The Return on Influence of Customer Service

Return-on-Influence-Customer-Loyalty

In “Return on Influence, the New ROI,” Amy Jo Martin explains a new concept – ROI – Return on Influence. It was derived from the need to prove the value a professional athlete can achieve for a company. The professional athlete’s influence could create both a value to a product and value to a company. Martin measured the value of this influence with Return on Influence.

Indeed, companies hire athletes and celebrities to sell and display their products. The goal of the celebrity endorsement is to make a company’s product more desirable and appealing in the marketplace. Being more desirable is certainly the first stop; however, the greatest influence a company has with a customer is through their customer service. After the consumer’s first stop to measure a product’s desirability and make a purchase, the product’s ability and longevity to satisfy the consumer’s needs determine its real value to the purchaser. This value is measured long after that customer’s initial purchase.

After the product’s purchase is when the true quality of the product and customer service matters for both the consumer and the company. Unfortunately companies may be looking at only the Return on Influence in one area. Companies have different budget buckets for functions. Social media has a budget bucket. Customer service has a budget bucket. Marketing has a budget bucket. Often because these budget buckets are separate, there’s not effective collaboration between these different functions. This lack of collaboration causes money spent in one bucket to be wasted quickly because the other bucket doesn’t respond effectively.

I would like to see a Return on Influence measured by the Return of Influence the customer service person creates with the customer. Here is where people and service can truly influence consumers, transform them into Loyal Promoters for a product and company, spreading the word to future buyers and generating additional dollars for companies. The sad part is many companies will not even allow the customer service person to do something like the JetBlue agent proactively did for Rob Markey in his Tuesday, September 27, 2011 HBR blog post. Companies must learn to trust their professional customer service people to deliver great customer service. This is achieved by training, supervising, managing and leading effectively. When it’s done right great customer service results. In our GoldenTouchpoint™ program we show companies and organizations how to provide truly great service by empowering the front-line customer facing employees to deliver on the consumer’s practical needs, emotional needs and create a low-effort experience for each customer.

When customers become engaged and loyal they tell people about it. The power of social media is that it’s a two-way dialogue. Testimonials come back to the company in social media’s ongoing dialogue. Social media’s dialogue is a significant measurement in calculating Return on Influence no matter how you view it. The key is customer loyalty can only be built by dialogue.

Original HBR Blog Post Below:

Return on Influence, the New ROI By: Amy Jo Martin

Three years ago, I invented a social media metric. I’d be lying if I said this was a divinely inspired event. I did it because it was necessary.

Here’s the story: Three years ago, I was prepping for a meeting where I hoped to convince a major CPG brand that my celebrity client was more influential in social media than other celebrities, and therefore they should invest their dollars in my proposed “social media endorsement deal.” (Remember at the time, Facebook was just emerging from its college roots and Twitter was nowhere yet.)

The dilemma, I knew, was the metrics. I knew that the company would expect me to defend my client’s value with the standard “cold metrics”–reach, frequency, page views, impressions, eyeballs captured. Executives who are about to spend lots of money like numbers, even when they know they’re flawed. Numbers help justify decisions, remove some risk, and limit accountability.

I agreed with the potential client that these were important to have, but I also knew they weren’t enough. In social media, I argued, my celebrity client could have the same or a fewer number of fans, followers and website page views as another celebrity, but still be a better investment for the brand, because my client could convert more of those followers into something positive for the brand–click throughs, sign-ups, media consumption or even product purchases.

What drives that conversion are “warm metrics”–engagement levels, viral factors, sentiment analysis. Even today marketers can be skeptical of warm metrics, because they defy easy math. Three years ago, many were downright dismissive of them. They were the fluffy intangibles you used when you couldn’t build a statistical case for investment. Business people like structure. We like rules, industry standards and compartments where our solid numbers to be housed. Sentiment? Not so much.

Still, I believed in this blend of cold and warm metrics. In fact, I believed if you ignored the warm metrics, you ran the risk of hiring the wrong social media partner, because the old school cold metrics alone are actually quite bad at capturing influence.

Still I had to prove it. So I came up with ROI – Return on Influence.

I was lucky to be able to draw upon my previous experience as the director of digital media and research for the Phoenix Suns. In that position, I was constantly needing to prove “fan affinity” (a warm metric) to big brand-marketing partners who spent seven figures on their sponsorship deals with the team. These brands had options, often with competitors (NFL, NHL, MLB) and more traditional channels (TV spots) that might be able to tell a better cold metric story than I could.

But I realized that social media provided a way to measure something fan affinity in a way a TV spot never could. Why? Social media communication is two-way. It’s a dialogue versus a monologue. Instead of promotions, it creates conversations, sometimes unprompted conversations that can be listened to, recorded, and measured. No longer did we have to say, “Trust us, our fans really like the team.” Suddenly I had data to show how fans really liked us.

This isn’t just about celebrities or sports teams, either. Intuitively, it’s easier for most people to grasp the concept when talking about tweeting wide receivers, but all brands have influence and it can be measured in the same way.

Once you recognize that each entry into the social conversation is creating influence, you track it. A tweet is a transaction. So is a retweet. So is a purchase that results from a retweet. Unlike outdoor and TV advertising, say, marketers can track online behavior from a social channel from the initial marketing message all the way through to purchase.

The next step is to associate influence to investment. This is where the dollars come in. Divide the total revenue generated via social efforts by the number of social media fans and followers, and you get a per-fan/follower value.

Once you do this, it opens eyes. I’ve found with brands varying from DoubleTree by Hilton to high profile individuals that there’s a direct correlation between Return on Influence and Revenue Available Per Fan and Follower. The time interval of this relationship is the key variable that I’m still studying. When brands figure out how to control the amount of time lapsed between the cause and effect, the art of social media becomes scientific, and the warm metrics become as accepted as the cold ones.

The more marketers accept the concept of measuring influence relative to reach, the quicker social media industry standards will surface. Social networking revolves around the art of people interacting with people, not logos. People have influence. Things do not. Ultimately, influence is power that differentiates.

Blog posts by Amy Jo Martin





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About Jack Dempsey

Jack Dempsey, CEO, heads Pretium Solutions’ Customer Experience & Sales Area focusing on Customer Loyalty, Brand Loyalty and Customer Retention Strategies. He directs Pretium’s revolutionary customer loyalty program, the Golden Touchpoint™. Pretium Solutions is a premier provider of cutting-edge, sustainable and globally-recognized customer experience management solutions and customer service, call center and sales training, consulting and leadership programs. Pretium shows companies how to create, build and maintain customer loyalty, the most important measure of a company’s success with its customers and the most profitable customer service outcome.

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