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Yesterday, the above infographic popped up on my radar (thanks, V. Harris). At first, I thought “here we go again: another crap social media ROI infographic.” But then I took a closer look and I got it. It’s actually not bad. Well… up to a point.

Part 1 – Showing that basic business literacy is still lacking in the digital marketing space:

Verdict: Good.

Here’s what this part of the infographic tells us:

1. Marketers still mistake metrics like net followers/fans, web traffic, and social mentions (all essentially reach metrics) for ROI. Less than 30% of them consider sales to be an element of ROI. Still.

2. 73% of CEOs think marketers don’t understand basic business terminology and objectives.

3. Is it any surprise that CEOs think that marketers are essentially dumbasses and that social business is bullshit?

If that part of the infographic doesn’t perfectly illustrate the urgent need for an infusion of actual competence on every level of the social business management scale, I don’t know what does. This situation is absurd.

The silver lining: Over 70% of marketers still haven’t read my book, so we still have a lot of potential sales there.

Okay, all kidding aside, the fact that over 70% of marketers still qualify followers and fans as a measure of ROI is… shocking. Seriously. Web traffic? Social mentions? Here’s a fix: Send these people back to school. It’s almost 2013. We should be over this by now. Anyone who still thinks that way needs an intervention. It might have been acceptable in 2008, but not anymore.

Part 2 – Showing some financial outcomes that can be tied back to social media activity (and budgets):

Verdict: Good.

Here, we see examples of social media activity having a direct impact on sales. The cool thing about it is that if you go back and look at how much that social media activity cost (man hours, technology, etc.), you can assign a specific cost to it. If you have the gain figures and the cost figures, you can calculate ROI.

Thumbs-up. More of that, please.

Part 3 – “Last Touch Conversions” and the problem with last-click attribution models:

Verdict: Last click attribution is too limited a model to illustrate the full impact of social media activity on sales.

Here’s where the infographic runs into a wall. We’ve talked about this: It isn’t so much that last click attribution is wrong in assuming a cause and effect relationship between clicking on a link and making a purchase. Clearly, there’s a strong connection there. There’s intent, if anything, and that’s important, so we need to track that and put numbers to it. But focusing too much (or at all) on last click attribution is a lot like looking at consumer behaviors through a simple, robotic, kind of binary lens that only accounts for a very small fraction of the customer journey. It completely ignores the dozen (if not hundreds) of other triggers that led a consumer to eventually click on that link and decide to make a purchase.

Last click attribution doesn’t take into account the full scope of discovery (that is to say, how a consumer found out about the brand and/or product). It doesn’t take into account the impact of advertising, marketing, PR, media exposure and word-of-mouth recommendations. It doesn’t take into account the months, weeks, days or hours of research done by the consumer before clicking on that link. In other words, the entire decision process that takes place before a purchase (discovery, research, preference and validation) is excluded from the last click attribution model. Months of social interactions: gone. Customer service experiences: gone. We’re down to attributing a transaction to the very last thing a consumer did before pulling out a credit card. That’s a lot like a military unit attributing a victory in battle to the last bullet fired. Focusing only on the final few minutes of a long and complex customer journey is terribly-short-sighted, and that sort of methodology (and mentality) drags us into a ditch of assumptions as to cause and effect that generally leads to poor consumer insights and ultimately investments in the wrong types of activities.

Last click attribution is easy, sure, but since when does easy trump smart or relevant? The truth is that it’s a lazy mode of thinking. That’s right, I said it: It’s lazy.

A couple of weeks ago, we looked at how Ohtootay helps companies move beyond last click attribution (and last touch conversions) to map how consumers actually behave – that is to say how they shop. It’s a good start. We need more of that kind of thinking and more of that kind of insightful application of technology. The objective for businesses and marketing teams has always been this: to understand consumer behaviors and how to affect them in a way that leads them to notice, want, buy and ultimately recommend products. Last click attribution doesn’t do that. It’s a snapshot of the final step in a long transaction funnel. That’s all. You want to measure ROI? You want to know what’s working? You want to fine-tune the way your traditional marketing, social channel activity, customer service, product design, packaging, retail experience and competitive landscape work together (or don’t)? Great. Then you’re going to have to work a little harder to figure out how all the pieces fit, and how to make them fit even better.

