Mike Krigsman and Dion Hinchcliffe At DreamForce On Organizational Change Management and Social Media: Part 1 What’s The ROI Of Social Media? That’s What EVERYONE WANTS TO KNOW!

Is Calculating the ROI Of Social Media a Deflection Technique When Leaders Aren’t Ready for Social Interaction Change? With Sean O’Driscoll

8 comments

Posted by admin on Jan 3, 2010 in Customer Experience, Customer Service, Featured, Leadership, Organizational Change Management, ROI of Social Media, Social CRM | 8 comments

While we were at WOMMA.org conference, Sean shared some of his ideas on measuring social media. Is the insistence of calculating the ROI really just executives not wanting to venture where they must go?

Here’s is a candid interview with Sean O’Driscoll of Ant’s Eye View:

Learn. Share. Grow!

Thanks for tuning in! Dr. Natalie

www.twitter.com/drnatalie

You can learn more about Sean at http://www.antseyeview.com/blog/

and follow him on twitter at http://twitter.com/seanodmvpt

More about Sean:

Prior to co-founding Ant’s Eye View, Sean was a 15 year veteran at Microsoft Corporation. In his most recent capacity as General Manager, Community Support Services, Sean was responsible for developing social media and community-based support models and leading the global Microsoft MVP program. The MVP program was designed to award and recognize amazing individuals in technical communities around the globe who share a passion for technology and the spirit of community.

Sean is the co-chair of the influencer council for the Word of Mouth Marketing Association, and graduated from Pacific University (1992) in Forest Grove, Oregon, with degrees in business administration and philosophy.

He now lives just outside Seattle, Washington, with his wife Kari, and two daughters, Erin and Lauren.

8 Responses to “Is Calculating the ROI Of Social Media a Deflection Technique When Leaders Aren’t Ready for Social Interaction Change? With Sean O’Driscoll”

Kathy Herrmann says:
January 13, 2010 at 9:57 am

Hi Nat,

Good interview with Sean. Interesting thoughts…a number of which I have mixed reactions to, especially around the topic of social business valuation.

I agree some execs are using the demand for social media valuation as a tactic to stall change. However, plenty of others are just making good business sense in wanting to make the right decision for their company.

Sean started the interview by saying we don’t determine the ROI of phones anymore because they’re SOP in business. True. However, smart businesses certainly determine the economic value of phone *systems* before opening their checkbooks. They evaluate the right system for them in terms on feature functionality but also budgetary considerations.

Swinging around to social media…

It’s easy to jump into a single or several social channels. That siloeing is already going on in companies all over the business environment. However, it’s much harder to build an integrated strategy of social business >> one that incorporates culture, personnel management, process (re)engineering, and tech infrastructure.

At it’s most simplistic, the economic valuation process is about crunching numbers. On a deeper level, though, valuation feeds directly into strategy definition.

Execs who look upon valuation as part of the necessary foundation in the strategic definition process are not dragging their feet. They’re looking at a holistic impact of social media — or really social business — on their companies. And I can’t fault them for that. It’s good business.

The exec challenge will be to keep moving forward with whatever initiatives they undertake to humanize their business — and that’s what social business is all about.
olivier blanchard says:
January 13, 2010 at 5:48 pm

ROI measurement (of any business activity) is valid and necessary.

If an executive “ambushes” you with a bogus ROI excuse, then perhaps, yes. But the majority of the time, executives simply want to be able to tie their investment in a Social Media program to financial outcomes. It’s basic Business management: Taking care of the P&L ensures that precious funding isn’t being squandered on BS.

Are many executives risk-averse? You bet. If they invest resources in something that doesn’t work, people lose their jobs. Asking questions about ROI = executives being responsible. Moreover, the ROI question is a litmus test.

When a CEO asks you about ROI, they are probably testing YOU.

If you understand its importance, its mechanics in relation to Social Media and the way to properly set up a measurement methodology for the client, you’ll probably get your funding.

If you don’t, you simply don’t belong in that conversation.

Social Interaction change and ROI can and should live in the same universe. No offense, but consultants who can’t map the relationship between the two and clearly articulate it to a CEO probably need to rethink their line of work.

For more info, try http://www.smroi.net

Cheers,

Olivier Blanchard
@thebrandbuilder
Chuck Van Court says:
January 13, 2010 at 6:28 pm

Greetings Natalie:

Without a doubt, asking for ROI on anything new can and is used as a deflection tactic, but the argument presented here and by others that question the need for ROI on social media expenditures at all is equally lame

The bottom line is that any prudent business decision must be formulated around clear strategies with articulated and measurable outcomes to justify resource allocation relative to other potential initiatives. This does not mean that an absolute ROI will or even can be computed.

