If you’re not measuring the financial impact of your social media initiatives, then why are you doing them in the first place?
One of the people I respect the most in the biz, Chris Berry from Syncapse once remarked to me that the state of social media today is where the web was in the mid-90s; everybody wants to be in on it, but they’re not quite sure what “it” is. Like many other technologies that emerge these days, a whole crop of solutions arise that aim to help you measure things and try to put a nice number on something. Presumably because having a number attached to a particular activity allows you to then increase that number and justify a pay raise or a change in title. OK, makes sense so far.
But what gets me riled up is that measuring for measurement’s sake is just as useless as having no measurement at all. This is the case that I believe we find ourselves in today. Before I continue, a digression.
I was in a management accounting class during my MBA program and the discussion was about the airline industry. My professor was talking about how great Ryanair was, how they were making so much money etc. etc. I put up my hand and said, “Yeah but it’s not fair to compare Ryanair to British Airways. BA flys all over the world and services many more locations. Ryanair is just a dinky little local shop.” My professor quickly replied, “What’s the point of business?” And as I answered, I quickly saw the flaw in my argument. My answer was “To make money.”
I’ll say it again because we sometimes forget this: the point of business is to make money. That Twitter re-tweet campaign you’re thinking of running? If it doesn’t make more money for your firm/division/group, then you wasted your time. That contest you ran on your Facebook fan page? If you didn’t make more money, you wasted your time.
Yeah, you’re increasing “engagement” and creating a “community” with your fans and customers blah blah blah. Bullshit. You’re trying to, as economists say, extract rents from them. Simple as that. The aforementioned Chris Berry published a paper title “Value of a Fan” where he demonstrated how one could attach a dollar figure to each fan of their Facebook page. Now the final number he arrives at is besides the point. In fact, in the paper, Chris even mentions that this isn’t really “the” value of a fan. There is no such thing as one true value because no two products or groups of fans are the same. What was the takeaway from this paper was that social media strategists have to start putting on their accountant hats and attaching dollar signs to each and every one of their social media activities.
I came across an article criticizing Canada’s telecom companies for their lack of social media presence. Oh company X didn’t have a link to their Twitter feed, which is just an alias for their RSS feed anyway, which is useless. I don’t know anybody is so passionate about their cell phone carrier that they subscribe to the carrier’s RSS feed. You know what, maybe Rogers doesn’t have to “engage” with their customers through Facebook just for the sake of it. If they decided to use Twitter as an alternative product support channel, OK, that’s an idea ONLY if it provides a better experience for customers at the same or lower cost than phone or email support. While of course it’s the sexy thing (well as sexy as internet gets) to have a Twitter feed, YouTube channel and SecondLife store front (OK, I made that last one up), it only makes sense if it makes monetary sense.
If you’re not increasing revenue or decreasing costs because of your social media presence, why are you doing it in the first place? It’s as though the logic that is applied to all other marketing areas is suddenly forgotten when it comes to social media.