There are two ways to measure social media ROI: (1) direct profit that results when people act on an offer you publicize on a social channel (a promo code, a coupon, or the like); and (2) the contribution to profit and value that results from people engaging on social channels to chat, research, converse, and generally form a positive impression that inclines them to buy, recommend, follow, and stay loyal and satisfied.
We help clients focus on that second, far more lucrative metric, also known as Customer Lifetime Value, or CLV. Ever heard of that? It’s a measure of the profit you can expect to generate from a customer as long as they remain a customer. It includes initial sales, renewals, upgrades, referrals, and other sometimes non-monetary indicators of buyer satisfaction.
How do you measure contribution to CLV? The slide deck linked here offers a glimpse into some of our client work that answers the question. If focuses less on the technology that underpins the effort, although we do provide a resource list, but more on the types of things you can measure and the ways you can capture the upstream inputs to do that measurement so you can determine what works and pivot to do more of that. We hope you find it helpful.
How do you measure social media ROI? Love to hear your stories. Comment below, or really open up the chat by sharing on your favorite social channel!
Thanks to a rich online experience, buyers indeed have greater purchase influence these days, but where does the true power reside? It’s shared, really.
Marketers have made much of this “empowered customer” phenomenon. Online, you can research and get close to a buying decision – right down to vendor, product, price and feature selection – before the seller even becomes aware of your existence.
Salesreps, just a scant decade ago, guided purchases with probing inquiries about interest, budget and other decision factors. About 2/3 of buying and selling decisions today are salesrep-facilitated, but a full 1/3 of buying and selling is of the buyer-driven, “salesrep-lite” variety. We can expect to see considerable rebalancing from time to time, thanks to (a) recent advances in mobile digital profiling ; (b) a coming wave of marketing technology mergers, acquisitions and partnerships, and (c) a currently proposed standard for profile data interchange currently before the Worldwide Web Consortium – the W3C.
Profiling – It Really Is All About You
Today on the internet, so the updated joke goes, if you’re a dog everyone knows it – as well as your breed, age, gender and preferred kibble brand. Today, your online behavior – actions such as clicking “Like” buttons on Facebook pages you visit, for instance – helps marketers (interpretive algorithms, really) make inferences about your identity including gender, age, political and social tendencies, then use that info to tailor your online experience so you see ads and content that cater to your digitally harvested “buyer persona”. That preferences profile of you is continually enriched and refreshed based on your online and mobile behavior patterns.
Stated differently, “free” isn’t really “free”. It never really was. When you surf the web, you reveal (“lend”) bits of your identity to savvy marketers who trace your online behavior patterns to compile that rich profile of you that can be then used to tailor your online experience in such a way that your satisfaction from the online experience is improved and, of course, increases the likelihood you will buy from them.
Recently, a consortium of retail and insurance companies including Adobe, Google and BestBuy have proposed to the World Wide Web Consortium (W3C) a set of standards for commerce data interchange that would make it easier for us all to do business online. Merchants, health care providers, finance firms, and consumers all stand to gain from this.
Who Goes There?
As long as you consent and your privacy is protected, all is well. Increasingly we have come to trust certain online identity repositories curated by the likes of Google Wallet, Amazon, LinkedIn, Twitter etc. In the broader commerce world, however, small and midsized organizations have not built, bought or hired the depth of technical ability to make sense of all that data, let alone apply it to their business or curate it responsibly. The above-mentioned W3C Web data acquisition standard could really democratize things.
Leveling the commerce field
Larger organizations may seem more capable, but that isn’t always the case; they typically are running legacy apps (archaic programming and hardware) whose code is tough to maintain, let alone modify to take advantage of the proposed newer standards. Fortunately, companies like AppDirect, Apigee and Nexaweb Technologies – experts at modernizing all those legacy apps for large financial, trading, shipping and consumer facing companies – are hard at work on the challenge. (Disclosure: I own a smidgin of stock in Nexaweb).
We buyers can tell who is “with it” and who isn’t, based on whether the ads that get served to us, or our repeat visits to favorite sites, are tailored based on our browsing behavior or our location. For example, I recently visited a jewelry website, after which my visits to other websites, including Google Search, became peppered with jewelry, wedding and dating ads. With the recent accelerating consolidation among solution providers in the marketing automation, sales CRM, email marketing and web analytics space, those web commerce architecture elements are becoming knit more tightly. Expect the next few years to bring an expansion of already existing analytics, buyer profiling and content tailoring solutions, more broadly affordable to midmarket and smaller enterprises with whom you regularly do business.
