Not sure what social ROI is or whether it should be hived off as a separate entity ie. ROI of customer service vs ROI of social media customer servie. But I am trying to understand why working out the ROI is important? Whether you work it out or not, your customers will still do what they do. Does knowing your ROI, which is often based on assumptions anyway, actually make your company provide a better service to your customers?

Kathy Herrmann Replied on Nov. 4, 2011

Hi Guy,

Not really sure how to answer your question.

Does determining an ROI change your customers? Well no.

Can it help you perform better service to your customers? Possibly.

Certainly performing an ROI analysis can tell you the scale of a social program your company can afford.

And if the ROI is high enough, a company's exec team will be much more likely to allow a customer service team to broaden their the scope of their social customer service programs. And that can lead to providing better (and affordable) customer service and increasing customer satisfaction.

But here's the question I have for you?

Why would you want to be ignorant of your company's social performance?

At the end of the day, it's real simple. Social business is still business. And the business of business is increasing shareholder value.

Kathy Herrmann Replied on Nov. 4, 2011

Guy,

You might find this roundtable discussion helpful.

http://www.focus.com/roundtables/simplifying-social-business-blasting-through...

Dr. Natalie and I blast through social ROI myths. And it goes into more detail about why determining ROI is important.

Kathy Herrmann

Consultant - Business Strategy & Design

Posted on Nov. 2, 2011

There's no single good answer for this. The social ROI is a direct derivative of the social strategy so how many possible gains that you accrue will depend on the nature of the strategy and tactics.

And more complex programs (that is those that span more diverse social channels as well as departments), will have more complex results.

Part of the way that Dr. Natalie and I try to simplify the ROI determination, though, is to break it out into specific buckets. For example, for customer service, we look at:

1. Increase Agent Deflection (Direct and Indirect).
2. Increased Agent Productivity (Lowered Avg Handling Time, Increased First Call Resolution, Enhanced Knowledge Base Generation).

Breaking out the ROI this way, allows us to clearly show the data used, and assumptions, for each category of gains. It makes discussion around the variables much easier to undertake with clients.