.

Fireside International (http://www.firesidepictures.com/wordpress/), a non-profit media company in Haiti, needed English language learning materials for a new school they were building. They reach out to Rosetta Stone, and scored $18,000 worth of materials. Query a hundred individuals or companies, and one hit may just come through. OUTCOME.

Global Citizen Year (http://www.globalcitizenyear.org), another organization featured in my book, is another. The key support they received from Nick Kristof convinced them of the power of Twitter to build relationships in order to garner support. INFLUENCE.

Measuring these specific points will bring you an ROI with all the shiny numbers you’ve been hoping for.

Ultimately, the success of fundraising on social media highlights what we have always known: to fundraise effectively (in the virtual or the brick-and-mortar world), you need relationships.  Be smart about building them, cultivating them, and maximizing them.

Measure them as well. It doesn’t make you mean, it makes you smart.

Claire Diaz Ortiz (nee Williams) leads social innovation at Twitter and wrote Twitter for Good: Change the World One Tweet at a Time (http://ht.ly/4RirJ)

Want more from Claire Diaz Ortiz?

Follow @ClaireD (www.twitter.com/claired), read her blog at ClaireDiazOrtiz.com, or download the first chapter of Twitter for Good for free here (http://clairediazortiz.com/free-chapter-twitter-for-good/).

 

11 Responses

  1. Ifdy Perez says:

    This was an excellent article; thanks Claire and Beth for providing it. Are there any influence/relationship tracking templates out there that you know of? Or do you recommend we just open up a Word doc and take frequent notes?

  2. This adds weight to efforts I’m making to understand the network I’ve been connecting for over 35 years. In many ways network building is like community organizing.It’s tough to measure impact. The ROI ideas are valuable.

    Now we need to find ways to connect with researchers, interns and funders who want to stimulate this type of analysis and use it to teach others to do their own network building, while enhancing our own efforts.

    I encourage you to browse the groups at http://tutormentorconnection.ning.com/groups to see my own efforts.

  3. I’m a big fan of data and agree completely that nonprofits should at least make the attempt at quantifying the return on their investment in social media. What I would add however, is that looking at the opportunity cost of any given action is also important. Sure, there may be a return on investment, but could you have had a bigger return doing something else? Efficiency is so important for nonprofits given their limited resources.

    I think most nonprofits have to be very careful on how much time they spend on social media. But what better way to know for sure then to measure your results?

  4. [...] Measuring the Return on Relationships Note from Beth: A few weeks ago,  I suggested that nonprofits stop using the phrase ROI or questions like What's the Return? and ask What's the Change? Source: http://www.bethkanter.org [...]

  5. Anne Cauley says:

    Great perspective, thank you! I would add that I think your model of ROI (reach, outcome, influence) could be applied to non-profits who are NOT charities (and who don’t fund raise. (i.e. those organizations want change to happen but aren’t a registered charity… take many of the sustainable organizations…) Any suggestions for this area? Thanks.

  6. [...] Measuring the Return on Relationships Note from Beth: A few weeks ago,  I suggested that nonprofits stop using the phrase “ROI” or questions like “What’s the Return?” and ask “What’s the Change? Source: http://www.bethkanter.org [...]

  7. Rob Peters says:

    Beth:

    I like your article. I agree that Return on Relationships is not the correct term for measuring. The way forward is with adoption of open industry standards for the capture and measurement of Relationship Capital (RC) online.

    People, products, and organizations are not trusted today. You need to earn RC through kept-commitments and positive perceptions. RC credited to your RC account when you keep a commitment and/or have receive a positive perception from another.

    So you, your product, and organization’s Relationship Capital (RC) will be a tangible measure of trustworthiness!

    -Rob

  8. Ellen Weber says:

    Great discussion on a key topic and I love your notion of targeted reach – as well as the compelling question, “Is a person popular, or do they actually have sway in your given area of interest?.”

    Would you agree that stress is often a main cause of relationship blocks and it’s growing as toxins at work increase. See http://bit.ly/qHe4F5

  9. [...] Note from Beth: A few weeks ago, I suggested that nonprofits stop using the phrase “ROI” or questions like “What’s the Return?” and ask “What’s the Change?  [...]

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