Social Media Analytics: What is the Value of a Hug?
You know it’s going to be an interesting day when the CEO (that would be Terence) who also happens to be your esteemed co-blogger asks: “How much is a hug really worth?” This question was brought about by a recent article on how banks are using social media analytics tools to gain insights about their products and services. Here’s a direct quote from the article:
“Though she gets asked a lot about the ROI of social media, SunTrust’s Buckridee acknowledges that it’s hard to measure the ROI on goodwill generated through positive social media conversations. My question is, how do you measure the ROI of a hug? … Because that’s what we’re doing with the Twitter team. We’re putting a face to the brand — giving them a human voice and talking to them. We’re focused on building loyalty. … We’re starting to turn that thorny dialogue into happy customer tweets.”
Okay. Well, first of all, as most marketers will tell you, “hugs” have value. Actually, what most marketers will tell you is this: “You better be able to measure the value of that hug so that you can justify how much you are willing to spend to get it and show just how that ‘spend’ results in sales.” Because if you don’t, you may find yourself standing in front of a CEO (say from a fortune 500 company) and when you tell him that you grew Facebook friends by 20%, have the CEO reply, “I don’t care how many friends we have! I need more revenue!” True story (and believe me, every marketer has at least one of these).
Now, before I talk about measuring value, let’s look at how banks today are experimenting with social media:
- First Tennessee is using social media tools to monitor customer reactions to updates in their checking accounts product offering as well as “word of mouth” (fondly known in marketing circles as WOM).
- ING Direct Canada leveraged social networks to crowdsource the development of its first checking account product.
- Citi, SunTrust, First Tennessee and ING Direct are listening to conversations and engaging—trying to understand how they are perceived in terms of customer service, what products their customers love or hate, as well as how they measure up against their competitors.
How are they measuring success? Well, they are looking at volume (translation: noise or buzz) and sentiment (translation: do they love/like/hate us?) as well as trying to determine the level of engagement (translation: do they like what we’re doing, are they telling others about us, are they talking to us directly?). What metrics are they looking at specifically? Number of Facebook followers and likes, number of Twitter followers, tweets, and retweets, number of Diggs, etc.
So, is it accurate to say that a hug’s value cannot be measured? Well, there’s measurement and then there’s measurement. Singularly, a hug may not be worth very much but let’s say the hug is amplified (retweeted many times, blogged about, commented on, etc). Then, the hug is worth more. And what if, during the time of the “hug amplification” you could also track a spike in other marketing activities and best of all worlds, a spike in sales activities (in banks it would most likely be a spike in new accounts)? Well, then we’re talking value. (Yes, you could say that this just might be a plug for our “coming soon” Social Media Analytics offering and you would be correct.)
Whether you are in B2C or B2B marketing, tracking value (ROI) is always important. In fact, in a recent IBM survey on the state of marketing in 2011, more than 60% of the respondents listed “measurement, analysis, and learning” and turning “data into action” as top requirements. And although 53% of marketers surveyed “use” social media, their focus now is on “finding the value that social channels can yield with more analytical insights and actions.”
So is there “real value” in social media marketing? You bet. Consider the following:
- Dell used Twitter to generate more than $6.5 million in sales.
- The Humane Society raised $650,000 in donations for a simple contest on Flickr, returning $13,000 for every dollar spent on the contest.
- Sodexo, a food service company, used Twitter as a part of its job recruitment program. At the end of their six month pilot, they canceled their Monster.com ad buy ($350,000) and replaced it with Twitter which cost only $50,000 in time and resources, saving Sodexo $300,000 a year.
The ROI is there but these companies were not successful simply because they said “Hey, let’s see if we can use Twitter to make some noise.” No, they were successful because they had a strategy, made a plan, and collected the metrics they needed to prove value.
At PatternBuilders, we talk a lot about how analytics can be used to increase sales, reduce operational efficiencies, and allow you to make fact-based decisions. This holds true not only for social media, but for any other measurable activity as well. And while number of visitors, number of unique visitors, number of hits, number of tweets, number of retweets, number of followers, number of likes, add-your-own-favorite-number-here are good to track, there’s much more to ROI than simple numbers.
The value of any hug is highly personalized—to the company, to the department (marketing, sales, customer service), to the expectation (awareness, communication, reputation), and to the expected result (increased sales, supporting a mission, improving a brand’s perception). Ultimately, the value of a hug depends on the data you collect and the analysis you bring to bear to measure “success.” That is exactly how much a hug is worth.