Do the benefits outweigh the risks?
If you consider the ability to track user behavior narrowly through the buyer / seller lens, Consider the implications. Will buyers’ online preference profiles tailor each netizen’s digital experience so greatly that the reinforcing effect of a profile-driven, tailored on-the-fly web experience merely helps bring relevant online information conveniently into sharper focus, to your benefit? Or, could the online experience become so digitally mutated by profile-driven content tailoring that its “echo chamber” effect distorts your online experience in ways that prevent you from viewing alternative information to consider broader options and render well-informed decisions? Will the rich have a different web experience than the not-so-rich, based on their profiles, harvested data, and access to speed? In other words, how much is too much?
If you broaden your focus beyond commerce and consider the ability to track population behavior to detect and help resolve anything from traffic congestion (like, say, Waze) to disease spread, then the benefits become more clear.
Shut it down if you want to
Do you know how to “shut down” your behavioral profile and surf the Web anonymously to obtain a more random, unfiltered experience? It’s possible, you know, without a lot of geekery. Tools abound, such as Google’s InPrivate Browsing feature and other tools that let you assume a random IP address (Google that boldface phrase to see some options) when surfing. Your mobile experience can also be made private if you know how to turn off geo-location, but you’re still registered on a network when your phone is on.
This delicate balance of individual privacy, public disclosure, information gathering and sharing between big firms, security agencies and other firms is now being played out in the world headlines. The NSA and other entities regularly approach Google, Facebook and Microsoft, as well as telecommunications companies, to obtain customer activity information for the purposes of national security and law enforcement.
Our Best Behavior
If we marketers hew to the goal of providing a more useful, satisfying experience to you while keeping your privacy sacrosanct, that’s all to the good. As tools become more broadly available and powerful to enable deep customer profiling and tailored online experience, you may come to expect a more gratifying relationship with your favorite brands. After all, consumers already have heightened expectations. They don’t want every interaction with the same business to feel like the first date.
How do you feel about the coming boom in digital profiling and data exchange? Comments welcome here.
A recent IBM survey found that over half of business leaders today realize they don’t have access to the insights they need to do their jobs. They just aren’t harnessing the data.
Today, surrounded by sensors, apps and systems, we have ability to generate and store data cheaply like never before. Ironically, as the data piles up, the ranks of organizations able to process it is declining, and the talent shortage for managing it is increasing.
The ability to harness and leverage data is now a big competitive advantage. This doesn’t mean that experience, judgment and intuition are less relevant; on the contrary, you need those attributes to evaluate data.
You do not need a million dollar budget or a Ph.D.in Computer Science to be a Big Data Voodoo Daddy – one who knows where the data is, can harness it, and mines it daily to delight customers and boost revenue. Devise a basic plan or framework, select a few tools, apply them to your most important data, and you’re started. Just be sure you’re improving on existing data and processes; you can’t automate a vacuum.
Ask: Where is your data? What does it look like? It generally has 3 characteristics:
Volume – nobody is scared anymore by the prefix “giga” as in gigabytes (GB). The average hard drive stores hundreds of GB. So, the average U.S. household has a place for it. Of course, there is always the cloud computing and storage option, as long as you don’t mind internet and power outages bringing your business to its knees.
Variety – here it gets a little hairy. Data is everywhere, but not organized. Some of it lies dormant in locked spreadsheets; some of it is in silos, like Point of Sale receipt reports, accounting ledgers, and customer records. Some of it is “unstructured” i.e. not contained in nice neat rows and columns, but rather in text records and notes. You need tools to organize and standardize data so it will fit nicely into your main database. This is tedious and messy, but worth doing. Fortunately, most major software providers understand this too and have enabled their products to interoperate with one another.
Velocity – some data is historic; some is collected periodically and batched; some data is streaming live (example: your location in a GPS app, your favorite mobile shopping app). Does live streaming data matter to you? It should if your customers are mobile, and these days who isn’t?
You need 3 things to harness the volume, variety and velocity of your data:
a database / storage place (love that cloud storage option!)
software to help you access, manage, report, cleanse, update, analyze and act on it;
helper apps to get help standardize data from multiple “feeds” so they can enter your main storage place.
