2011
ROI for Customer Service in Social Media
I was recently asked to contribute to a piece on customer service and social media measurement for the IAB Social Media Handbook. As usual my piece went way beyond the 500 word limit so you can see the abridged version here or the full one below.
The Customer Service ‘Iceberg’
Consumers are using social media to share, complain, praise and recommend on a daily basis. The vast majority of customer service issues occur and are dealt with via “closed” channels such as the phone, email, etc. These issues are below the water line where the wider public and media can’t see them, and this is where companies currently fix their gaze and resources. This is natural and correct. Who wouldn’t put most of their resources where the majority of the activity is taking place?
However, there is a large opportunity for companies wanting to tackle the above the water line (tip of the iceberg) issues that occur in the “open” channels of social media (Twitter, message boards, blogs etc.)
Publicly helping consumers with issues not only serves the individual, but the positive viral effect to their network and beyond can be tremendous. Most companies, however, are some way behind their consumers’ behaviour. There are several intertwined reasons for this disparity:
- The plethora of social media channels where a consumer might express an opinion means companies require a tool to capture this conversation and an understanding of each of the media to enable them to converse effectively with customers.
- Even with an understanding of the breadth of media, getting people to work across departments and tying new customer interaction data in with existing legacy systems still poses significant hurdles.
- The vast majority of the interaction between the consumer and company happens in the public domain. The enforced transparency and openness of communication forces company cultures to be customer-centric rather than simply say they are. Cultural change takes time to permeate.
- Customer service as a function has long established metrics and can be input/output driven. For some reason, people are letting social media muddy the waters. Return On Investment (ROI) in this instance is actually fairly simple.
When answering consumers via social media it’s key to remember the dual audience you are playing to. The primary audience is the person with the issue that needs to be addressed. The secondary audience is the network of the person with the issue. With mainstream news consistently using social media for content, this network extends beyond their immediate friends and can be vast in size and impact.
Setting Appropriate KPI’s and Benchmarks
Customer service is not always about handling complaints. Each interaction with a customer is an opportunity for the company to engage and influence, so the objectives of the activity can be varied.
All KPI’s should ideally start with a business objective; something requiring change that intrinsically affects the company’s performance in some way. Without this it will be difficult to make the activity relevant to the wider company.
Below I have placed some typical objectives in relation to customer service in social media, common associated metrics and some ideas on possible benchmarks, these being the key to making the data meaningful within a company, especially within social media. This is not supposed to be an exhaustive list but it should provide a framework to relate your own experience to.
| Objective | Typical Metric | Possible Benchmark |
| Customer Retention | Number of complaints resolved.
Number of consumers stopped from leaving or thinking about leaving. |
Compare the customer lifetime value of those served via social media to other customer service channels – email, phone, etc. |
| Advocacy | Number of shares.
Reach of shares |
Compare shares (number, reach and %) to shares via other media.
Compare to NPS, customer referral value, etc. |
| Increased Revenue | Amount of incremental revenue created by the interaction with the consumer (i.e. upsell of other products). | Compare with the incremental revenue derived from contact via other channels. |
| Cost Reduction | Number of customers served via social media.
Time taken to resolution. Cost of resolution. |
Compare costs of resolution to other media.
Assigning a value to each peer induced resolution on an owned property to give a nominal value to the property. |
| Innovation | Number of suggestions to products, processes etc.
Number of suggestions put into operation. Money saved (better processes, products) or revenue created as a result of the suggestion. |
Compare to the number and value of innovation from other channels. |
| Brand reputation | Volume of brand mentions.
Reach / influence of brand mentions. Reach of brand mentions. |
Make direct comparison to competitor brands or products. |
When reporting on any activity it pays to remember who the report is going to and what their frame of reference is. Senior management will want to see the business effect of what you are doing, whilst the PR Manager may be more inclined to see the narrative of conversations. Jeremiah Owyang does a great job of explaining this here.
Customers increasingly prefer to rely on their own networks for advice and recommendation. Instant answers from people they trust being infinitely preferable to a telephone call to a scripted, non-empowered environment. This is a trend exacerbated by the interconnectedness that social media propagates. The key for the company is to replicate this helpful, friendly, open and empathetic approach to their customer service whilst proving its worth in hard financial terms.
Social Media Channels