I also have a question: If and when Twitter sustains traction to the same volumes of the other support channels, beyond being used as a “megaphone” by a consumer in an attempt to force a company’s hand, do you really think anyone would prefer using a non-threaded channel limited by 140 bytes over alternative support options? If the primary reason for usage of the Twitter channel for support is to force a company’s hand or to circumvent longer queues, would it not be more prudent for a company to only support Twitter as an entry point into other support channels capable to really deliver a positive customer experience rather than ever opening the proverbial barn door and supporting Twitter as a support channel unto itself?

Chuck Van Court
CEO and Fouder
FuzeDigital
Esteban Contreras says:
January 13, 2010 at 7:32 pm

Fantastic interview. The topic of ROI is a controversial one, and the fact is that there must be an ROI for everything for a company (a company must generate profits after all), but it’s true that often the ROI question is only presented as a means of resistance. Very interesting.
DrNatalie says:
January 22, 2010 at 11:43 am

Hi everyone!
Thank you for reading, listening to the interview, but most for your great comments and thoughts! Really appreciate your point of views!
DrNatalie says:
January 22, 2010 at 11:57 am

Hi Chuck,
Appreciate your comments. I think that Sean has a really good point. I’ve implemented new things as an employee, as a consultant and an analyst. What I have noticed is that when an organization knows that an initiative is really key to their success, the conversation is more about what, by when, how and who…

When there is hesitation… and not all of that hesitation is about resistance… it could be pausing to make sure the decisoin makes sense, that there will be a return on the investment.

But that is different than” JUST DO IT and DO IT NOW.

Companies that Sean and I have worked with, we see then with more of the later attitude… know that there is an ROI, the ROI is obvious to them and its not a question of “If” or “why” — its what, by when, how and who…

And I am an ROI gal… so I am not saying just implement at your whim… but we are distinguishing companies that realize social customer and employee interactions are here and here to stay and there is going backwards.

I think it would be like, as Sean says… would we question that employees need a desk, a phone, a computer to do their jobs? No, because we KNOW they do.

And I think what Sean and I are saying is that social media/enterprise 2.0 is as needed as a desk, a phone, a computer..

I am happy to agree to disagree on any topic…
This is just my point of view…which comes from watching what happened to the American Auto Industry… when Deming tried to help them… and we sent Deming to Japan…

What Deming was saying is what the Auto Industry needed… but they couldn’t see what they couldn’t see. They had no reference point.

What Sean and I are giving is a reference point. We see companies that do see this, are using it as a competitive advantage…

And my prediction is that – those companies that don’t “get” it soon, will be out of business in 5 years.

Thanks again for reaching out and taking the time to read, listen and comment!
Chuck Van Court says:
January 22, 2010 at 2:28 pm

Hello Natalie:

Thanks for taking the time to respond. I totally hear what you are saying, but I believe that only poorly managed companies must make strategic decision on blind faith since they are not willing to do the often challenging work of defining real value and measurable outcomes for new technologies.

The real question I was hoping to get your take on relates to how companies should use Twitter in customer support. Any thoughts you can share on this would be appreciated. Thanks!

Question repeated from above:

I also have a question: If and when Twitter sustains traction to the same volumes of the other support channels, beyond being used as a “megaphone” by a consumer in an attempt to force a company’s hand, do you really think anyone would prefer using a non-threaded channel limited by 140 bytes over alternative support options? If the primary reason for usage of the Twitter channel for support is to force a company’s hand or to circumvent longer queues, would it not be more prudent for a company to only support Twitter as an entry point into other support channels capable to really deliver a positive customer experience rather than ever opening the proverbial barn door and supporting Twitter as a support channel unto itself?

Chuck Van Court
CEO and Fouder
FuzeDigital
DrNatalie says:
January 22, 2010 at 11:00 pm

Ah… yes… that question about Twitter and Customer Service– should companies use Twitter for Customer Service.

Well I think that it doesn’t matter what I think. It’s already happened. Over 100 companies are using Twitter for Customer Service.

One of my most favorite sites… is Mashable… they were one of the first to report on using Twitter for customer service. Here’s some links:

http://mashable.com/2009/01/21/best-twitter-brands/

http://mashable.com/2009/05/09/twitter-customer-service/

http://mashable.com/2009/11/17/fortune-100-companies-twitter/

I am just finishing research on how CarPhone Warehouse using Twitter for customer service. I’ll post on that as soon as the document is live.

Twitter may not seem like an obvious choice for customer service… but it is, if not anything else… and “embarrassment channel” –

What do I mean by that? It is often by those that are early adapters that change begins. Those that use Twitter in their lives, are some of those change shapers. And now when companies see people saying that their customer service interactions are horrible… and it is broadcast to millions… companies are now getting embarrassed enough to begin to see themselves as their customer’s see them… and the shift has begun!

Thank you Chuck! for asking!
@drnatalie