ROI and Social Media
I was recently having a discussion with some colleagues, and the subject came up, that one of them had been tasked with tracking ROI for the social media efforts of the company.
My two cents would be that you shouldn’t track ROI for social media in general. (I’ll save my soapbox rant about the use of the term “social media” for another post).
Social media is tool that several different departments in an organization can use. Social Media should not be a goal or task unto itself. Still it is just one of many tools, trying to make it more than that just becomes noise.
There needs to be context of whether it is being used for Technical Support, Customer Service, Marketing/Sales, HR (or other internal purposes), etc…as well as having goals of what you wish to achieve by using Social Media tools.
Let’s say that this company wanted to measure ROI for a new online customer support initiative. I would assume that want to use social media in an effort to reduce overall support costs, perhaps by providing users a means for self-service and how they can help each other.
Metrics that could be looked at include call deflection, support case avoidance, customer satisfaction survey scores, (and many others).
The bottom line is that they wanted to use social media tools to reduce the number of Technical Support calls that they received. This is now a much clearer goal than what my colleague had actually been tasked with.
Since the company had determined that they were paying too much in support costs, they knew the cost of each call and/or that the support department received.
Since a dollar value has been assigned to each call and email received, a dollar value could be assigned to each high quality post that the user community posts and perhaps tracked to see how many times each of those posts/threads are viewed.
Measuring the changes in call volume and support tickets combined with measuring the effectiveness of the user community may give you a good gauge as to how you online efforts are reducing your costs.
Of course, the online community must be promoted, to both those who are going to post questions AND to those who may be in a position of expertise to post answers.
Harvard Business Review recently (August 2010) put out an article promoting a new statistic called The Customer Effort Score. Like NPS, the CES is based on one question (although in this case it is a 1 to 5 scale, not a 1 to 10 scale). The CES question is “How much effort did you personally have to put forth to handle your request?”
Their claim is that CES has a much higher correlation with repeat business than NPS and customer satisfaction scores. I would include that question as part of my follow up surveys.