Marketers habitually find it hard to quantify the value of what they do, and their use of social networks is the latest manifestation of this difficulty. Why is it so hard to determine the business value of social networks? This article explores the slippery slope of coming up with a useful ‘social media ROI’ and offers new ways to understand social networking’s value proposition
Almost two years ago, in an article in the July-August issue of the Ivey Business Journal, “Social Networking: The View from the C-Suite,” we wrote that, “Many managers today are uncertain about what social networking really means, how it fits their business strategy, and most importantly how they can define its practical value to the business.” How little the world changes! Despite two years of increasing corporate social media activity, our research is telling us that the C-Suite is still finding it extremely hard to define their organization’s value proposition for social media.
2. Sales lift vs. customer relationship value lift
Analysis has tended to become more granular over time, i.e. at a more detailed, transactional relationship level – such as for loyalty card responses, propensity, attrition, fraud, attribution, lifestyle segmentation, or event triggers – with calculations evolving from computations of groups of customers, down to individual customers’ current value, and then to individual customers’ net present value.
Reprint from Ivey Business Journal
[© Reprinted and used by permission of the Ivey Business School]