In today’s “viral”, social media driven, hyper-communicative environment, businesses need to get up to speed and capitalize on the new communication dynamics by updating traditional performance metrics with new social media performance metrics. Management theorist Peter Drucker once said: “The new information technology, the Internet, and e-mail have practically eliminated the physical costs of communication”. The cost accounting portion of my consulting career somewhat prohibits me from fully agreeing with Professor Drucker (labor-related administrative costs associated with the management of these new technologies, telecommunications network costs, etc.). But aside from my cost accounting “nitpicking”, Prof. Drucker is spot on in that communications costs have been drastically lowered with the advent of these new technologies. So now that the natural cost reduction play/strategy has been realized by most firms in today’s thriving industries, how do companies monitor success along these new communication media?
When thinking about all of the communication benefits of the new social media, certain industries immediately come to mind. Industries like real estate, automotive, media and entertainment and other service-based industries have revenues tied to and directly dependent on continuous integration and communication with customers, vendors, third-parties and other intermediaries. The particular “social media” metrics to be monitored and managed for business success naturally are tailored to the specific demands of each industry.
Auto Dealership: percent of content-based e-mail blasts read; other outbound contacts (phone, e-mail, texts); inbound contacts (phone, e-mail, texts); developed leads, conversion rates, number of social media followers (Twitter, Facebook, etc.); conversion of followers to developed leads; etc.
The list of communications-related metrics continues based on how simple or complex the efforts are on the part of the dealership to reach potential buyers and sellers of automobiles. Tracking and understanding these metrics are at a minimum the first step in understanding that historically unmeasurable metric, “return on marketing/advertising spending” which will be a metric that will give dealerships the ability to differentiate themselves from others in terms of financial performance. Again, these social media metrics will differ as one looks from industry to industry due to the way in which these industries decide to use the communications power of social media. There are new social media measurement sites that attempt to measure the potential value of social media to a company’s overall business model. Klout.com challenges companies to “measure the influence that social media has on your business based on your ability to drive or influence action”. A company’s Klout score uses data from social networks in order to measure:
- -True Reach: The number of people that you influence
- -Amplification: The degree to which you influence them (i.e. how much)
- -Network Impact: The influence of your network
When this type of measure is brought into a workplace, the knowledge economy concept becomes introduced, and in turn thought leadership becomes driven from within the organization through continual contributions to intranets, internal blogs and document development. Think about individual sales people within an auto-dealership looking to not only become better sales people but sharing ideas that my benefit the entire sales force and overall dealership. The Klout measures are aimed at showing companies that using social media to enhance your enterprise-customer relationship is only one step and that social media can be equally effective in driving internal knowledge growth and development. The ultimate aim of using social media to drive internal efficiencies is to ultimately have a recognition, reward and incentive plan that is now driven by new additional and relevant measures, in addition to the old way of solely looking at sales.
Again, how a company uses social media to achieve the optimum value or maximum opportunity will depend on the company, their internal resources and management thinking. At Viral Solutions, there are both the sales and consulting resources that your company can access to make sure that you are prepared to compete in the new “viral economy”