practical social media measurementSometimes, the value in a business endeavor isn’t about what goes up – like revenue – but what goes DOWN, like costs. Social media can have some very clear efficiencies, most heavily on the customer service side, but also in areas like training or communications. Let’s have a look.

Cost Per Issue Resolution

In customer service arenas, most companies have a pretty distinct idea of what it costs them to attend to and resolve issues through typical channels, like a call center. To determine what it costs in both hard and soft measures to resolve a single customer service issue (in a simple fashion), you need to:

  • Determine the hard cost of hardware, telco service, and software you use
  • Include the overall cost of human resources, including salary and benefits, that are dedicated to issue resolution
  • Allocate a proper proportion of total business overhead to that department
  • Total the investment, and divide that by the average number of issues that are handled on a daily basis.

If you’re tracking this through channels like phone or email and web support, you can also track it through social media. You’ll need to have a mechanism in hand to track the issues that you address and resolve either exclusively through social channels (a stronger direct parallel to a customer service call or email), or ones that originate there and move to other channels.

If you have the resources and an established social media presence, you can start by doing A/B testing by allocating some resources to *only* handle issues through social media channels, while others continue to man traditional channels. Keep in mind that if you do that, your volume for social media issues may be lower simply because of the newness of the medium, so you’ll want to look at the costs proportional to the time spent doing issue resolution overall.

Another thought: peer-resolved issues. If you’re keeping track of the issues that are resolved via channels like peer support forums, you can easily attach an approximate dollar value to those, assuming that at least a proportion of them would have come through mainstream support channels otherwise (recognizing that some people would never try and navigate traditional channels if the forum or online support weren’t available to them).

Issue Resolution Time

Another key area to monitor is the *speed* of issue resolution, or how much time it takes from the moment an issue is captured in your workflow to the time it’s closed and archived in your CRM or other system. Time is money, after all. Most CRM or robust contact management and customer service systems can generate reports on this for you if you’re disciplined enough to route your issues through the system.

You’ll need to have *some* kind of tracking mechanism in place, at least at a high level, in order to evaluate this properly. Track your offline issue resolution time as you normally would. To add social media efforts to the mix:

  • Tag or otherwise capture issues that *originate* in social media channels, like a complaint or question arising on Twitter first, or via a blog comment.
  • Also tag or classify issues that *resolve* in social media channels, and how long they take from the initial post to delivery of an answer or resolution.
  • Track the hybrid ones too, like those that start on the forum, but require carryover resolution through phone or email.
  • Compare these three categories: traditional channel resolution time (email or phone support), resolution time for issues that start in SM but resolve via phone/email, and those that are handled via SM exclusively.

If you’re evaluating your cost per issue, or if you have an idea of your overall department spend, you can do some breakdowns about your cost per minute or hour of issue resolution. Look at your total issue handling time in a given day as a proportion of overall business. Say that, on average, 75% of your business hours are spent with active issue handling. Take 75% of the total cost of your department spend, and then break that into a cost per hour/minute mark.

Once you have that estimate (and it IS an estimate) in hand, you can apply it to the three categories you’ve broken out and look at the efficiency of issue resolution in each of those scenarios. It’s a rough figure and you can certainly calculate it with more detail, but keeping this general approach in mind can help you at least get started.

CPM/Cost Per Dollar Raised

I don’t love the CPM (cost per thousand) metric, but it’s a mainstay of advertising. The idea is breaking out the total cost of an advertising campaign against the total potential reach, and calculating how much it cost you to reach every thousand people. If you’re like me you can see a bunch of glaring holes in that (like we talked about on Monday re: potential vs. actual reach, and the fact that this gives you NO indicator of actions taken based on that reach). But it’s a language that many executives still speak, so it can be one weapon in your arsenal if you’re trying to prove the value or efficiency of outreach in a social media aspect.

