Determining the Social Media Payoff

With social media, collaboration is the key to success. Customers don’t care if the company representative works in marketing, accounts payable, public relations, or customer care; they only want the person to understand who they are and solve their problem. For social strategies to take root, barriers between departments need to fall and different groups must work in a cooperative and cohesive manner. For social to succeed, it is all about serving the customer. Such thinking is hard to nurture in organizations where historically performance was measured strictly in dollars and cents and departments were often pitted against one another.

The process also requires that companies make significant investments in these tools. At General Motors, 500 employees engage with customers across 400 social media channels, from Twitter and Facebook to specialist forums for motoring enthusiasts. In the U.S. alone, GM operates 20 different Facebook pages. Corporate investments require an ROI. In select instances, the payback can be easily translated.

Here is a short video clip about how GM is leveraging social tools:

Unfortunately, most paybacks are unclear. The line from improved customer service to the quarterly profit-and-loss statement is more difficult to draw than traditional manufacturing-based ROI models. Businesses are not measuring how many widgets are sold or the cost of a plastic case. They are building relationships with customers. Rather than the cost of goods sold or the number of sales, businesses are trying to measure the quality of interactions and track customer emotions, new areas that are hard to quantify, and volatile. Progress is being made, though. For example, Oracle is using semantic based logic, or artificial intelligence to monitor how customers feel about their interactions. The system can differentiate between sad, which means disappointment in how the company responded, and frustrated, which may lead to anger. If a tool relies on Boolean logic, it misses the context of what’s being said; it’s simply matching keywords.

Where is the payoff?

It seems clear that happy consumers will buy from a company repeatedly, but when they will buy is often a mystery; the payback may not come for months or even years, and linking the eventual purchase back to a couple of positive social interactions seems impossible.

Social platforms are changing the ways companies interact with customers. To switch from reactive to proactive, businesses must not only revamp themselves but change how they measure success and failure. Those willing to change have seen successes, and as others follow, we’ll likely see a social media gold rush.

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