How do you measure the effect of a conversation?
Until now, and still continuing in most contact centers, Customer Service has been measured on the efficiency of its performance: number of calls per hour, times it takes to answer a question, time to answer an email, etc.
Organizations that moved to managing experiences migrated their metrics to effectiveness metrics: customer satisfaction, customer loyalty, and an effective delivery of the proper answer on time, not just the first time.
How do you measure the success of Social Media events in CRM? Is it about efficiency (answering as many twitter interaction as possible, for example), or about effectiveness (making sure the client gets that they need)?
The answer lies in the purpose of implementing Social Media in the organization.
Organizations that did things right actually have a strategic reason for adopting it. They also know that it should be tied to a corporate strategy with its own metrics.
Social Media will affect those corporate metrics, and that effect is what you must measure.
How do you measure that effect? By tracking metrics over time, detailing what changes were made, and the change in results.
A customer is unlikely to stop being a customer based on a single interaction. Customer satisfaction, loyalty, and commitment build over a lifetime of interactions between the customer and the organization (see this post for details). This change in these lifetime of interactions is what justifies the addition of social media to CRM – not the result of any one specific interaction.
Social Media is unlikely to return value or generate an ROI on just one channel or one interaction.
Plan your social media strategy across all the social channels, tie the results to a long-term analysis and make sure you tie it back to your corporate strategy.
Thoughts?
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The basics of any business relationship is you are going to be do it with people you know, like and trust. With out those fundamentals then it fails. I think you have to be grounded with a Social Marketing strategy because people need to know it is a marathon and not a sprint. Plus, the best relationships are built over a long period of time.
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Esteban, good points as always.
We agree that individual social media touchpoints will not shift customer opinion to a large extent. There are, of course, rare exceptions when a particularly bad experience could turn the customer off enough to stop working with a company, but we will ignore that for the sake of this discussion.
In order to to gain up-front executive buy-in for social media we must be able to define two things:
– Expected ROI over time.
– Key metrics to be monitored to ensure that you are achieving the promised ROI.
I feel that both are practical in our new world of Social CRM, however. As we create these new capabilities I envision building in solutions like:
– Tracking the number of touchpoints with a customer, broken down by social, email, phone, in person.
– Auditing customer behavior before and after said touch points.
If these interactions are successful we will be able to measure success by:
– Customer purchase history over time (Revenue).
– Number of support issues raised (Cost).
We are a long way from a real formula that demonstrates ROI, but it is not out of the question. Most importantly, we have the ability to define a real ROI, with real metrics to back it. Let’s do this right.
John Moore
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@JohnMoore You got it right!! it is a mutli-channel strategy of which the social channel is a part.. There is no such thing as Social Media ROI. ROI or profit depends on so many factors (that are all linked) that it is impossible to calculate it to one interaction or even one channel (well explained by Esteban)
Even if you implement Social Media / Social CRM and you see loyalty increase (by increased re-purchase etc) it will be impossible to relate it to that one channel. New products, new processes, new vendors, new offers, even new customers and new employees all add into the total bucket of ROI.
And: this doesn’t mean you should not embark upon this social media road. You probably should. Just make sure it fits into a well thought-through strategy of building awesome 😉 customer experiences. Because we do know those can make a difference.
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Maybe an idea to track back (please follow my thoughts per bullet.. and shoot):
– customer experiences contribute to loyalty when they add value to customers in a sense that the experience makes things easier, costs less customer effort and/or provides delight.. (..anymore?)
– if, or when, we can tie increased “ease of use” or decreased customer (perceived) “effort” – with regard to a specific customer experience – to a specific channel (social media in this case)
– and we can than also tie customers – that “travelled” through that specific experience and through the social media channel – to higher repurchasing behaviour or increased product/service penetration –
– compared to those customers who did not have that experience through that specific channel..
– could we than have tracked it back to the source?
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Yes, yes, yes. That is the point that I am trying to make,albeit not as clearly as you have.
By segmenting audiences and utilizing basic A/B testing techniques you can begin to measure the real ROI. While it is likely impractical to perform true A/B testing across your entire customer base you can look at sample sets of customers to determine the value of any of your communication channels, social, or otherwise.
John
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And it is probably best to perform testing across several segmentations:
– Main segment: user vs non-user
– Sub-segmentation for each of the main segments across spend, geography, product etc..
Maybe we can open an add on our blogs:
wanted: – forward thinking client to perform social media impact on loyalty/ROI testing –
Then we also have our own ROI 😉
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