How to measure the ROI of social listeningby
The measurement of return on investment (ROI) has been a constant challenge for those working in the social media world. While the bean counters want to be able to accurately calculate the pounds-and-pence return on other forms of investment, various idiosyncrasies of social media have conspired to complicate matters.
As with other social disciplines, measuring social listening ROI certainly has its fair share of challenges.
Luke Moore, EMEA sales director at Crimson Hexagon, notes: “The main obstacle right now is how people perceive social media within organisations. A lot of companies are still counting retweets and likes. This type of insight won’t interest senior management as they won’t relate to that type of language. Providing management with these metrics will only put them off.
“Social media listening ROI needs to be measurable in relation to key business activities such as: informing the best time for a product launch, measuring intent to purchase, identifying brand perception by consumers, etc.”
But even taking it in context of a business goal, measurement can still be problematic. For instance, Jenny Sussin, research director at Gartner, demonstrates the difficulties that can confront organisations that want to measure the ROI of using social listening tools to monitor the impact of marketing campaigns.
“There are a lot of data challenges,” she notes. “Often there will be a digital strategy team that exists within marketing organisations that takes responsibility for social. Now, while they have access to all of the data for projects that they work on - social, mobile and life, the Internet of Things and so on - they don't have access to data for web comms, and web analytics data, etc. But in order to determine whether or not a campaign has been successful, you need to have an idea of whether somebody made a purchase, or registered for something.
“The digital strategy team doesn’t have access to that data. So the silos between departments make determining business value harder. Getting the data that they need to have in order to determine whether or not they've been successful is difficult.”
Similarly, its use in other disciplines is also blighted by measurement obstacles.
“Social listening is usually carried out at a high-level, and as part of a long-term investment in your brand and communities,” says Ulrik Bo Larsen, CEO of Falcon Social. “For example, if your goal is to tackle a social media issue before it develops into a crisis by listening out for negative brand mentions, then that investment can only be assessed when you have successfully averted a crisis. Furthermore, if you wish to carry out pro-active social customer service through listening, perhaps your objectives hinge around customer retention, or overall online sentiment, which can only be measured as part of a bigger picture.”
Nonetheless, despite the innate difficulties involved, measurement is important – after all, you can’t manage what you can’t measure. Like any other channel, social media requires investment and therefore needs to be accounted for when it comes to looking at returns. So with this in mind, how can organisations get a grip of the returns that their social listening efforts are delivering?
“Don’t try to create new metrics – look at what your company already measures,” advises Sussin. “One of the most important things your company measures is money, so measure whether you’re making money or saving money.”
Examples of cost reduction activities could include:
- Eliminating the number of calls to agents by identifying service issues and then facilitating the resolution of customer questions. How can this be calculated? Kevin Bottoms, global vice president, sales & business development at TELUS International, recommends: “Look for year-over-year declines in the volume of other channels. It’s important to survey customers who resolved their issue on social channels to determine how many would have contacted the service department via voice, chat or email if their issue wasn’t resolved.”
- Prevent returns through topical and immediate help.
- Gathering customer feedback. Analysing social conversations to listen to customer opinions can help your organisation better focus its marketing campaigns and product development. And while it isn’t advised you use social listening in isolation, as it should always be supported by other feedback mechanisms, it can reduce the scale of – and therefore expenditure on – other Voice of the Customer programmes, such as surveys.
- Crisis management. Brands can use social listening to avoid crisis situations from occurring or to prevent a threat from escalating if one should happen. While difficult to quantify, brands can compare stats such as sales and sentiment in the wake of previous events, to evaluate the impact that swift crisis identification and resolution has had.
- Optimising campaigns. Social listening enables organisations to monitor the impact that a campaign is having or has had. Social listening tools allow marketers to estimate the impact that a piece of content has had through the likes of measuring word of mouth through sharability information and examining brand awareness via growth in community size. By learning about what was and wasn’t well received, marketers can optimise future campaigns, streamline operations and save money.
Examples of revenue generation activities include:
- Generating leads. According to research from social sales expert Jim Keenan suggests that over three-quarters of sales people using social media to sell, outperform those that don’t use social.
- Converting sales through direct transactions with sales agents. This type of interaction occurs when an agent identifies a customer asking questions on a social venue about buying a product, and subsequently directly intervenes. Bottoms advises: “Subsequent revenue generation can be measured by matching the agent interaction with the customer’s purchase.”
- Converting sales through indirect transactions with a sales agent. These types of transactions happen as a result of the social community witnessing the sales person’s intervention and discussion. When an agent helps one customer to convert a sale many other potential customers see that transaction and a percentage of those will act on that information. “These transactions are more difficult to capture but can be measured with the help of post-sales surveys,” notes Bottoms.
- Improving brand equity through proactive customer service shows customers that a company is willing to invest in their satisfaction. When a company is proactive in responding to complaints and negative comments, customers notice and brand equity increases. People are more likely to buy from a brand they trust. “This type of gain is difficult to quantify but can be measured through overall increases in sales and improved customer satisfaction,” suggests Bottoms.
- Influencer marketing. Social data can be used to build a list of infuencers, capitalising on the likes of Kred scores, and retweet data to identify online people that may otherwise be hard to identify. The ROI of the subsequent influencer marketing efforts can then be measured through traditional metrics such as impressions, engagements and conversions.
- Managing brand reputation. Monitoring brand sentiment is one of the main applications of social listening tools. Cultivating a positive online presence can dramatically improve the perception of a brand. This type of gain can be difficult to quantify but could be measured through overall increases in sales and improved customer satisfaction.
Larsen concludes: “Measuring the costs vs. the return for a social listening project can be tricky, but it is possible. The data you acquire through listening can be a huge enabler for other areas of your business, and it’s usually at a very tactical level that you’ll be able to understand the return gained on the cost of your listening efforts.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.