You are What You Measure
At the OMS one-day conference I heard a very dangerous question: So my boss keeps asking me where the ROI is with these social media outlets, am I right to keep telling him to ignore the revenue?
So my boss keeps asking me where the ROI is with these social media outlets, am I right to keep telling him to ignore the revenue?
Even more disconcerting than the question, was the speaker’s answer who suggested that it’s right to not look directly to revenue and return on investment and think in terms of link-backs, number of followers on Facebook and Twitter, etc.
It’s one thing to suggest, the ROI and revenue to be gained in social media is an unknown, but unless you’re in the business of just making friends you need to rethink you business goals, in buzz speak, your key performance indicators. But to argue that “meh, it’s not really a prerequisite” is an extremely dangerous practice for any business.
The issue may simply have been we don’t know how to track the efficacy of social media (because that is a very real problem) or how to forecast it’s effect. But that just means you need to find other ways to analyze your campaigns.
As a business if you’re entering the world of Twitter, the general argument may be our revenue goal isn’t in terms of generating new demand, but improving customer service through positive interactions you could look at reduction in return rates, reduction in call center phone volume, etc.
With user generated content, like reviews, you have a better chance of looking at direct conversion rate improvements as volume of reviews increases. But there again, metrics like return volume (better reviews, usually offer buying advice on whether a shirt runs large or small, whether a particular cell phone requires a 2nd battery, etc), customer call volume, and even purchasing decisions (a bevy of negative reviews may suggest it’s time to stop carrying a product).
But the day you stop measuring revenue in some facet or another, and tying your initiatives back to revenue (new demand, lowered returns, cost-savings) you’ve forfeited the notion that you’re in business. If you’re measuring friends, followers, link-backs exclusively you’re essentially just socializing.