The ROI of social media – are we looking in the wrong place?
What was refreshing during the 90+minute call, was that the Frost & Sullivan analysts asked some really interesting questions beyond the normal “so how are you different from Radian 6”?
One question that stuck out was “what percentage of companies are using social media for product feedback and improvement?”.
My response was probably that it was in single digit figures.
And here’s the thing. Social media is “the best piece of research you never commissioned”.
I use this line at conferences when speaking about social business and it remains my most tweeted quote of all time. The social signals you get from social media are amazing – if used properly.
The problem is that for many companies, they have been scared in the initial stages when they turn on a Twitter feed and set up a Facebook page and people realise they can complain on social media! What happens here is a company pays the “Twitter Tax” because all of the process that are fundamentally broken are exposed for all to see on social media.
What I see happen next is instead of actually looking at the great (sometime very raw) product and process feedback, they just throw more community managers at the problem (and in the process add more headcount and increase costs), meaning that the C-suite get very nervous about social and see the costs rising.
In a board meeting, someone then says “what is the ROI of our social media expenditure?”. This can be self-defeating, as the social team may be simply fire-fighting the issues caused by years of broken processes.
What is the alternative?
I think we may be looking in the wrong place for an ROI value on social media if we just focus on customer service and marketing campaigns and chasing likes and followers.
Instead, if we channel the feedback gleaned from people talking about our brand on social media into our product development and research teams, then perhaps companies will build better products, more tied to what their customers actually want.
At the moment though, I don’t even think that those charged with providing the social media listening function in organisations even know that the product teams would like this feedback, or how to present it in a meaningful way rather than lots of “your product really sucks”.
Years ago in Australia when I worked for number 2 telco Optus, I was in the product development team, and later lead a strategic review of the whole product creation process at the carrier in conjunction with Bain consulting. If I had access to the rich feedback available now via social, we would have built much better products.
When working with John Lewis when they were a client of mine in 2010, my regular interaction was with the small customer research team of 3. Back then, they were making good use of the social signals being provided, mixing them with their traditional research to make better informed business decisions.
The John Lewis team told me at the time that for them, social had become an “early warning tool” as what they saw on social played out in their traditional research weeks later. We also worked out that the social research we provided them actually meant that they had a research team of 6 – social listening technology doing the work of 3 researchers.
The bottom line is – instead of looking for an ROI on social media through simple customer service and campaign lead activity, feed the intelligence from social into your product teams, and measure how more profitable your business is as result of fixing broken processes, and making products that your customers want to buy.
That’s the real social ROI – of a social business, not just from social media.