No matter how many times we all say it, we can’t help ourselves in applying old measurement models to measure new ways of doing business. It’s human nature. It makes us feel comfortable. And it justifies our investments in platforms. The only problem is that it is often wrong, particularly in new areas, such as social media.
Think about your company. I will bet you have a lot of data and research. You have dashboards. But you don’t receive “actionable insights” every day or week that can improve your business. You’re stuck looking at old data about stuff that happened weeks or months ago to justify whether you should continue a project or activity. The old way is to look at data and then contemplate what is next, rather than the new way, which can lead to immediate action, maybe even during your meeting. You are not satisfied with the old way of doing business. You know it in your gut.
What’s really required is a more intense focus on “Return on Information”, which is directly related to “Return on Investment”. Here is a way to look at why this is important.
Social media and the online experience are not the only areas that are immensely quantitative. Yes, in social media we can see views, visitors, downloads, posts, comments, registrations and much more. But, in baseball, my favorite sport, we can see hits, runs, strikeouts, walks, ERA and an endless number of ratios and percentages. There are many other examples, of course, but they are just random data points until they fall into the hands of a leader.
The key is how people use data to get a return on information. If you are a baseball player, you study a pitcher and catcher so you know when to steal second base. If you are a pitcher, you’ve studied a hitter’s habits so you know where they are weak and how to get them out.
It is essentially an amazing capability to take statistics, create a great “cumulative gut feel” and then utilize it to be successful, often at a time when the data is not right next to you.
Leaders in social media are like the best baseball players. They have every stat at their disposal, they know the habits of their marketplace and they are ready to meet the needs of their customers due to their fluency in what matters and their gut feel on what is needed. The rest of the world is just getting up to the plate and swinging at whatever pitch is thrown to them. Guess who wins.
Here are four examples of how you can get a better return on information and avoid common traps today.
#1 – Share of Conversation Matters, Not Blog Traffic – if you measure blog traffic, then you are in the wrong place. Your best customers are subscribing to your blog in some manner, so they will never actually visit your site. So what matters is to measure share of voice on key topics that you are addressing and to understand your share of the conversation. Once you do, you know which influencers you need to keep in contact with. You’re getting a return on information that is valuable.
#2 – Customers Appreciate Relevant Next Steps — think of Twitter. Which matters more – that you have a lot of followers or that the followers you have get real value from your content and conversations? When you think about it, it’s obvious. What matters is that we can take a relevant action, if we want to, as a result of receiving your content. Twitter has these examples, ranging from OneKingsLane to Zappos to Dell to Kogi BBQ. Imagine if we took this one step further and really helped society, for example, by making it easier for people with a form of cancer to find the right clinical trial or for homeowners to get the tips they need to improve their carbon footprint and did it in a way that didn’t require you to understand how to navigate a maze of websites. If your conversion rate goes up due to highly targeted and useful information, I would say that is valuable…and cost-effective…and customer-driven….anything not to like about it?
#3 – Community Alerts Are Needed, Databases are Just Big Closets — so many people like to build databases and “capture” people’s info in them and then brag about how many people are in it. Hello out there….does anyone know where this has worked really well? If you do, please share. There seem to be more databases than people sometimes, but they sure aren’t what customers want. I know I don’t brag about how many databases I’m in to my friends. Customers want us to know their preferences, so they can get information or alerts they want when they want them that are actionable. So, if I want to know when a 2 terabyte Western Digital portable hard drive is available at <$300, for goodness sake, don’t tell me about every 500 gigabyte or 1 terabyte drive you have ever created. Just find me when you are ready and tell me and I will buy it that day. I like my Western Digital 500 gigabyte drive, by the way, but do need to upgrade. Return on Information, when done well, will enable us to eliminate costly ways to communicate today. Imagine junking your email lists someday…..
#4 – Integrate Ideas to Build New Products & Services, Don’t Just Collect Them — if you receive ideas from your customers, the key is to “gather, integrate and report”, ala Starbucks or Dell. If ideas impact your future products and services because your engineers and designers are learning together with customers, you are receiving a tremendous return on information. If you simply gather ideas and call this a victory, you have actually made it worse, since you’re only pretending to care. The value of partnering with your customers goes way beyond any short-term economic value. It’s the way of the future.
There are many ways to look at Return on Information. The key is that you know how to utilize your statistics to figure out actionable next steps every day to improve your value to your customers.
Customers are hoping you do this, I’m quite sure.
All the best, Bob Pearson