In my non-profit days, we also used to look at the cost per dollar raised, or the total of our investment in something like a direct mail campaign against the total funds we raised through that effort. You can do a similar thing through social media, or track something like a cost per acquisition/lead, if you have some tracking mechanisms in place. You’ll need to:

  • Track the approximate/potential reach of a particular effort you deploy in social media, or the incremental reach of an offline campaign carried over into social media channels. (More on that here in Monday’s post).
  • Track the time and effort put into maintaining and managing that online presence from the organization’s perspective, including staff hours. Do the same for the offline components if you can, things like managing a print/design process, or executing a mailing or media campaign. These soft costs matter.
  • Account for any hard dollars spent, either for supporting work for the online effort (like development of a specific landing page), or for the offline efforts like print media that also support the online endeavor. You want an idea of how much hard cash you’re in for.

Here you can do two things. One is to look at the total potential reach for ALL elements of the campaign – offline and on – and break down the CPM or the cost per dollar raised in aggregate. Compare that to past efforts you’ve deployed without social media, and look at the difference.

You can also look at the online components exclusively, and compare the CPM/CPDR for the offline versus the online components, and look at which delivers  more proverbial bang for the buck.

Training, Idea Generation, and Employee Education

There’s absolutely no doubt that there are costs associated with training employees, from getting them on board and up to speed to continuing education on professional skills. Ask any HR professional and they’ll tell you that these costs can be significant, most especially on the soft side, or in the time and energy costs for both the trainers and the trainees.

Social media capabilities and tools can really impact this line item in several ways. Consider:

  • Building a knowledge base, like a wiki or other collaborative resource center, to avoid having to reinvent and redeploy training materials, and to spread the effort and costs of development across all of the contributors.
  • Creating a video library of employee-generated tutorials, tips, and ideas based on common training needs for new employees.
  • Building an internal social network or communication platform so that employees can share their best practices and learning on and ongoing basis.
  • Looking into attending seminars and events virtually, or curating materials, links and information from backchannel discussions, like on Twitter.
  • Hosting organized peer-sharing sessions on Skype to do remote meetings or training sessions
  • Deploying an internal UserVoice or other idea capture/voting mechanism to curate ideas for improving business processes, like a virtual suggestion box.

In order to measure and demonstrate the value of these endeavors, of course, you need to be benchmarking the costs of your training and ongoing education, including things like conferences, as they are now. And once you deploy ideas like this, you’ve got to put in place some feedback mechanisms to see how well the alternatives fare.

For example, if you deploy a UserVoice system, track the ideas that you actually elect to implement, and measure their impact on your processes and budgets over the first six months. Compare the cost savings or increased revenue or awareness you generate from those ideas against the costs for deploying and maintaining the UserVoice platform, and approximate the return.

Ask for feedback from your employees, too. If they’re using a wiki to find information they need for their job, ask them to approximate how much time they would have to spend tracking down that information through other means. Conduct informational, quick surveys of your team members to see if they’re taking advantage of these tools, and how they’re impacting their job performance. You might be able to correlate savings or efficiencies in ways you didn’t think of, like the reduced overhead costs for meeting space and travel by conducting training virtually. Or time saved by viewing a 10 minute video tutorial for a process instead of having employees burn an hour in a less efficient live session.

Wrapping Up

You’ve likely notice how much of the above – or any of the things we’ve talked about in the last few days – have to do with tracking. That’s really the essence of measurement: you have to be capturing the data before you can do anything with it.

That’s also why there is never a single, concrete process for how you measure something. There are equations – like ROI or ROE – that are fixed more or less, but how you derive the elements of that measurement (in these cases the I or the E) is dependent on your processes. L

Also, if you want to know ROI of something, you have to be tracking the “I”, or the investment. That means yes, you have to at least approximate both the hard and soft costs relative to the efforts you undertake. Time consuming? Yes. Work? Yes. But you can’t claim to me that you’re serious about measurement AND want a shortcut to it all in the same breath. It doesn’t work that way. Measurement is a discipline, and it’s going to take effort to do right.

That’s all the more reason you need to be tying your measurements back to your goals. Why would you want to throw money and time at measuring something that doesn’t tell you a thing about whether or not you’re making progress toward the objectives you’ve set?

Last in the series on Monday, we’ll talk about evaluating community engagement and what I call active interest, or demonstrated engagement behaviors online.  Would love to hear what you’re measuring, how you’re attributing it to your goals, and what I might have missed in here.

See you soon?