Instead Of ROI, How About Asking What Not Getting Involved In Social Media Is Costing You?
December 6, 2008 – 10:16 pm | by Daryl TayI had to do a marketing case study or “show and tell” in class awhile ago, what else would I use, but social media?
Two bloggers, Pat Law and Steven Hodson from Singapore and Canada, had negative experiences with Challenger (a Singaporean Best Buy alternative) and Tim Hortons (the Canadian alternative for Starbucks) respectively. With Pat, there was a huge mess with getting delivery on time, horrendous customer service and problems all round. With Steven, a Tim Hortons cashier short changed his wife of $20, and despite the fact that it was obvious from the CCTV that there was an error, they were told there was nothing Tim Hortons could do.
Both cases resulted in pretty strong words from the bloggers and the commenters against the companies involved, but also pretty strong statistics. Pat shared with me her blog stats, and there were over 1,000 views in five days, with the average time spent clocking at six and a half minutes.
Think about that. 1,000 people with 6.5 minutes of negative exposure to your brand. You can buy all the ads you want and you probably won’t even get 6.5 minutes of positive brand exposure in a month.
Why is this a problem?
Any Monkey Can Blog
It’s a problem for companies because it’s just too simple for anyone to set up a blog and blog about a negative experience with your company. Why would I bother picking up the phone calling customer service when odds are I’ll get crappy customer service anyway? It’s just easier to “stick it to the man” online.
The Mistake
Companies are mistakenly not monitoring their brands online, thinking “no one” cares. Well, one thousand people at 6.5minutes each suggest otherwise. I think when we’re talking about customer lifetime value and potentially large amounts of revenue being lost (you can rest assured I’m not buying a television from Challenger although I’m in the market for one), someone should at least be attempting to make things right.
So What Then?
I'm Not Listening
Companies need to focus on good customer service and relationships to differentiate themselves. Especially for companies like Challenger and Tim Hortons who are selling fairly homogenous products, it’s just too easy for a consumer to go to another electronics store or somewhere else for coffee. Particularly in this recession economy, excellent customer service both in and outside the store may just be the differentiating factor you need. If you’re going to hire those service staff anyway, you might as well make sure they’re doing a good job of it.
The bottom line is this. Stop asking what positive ROI social media is going to bring you, because it isn’t the most important question. If it manages to bring in some sales/conversions, great. But at the very least, it can be used to negate the effect of such negative word of mouth. From one blog post, Challenger easily lost a $3k purchase from me, and who knows who else? How many people are going to forego that product from your company because of something they read, and your company did not respond to set things right?
How much is not getting involved in the social media space costing you?
[Image credits: Any monkey can blog | I'm not listening]
Tags: bad customer service, best buy, blankanvas, canadian blogger, challenger, crappy customer service, excellent customer service, homogeneous products, marketing case study, pat law, show and tell, singapore blogger, social media, steven hodson, stick it to the man, tim hortons, winextra
6 Responses to “Instead Of ROI, How About Asking What Not Getting Involved In Social Media Is Costing You?”
By The Lovable Rogue on Dec 7, 2008 | Reply
Daryl,
An interesting piece. It’s a shame that organisations continue to neglect the online conversation, favouring instead more measureable ROI’s that fail to protect brand perceptions online. Unfortunately, I think that ROI will continue to be one of the factors influencing social media take up within more traditional organisations. In my opinion, it is precisely this kind of engagement that detracts from the organisatio’s social media presence. The product of such an engagement will invariably appear manufactured, and will as a result detract from the user experience.
TLR
By Zack Brandit on Dec 8, 2008 | Reply
Business Intelligence (BI) software providers have been quite successful those last years because they succeeded in creating customized scorecards and dashboards for their customers.
On the other hand, there are specialized companies that provide social media monitoring solutions.
Both are focusing on measuring impacts and ROI.
Maybe, a “transitional” solution would be to define key indicators that will help companies measure the impact of participation.
We could identify elements that will add a positive value to the brand and potential increase in sales (based on stats) and on the other hands define criteria that can show negative impact (or simulate the loss due to non-participation).
The technology already exists, all we need is to find the right way to measure it. Companies which are successful with their blog and/or other channels could help identify the indicators.
This might help non-believers understand the value of involvement by using real measurables.
Actually, when speaking about brand perception, my company might help in a very near future.
By Daryl Tay on Dec 8, 2008 | Reply
@The Lovable Rogue: Thanks for the comment! For those same companies, arguably even “measurable” ROI like reach doesn’t really translate into proper ROI like influence or impact, which puzzles me why they keep sticking to it anyway. Does it matter if $1 gets 10,000 people on TV when 80% of them are in the washroom, TiVo-ing it or just not there during the ads anyway?
It’s interesting to see, especially with the recession, how companies begin to learn how to deal with this. And I certainly feel those who begin to embrace social media will emerge stronger after the fact.
By Jasmine Lim on Dec 28, 2008 | Reply
Hi Daryl, love this post. Top Management buy-in to social media and the ultimate ROI question will remain one of the biggest challenges for marketers.
I would like to share some more relevant articles that could help marketers get buy-in.
David M Scott poses another good question to new media detractors: “Are you thrilled with the company’s current marketing & PR programs?” (http://www.webinknow.com/2008/10/the-one-questio.html)
Plus his video response to answering the ultimate ROI question (http://www.webinknow.com/2008/11/answering-the-ultimate-question-how-do-i-convince-my-boss-of-the-roi-of-new-marketing.html)
Another interesting article on 8 tips for selling social marketing to CFOs (http://decker.typepad.com/welcome/2008/11/8-tips-for-selling-social-marketing-to-cfos.html), even though I suspect it’s tough backing up with success stories for point no. 1.