Enterprises Struggle To Measure Social Media ROI - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Social
News
6/2/2011
11:20 AM
Connect Directly
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Enterprises Struggle To Measure Social Media ROI

Only 40% of companies take on the challenge of trying to measure social media performance, according to a Hypatia Research report.

14 Leading Social CRM Applications
Slideshow: 14 Leading Social CRM Applications
(click image for larger view and for slideshow)
Even as more businesses invest in social media outreach, most have not figured out how to calculate a return on that investment.

According to a Hypatia Research report, "Benchmarking Social Community Platform Investments & ROI," only 40% of companies measure social media performance on a quarterly or annual basis, while almost 13% or the organizations surveyed do not measure ROI from social media at all, and another 18% said they do so only on an ad hoc basis. (Hypatia didn't specify what response the other 29% gave.)

Of the performance measures in use, annual customer satisfaction was mentioned by 15.4% of the participants in the study, followed by customer retention (14.3%), brand reach and frequency metrics (9.4%), number or quality of leads generated (9.2%), Net Promoter Score (8.4%), and customer service center cost reductions (8.4%). The authors noted there is room for debate on whether the Net Promoter score belongs on this list, since it is a survey-based metric of how likely customers are to recommend a company or its products, measuring probabilities rather than actual performance.

"While it's virtually impossible to calculate the ROI of a large corporate social media program with either precision or accuracy, given that social media is by its nature a multi-channel environment, it is possible to get ROI estimates on specific points of the initiative. For example, if the public is asked to register to use the site or to receive coupons, one could keep track of how many of those leads became customers," the authors wrote.

As an example of one company that has done a good job of quantifying the value of social media, Hypatia cites iRobot, which in its consumer arm makes robotic vacuum cleaners and other automated appliances. The company actively tracks mentions such as customer-generated YouTube videos, and it calculates the value of a customer compliment (or the cost of a complaint) at a fraction of the $200 average purchase price of an iRobot product. The calculation is based on the number of people who viewed the comment, about 25% of whom iRobot estimates are actively considering a purchase.

The report quotes Maryellen Abreu, director of global customer care at iRobot, as noting that the company has an educated customer base that researches its purchases "so, really, a thousand hits on a negative posting could all be potential customers."

Attend Enterprise 2.0 Boston to see the latest social business tools and technologies. Register with code CPBJEB03 and save $100 off conference passes or for a free expo pass. It happens June 20-23. Find out more.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
How to Create a Successful AI Program
Jessica Davis, Senior Editor, Enterprise Apps,  10/14/2020
News
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
Slideshows
Flash Poll