ZD Net recently looked at the return on investment when it comes to social media. They believe that social media will return your investment if you put the proper amount of time into it. They also point out that if you have the proper amount of social media, you can avoid social media disasters. ZD Net cites the most recent social media disaster for United Airlines, United Breaks Guitars.
Do you believe it’s worth investing in social media? As we’ve seen with many companies, United not the first, many PR disasters come about due to social media. Should companies have measures in place to control these events?
In the December edition of CPG Matters, they address the issue of companies investing in coupons, and then being unable to fully understand and analyze what motivates customers to use them.
Bill Bittner, president of BWH Consulting of Mahwah, New Jersey, states “Measuring coupon effect is not done in a vacuum. It’s difficult to sort out the single effect of a coupon. There are so many factors that affect performance, the general economy being the big one today, I don’t know how you isolate.”
To conduct this specific research, APT advocates that tests and controls be set up for retailer-CPG colalboration, by dividing a chain’s loyalty cardholders into many test groups to receive different offers, based on thier prior spending patterns. The controls are samples held out from each of these group to not receive a particular offer.
Then, the researchers must look at both the tests groups and the controls. Find out more about these tests here.
I found a very interesting post at CustomersThink by Mark Hunter. He discusses the situation when customers call and complain about your price increase, and threaten to switch to your #1 competitor. He points out that this only ends up happening about 10% of the time, however, if you’re prepared during the initial conversation with the customer, you’ll be set. It’s important that sales representatives do their homework, and can talk through the process with the customer. Yes, the cost of switching is incredibly high, but be able to inform the customer as to how long it’d take for them to get the anticipated savings back, and how long it would be before a return on investment is to be seen. Be prepared to give the right answers to your customers, and it’ll result in customer retention.
Measuring the impact of social media is a common topic throughout corporations that are trying to find out the importance of this trend, and the effects it’s having on their business. A recent blog post by Aaron Uhrmacher at Mashable took a look at how he best believes it can be done. He starts off by pointing out that every organization is going to measure their social media success differently because each company has different objectives for their ventures. He pointed out two ways to measure the media.
First, one can use qualitative measurement. In this step, you have to determine what you want to measure. Is it reputations or conversations or something else? Uhrmacher gave these examples:
- Are we currently part of conversations about our product/industry? - How are we currently talked about versus our competitors?
Then to measure success, we ask whether we were able to: - Build better relationships with our key audiences? - Participate in conversations where we hadn’t previously had a voice? - Move from a running monologue to a meaningful dialogue with customers?
You can also use quantative measurement. This uses tools to help track the traffic to your site and the activity that’s going on when users view your webpage. Sources for this could be: Aide RSS, Google Analytics, and Xinu.
However, the most important part of measuring your ROI from social media is to have in mind from the beginning what you want your media to do. It is vital that you choose what you want to measure so you can determine if you’re reaching those objectives.