- September 19, 2011
- 28 Comments
New media marketing is creating an undercurrent that is shifting the very foundation of business. Without a full understanding of what’s possible, a clear view to the future or an idea of the strength or extent of the market undertow, executives cautiously embrace emerging social and mobile channels based on guidance of internal champions and external pressure from competitors and customers alike. But, leaders can only lead when their vision is focused and direction is defined. The ability to execute becomes paramount and the gaps that exist between goals and capabilities must be identified and solved for quickly to stay the course.
Metrics are critical indicators of performance and progress yes, but when new media enters the fray, more questions than answers cloud the ability to see beyond the horizon. And, as new media becomes increasingly disruptive, innovation and a bit of clairvoyance are required to serve up new hypothesis that help leaders make decisions in the absence of history or precedence. It is in these times when competitive threat is equal to, or in some cases less than the threat of digital Darwinism. When technology and consumer behavior cause change faster than your ability to recognize and adapt (and lead), we surface the first and potentially dangerous series of slipping points that like the game of Chutes and Ladders, cause us to fall further away from our position or intention.
By the Numbers
These days, solutions are more experimental than they are evident. As a result, businesses rely on what they know. In this case, existing metrics and frameworks are applied to help ease testing and experimentation. Earlier this year Duke University’s Fuqua School of Business and the American Marketing Association published the results of its annual CMO Survey. Among the findings, we learn how executives are applying traditional metrics to new media to measure performance. Additionally, we can compare the current trends in measurement to this time last year to get a view into how businesses are adapting measurement against new opportunities.
At the top of the list, we see that traffic (hits/visits/page views) is the most important metric according to the report, increasing from 47.6% to 52.2% in one year. Naturally, repeat visits rank second at 34.9%. However, a less important metric, the number of followers or friends, commands the third spot at 34.1%. This represents a huge jump from 24% the year before. Clicks to action were surprisingly positioned in fourth with 29.3%, up from 25.4%, with marketers tracking conversion rates from visitor to buyer. I would have expected this in second or third. And, oddly enough, the importance of measuring sales fell from 17.9% in 2010 to 13.3% in 2011. The importance of measurements such as revenue per customer also plunged from 17.2% to 9.6%; customer retention costs dipped from 7.7% to 6.4%; and, profits per customer dropped from 9.4% to 4.8%.
At first glance, I can’t tell if these numbers represent the migration of an organization toward a culture of customer-centricity or a culture of compromise. Are these numbers falling because they’re difficult to measure or is it because they’re not important? Certainly with all of the discussions about ROI and the importance of proving the ability to meet customer needs while triggering meaningful outcomes, we could find a way to improve engagement strategies beyond the 3F’s (friends, fans and followers). To survive digital Darwinism, we must challenge ourselves and management to migrate toward relevance and significance. That means new metrics are necessary to measure progress in a new direction.
Over the last several yeras I’ve met with countless business leaders seeking input into the insights and corresponding metrics necessary to listen, learn, engage, and adapt in a new era of empowered consumerism. In fact, I believe that a significant gap exists between existing metrics and those required to chart new courses toward relevance. For example, one metric that I hear more often than not is the reduction of inbound customer inquiries as a result of DIY or automated knowledge bases. Of course, if the customer can answer their own questions, they won’t need us. But, that same metric is carrying over to social media. If a Tweet can resolve a problem, the company has succeeded in reducing the inbound burden to the contact center.
At a time when executives claim that getting closer to customers is a top priority for 2012 and beyond, how is it that we can employ metrics that continue to do what businesses have done so well over the last couple of decades – the ability to move further away from customer engagement through barriers of technology? Customers just want to hit “0” to talk to someone live. The same is true for new media. Customers are in control of their own experiences, what they share, and how they make decisions. Businesses can either accept this reality and work towards a collaborative business model of co-creation or simply choose to not be part of the long-term equation.
With an effective reduction of published negativity, we should explore acts of increasing customer engagement as a way of cultivating meaningful and productive experiences. It is through the generation of positive experiences that we can assure the materialization of other important business drivers such as sales, referrals, acquisition and retention costs, etc. More importantly, we can ensure relevance. Everything begins with understanding what it is that customers want and mapping these findings to what executives are driving toward. In the process, you may in fact find that a gap exists. But discovering the gap is what you’re supposed to do when the future is uncertain. It is what you do with this new found awareness that defines your place in the hearts, minds, and wallets of customers and prospects.
Ignorance is bliss until it’s not. After all, if ignorance is bliss, then awareness must be awakening.
The End of Business as Usual: Rewire the way you work to succeed in the consumer revolution
ENGAGE!: The complete guide for businesses to build and measure success on the social web
Click here for your favorite infographics…now in 22 x 28 poster format!