“This is like déjà vu all over again,” to quote Yogi Berra. Little did I know, Yogi was referring to attempts to measure the Return on Investment (ROI) of using social media. Just like the early days of the web, “The Business” wants the ROI, frequently without understanding what is being measured.
When the web was new, early web stats were frequently misinterpreted with marketing people getting excited about the number of page views rather than how people were interacting with the content. Learning your user’s intent, problems and successes, and measuring those trends (and reacting quickly) help to create more responsive companies. Navigation, search terms and especially content can be quickly updated to maximize a visitor’s experience on your site.
Our grandparents would talk to their neighbors about which stores they liked, and why. And when they were treated badly at a store – WOW. That conversation could go on forever. (Some neighbors were fun to watch when they were THAT mad). The simple power of word of mouth can help responsive companies grow, and lesser companies to disappear. Today, the community is global, connected by users sharing conversations in real-time on any number of social networks.
How fast is word of mouth? Ask Motrin, who had to cancel a full ad campaign based on a weekend of their Mommy Motrin backlash. It was so bad, at one point; the Motrin.com web site was pulled down.
The basic unit of word of mouth communication is a conversation. Today, conversations can be based in text, video or audio -or all of them. Still, sharing pertinent content in a conversation is the unit of value.
When all else fails, let’s try doing this with math. A simple ROI formula is:
ROI = (benefits realized – cost for benefits) / (cost for benefits)
That formula works mathematically. When conversations are the benefit realized in the formula, with exponential growth on a well managed social media program, this formula becomes so “industrial economy.”
Call centers (or contact centers) measure the number of calls going out and coming in to the center. The length of time is documented and is frequently a metric for their employees. Why? Because conversations of mutual interest are effective at meeting the individual’s needs with a product or solution.
What is the difference between a phone conversation and an online conversation? The phone?
Actually, it is a bit more complex. There is a level of trust that exists when someone calls into a company. When using social media, that level of trust has to be built and managed.
Many executives (but clearly not all) are effectively using the microsharing site, Twitter. They can get real time information from their customers – and their prospective customers. Zappos CEO Tony Hsieh, Ford’s Scott Monty, and PerkettPR Chief Executive Christine Perkett are all on board and recognize the need to be human and not all business.
In return, their followers have access to company executives or customer service: another reason for being active in social media.
As I’m writing, Zappos’ Hsieh “tweeted” – a comment on Twitter: “After watching 20,000 Leagues, I had nightmares of giant squids chasing me, which then turned into pack of wolves. What are your nightmares?”
The point: They realize being approachable (and human) is as key as the conversations that make them “knowledge economy” executives. Measuring the benefits of those conversations are still difficult, to say the least.
Many web analysts differ on their approach to measuring social media, but several truths are emerging. Followers (or friends) are not the same as influence, and influence is not the same as participation. When is a conversation pertinent? What is the value of each chat is still unclear. Metrics are being tested as fast as the platforms are being upgraded. Work is now being done on more complex measurements that would allow users to weigh which conversations and words are likely to be more productive for future positive gains.
Complexities are standard with measuring resultant human behavior. What is the right depth of a conversation? Are people talking about a topic, product or just finishing lines of a movie? Could the movie conversation be better for your business than that of the product? There is a lot of research to do, and no doubt, we’ll see some well-financed snake-oil solutions soon.
Remember the person in your first job who was all business, all the time? They were great at what they did, but not very social. Today, being social could mean generating a lifetime personal advocate for your products.
Motrin is a case study on why being plugged into the conversation is important. Ford had a “bad press” incident, but thanks to quick moving social media manager Scott Monty, they were able to quickly get their message to the masses instead of losing sales at a bad time. If you don’t recall hearing about the Ford incident, that’s because they were in a position to share their point of view and resolve it in less than 24 hours. In the follow-up case study, several conclusions were drawn, including “companies don’t talk, people do.”
Measuring ROI can be viewed as a measure of efficiency – a best practice.
Dr. Peter Drucker, the father of modern management may have put it best: “Efficiency is doing things right; effectiveness is doing the right things.”