While some of this may sound geeky, be assured that the tooling and resources are becoming more usable. For some large organizations, however, expert talent and technology remain the best option.
One Big challenge Remains
The single biggest challenge of data these days is its quality. In that huge haystack of data, there are some gems and usually a bunch of stale (call it historical) data. Stale and historical data are okay, and even valuable for trend spotting and progress reporting. You can easily take steps to update it via customer surveys, sorting, web / email response forms, etc. Most people and related data sources will happily keep their info in your database current if it helps you stay relevant to one another. Just be sure to keep that process easy, and clearly spell out the benefits. Consider sharing your data discoveries with them, too – at least to the extent that you do not infringe on people’s privacy.
Best Uses for Big Data
According to McKinsey Global Institute, big data has five broad opportunity areas: increased transparency and use, improved performance management, better decisions, greater precision in meeting customer demand, and more targeted R&D. If you are in Sales and Marketing management, web and social media analytics, financial reporting, call center reporting, fraud and security detection, energy usage, safety management, risk and opportunity management, inventory, assets, logistics, agriculture or health care, you have the opportunity to excel and lead in your marketplace by leveraging available data.
You must use these powers only to do good. Concerns about privacy, access, security, intellectual property rights and liability must be factored into our thinking, policies and practice concerning the use of data.
Got data challenges? Drop a comment. I’ve listed a few helpful resources below.
Additional Resources (see sidebar on this site for tool ideas)
Pluris Intro (Pluris Marketing) – OCDP (omni-channel dynamic profiling) so big orgs can treat people as individuals
Technology solutions tend to exaggerate things. If you have a good process, implementing a technology solution will improve it. If you have a bad process, likewise that effect will be magnified.
In the course of helping our clients with selecting and implementing sales and marketing automation solutions, our initial discovery talks often lead us to jointly conclude that it’s not yet time, and we instead agree to implement a readiness plan. Over time, our project load has become about evenly split between readiness projects and implementation projects. By first assessing readiness, we tend to find you’ll make better decisions and enjoy improved outcomes.
Assess your readiness: 3 questions
Got a minute? take areadiness quiz. Alternatively, here are three questions you can ask yourself to determine your readiness:
Are basic processes currently in place?
If yes, are the processes working?
Do we have the resources to close any process “gaps”?
If the answer to any of these is no, then you may be a candidate for a readiness project. You certainly wouldn’t want to automate a bad process, and automation is definitely not a cure for a “vacuum” – a lack of process. Above all, don’t buy from anyone who tries to convince you that you’ll figure out the process once you’ve implemented their marketing automation solution. We have seen that course of action result in disenchantment, poor outcomes and underused, expensive tooling. The moral: Implement when ready – not before.
Undecided? Try these two tools
Here are just 2 tools we use to help assess readiness: a Sales & Marketing CRM Maturity Scale, and a “3C” (Content, Conversation, Conversion) process flow map.
Click the on-screen images to enlarge, download etc.
Sales & Marketing CRM Capability Maturity Model
Here we have adapted Carnegie Mellon University‘s venerable Capability Maturity Model for Software Engineering organizations, modifying it to suit Sales and Marketing organizations.
This tool is helpful in stimulating discussion about your organization’s current and desired state of capability, so you can establish goals and plan for success. When interpreting results, you should consider that:
self-raters tend to over-rate;
Most raters gravitate toward the middle of a range – in this case, “Level III – Defined”. Upshot: most organizations readily admit there is room for improvement.
Download your free copy of this 1-page guide at our Resources page. Enjoy!
3C Conversion Model
This chart is useful for helping stakeholders examine how they influence the Content, Community and Commerce aspects of customer acquisition. It focuses on phased data gathering to support the buyer’s journey. For any part of the organization, the questions are similar:
How should we be involved?
Do our processes and our content create a strong CTA (Call to Action) that engages and satisfies strong prospects so they will return, value our resources and assess the fit for our solutions?
Do we elicit and gather data of a sufficient depth and breadth to help us fulfill visitor expectations, fulfill their needs, and inform our strategy?
Help yourself to these tools, and let us know if you find them useful or need advice. You can either “Leave a Reply” below, or ask privately using the “Got a question” button, or take the quick Readiness Quiz.