Personally, I think that’s half the fun of the marketing profession: figuring out what works and what doesn’t – and why, solving those kinds of problems, fine-tuning and then fine-tuning some more… That’s what marketing is about: making it work. Understanding how to move all of those needles so your company or product team gets what they want, and your customers do too. Do it right and everyone walks away happy. That’s the goal. Happy customers, happy product managers, happy investors, job creation on the back end… That’s the big picture, one piece of the daisy chain at a time.

So a word of caution: If you’re not into asking questions, doing research, or caring enough to bust your ass to do real work, hard work – sometimes tedious work – to kick ass, maybe you shouldn’t be in the marketing business. There’s a reason why 73% of CEOs think that marketers lack business credibility. It’s because of laziness and apathy. Every marketing pro who still hasn’t learned how to explain the relationship between ROI and social media contributes to that credibility problem. Every marketing pro who still uses last click attribution as their go-to metric to gauge the effectiveness of a social channel contributes to that credibility problem. Every marketing pro who isn’t working in concert (hell, in tandem) with a product group and a sales department contributes to that problem.

Give that some thought. And if that isn’t enough to give you pause, maybe this will: If you work in marketing, 73% of CEOs right now can’t figure out why they’re paying you. And you know what? They’re looking for someone better.

Fix that.

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Social Media ROI – Managing and Measuring Social Media Efforts in your Organization was written specifically to teach managers and executives how to build and manage social media friendly business programs and incorporate social technologies and networks into everyday business operations. The book is divided into four parts: social media program strategy & development, social media program operationalization, social media program management, and best practices in measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, fix that too. It makes for a great desk reference.

(Now available in several languages including German, Korean, Japanese and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Digital Crisis management is hard work. It’s complicated work. But it’s also not rocket science once you understand the mechanics of the process. Today, let’s break down crisis management into five simple components (or phases) and briefly explore the structure of each one. Understanding how to break down a digital crisis management model that way, looking at what types of tools to use and how,  and going through a few general observations in regards to best practices will hopefully arm you with helpful guidelines should your organization ever find itself having to deal with… an unfortunate circumstance involving a lot of very angry people.

To illustrate how this works, we will look at screen shots of what @KitchenAid’s recent PR crisis looked like on a basic Tickr dashboard. If you aren’t familiar with what happened and what the crisis was about, you can catch up here (just remember to come back). Hang on… before you go anywhere, let’s start at the beginning:

… (Continue reading).

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Oh, and while you’re here…

Social Media ROI – Managing and Measuring Social Media Efforts in your Organization was written specifically to teach managers and executives how to build and manage social media friendly business programs and incorporate social technologies and networks into everyday business operations. The book is divided into four parts: social media program strategy & development, social media program operationalization, social media program management, and best practices in measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, fix that too. It makes for a great desk reference.

(Now available in several languages including German, Korean, Japanese, Italian and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Yesterday, I promised you a post that would help hiring managers identify key skills and abilities needed in a prospective hire looking to fill a social media manager role. Note that we are talking about management, not just content creation or community relations. Before I get into it, a few considerations:

1.  This list isn’t complete. It is meant to help guide you and point you in some key directions, but you’re going to have to add a few requirements of your own and ignore the ones that don’t apply to your specific needs.

2. Every company has different capabilities and objectives. Every company will also look at social media’s role in a  completely unique way. Some will see it merely as a digital marketing function while others will see it as a fully integrated component of an organization-wide communications ecosystem. Because every company is unique, every social media management position’s requirements will also be unique. Keep that in mind.

3. Are you hiring someone who will help you build a social media program from scratch, or are you hiring someone who will manage an existing social media program? Because the requirements for each won’t be the same.

4. Are you a small, medium, local company, or are you a global consumer brand? Because again, the degree of complexity (internal to the org and external to the org) will require completely different types of resumes.

5. Are you looking to fill a strategic role or a tactical role? Strategic = more vision and planning oriented. Tactical = more day-to-day, operationally oriented.

6. Are you a niche or specialty brand in an obscure industry, or an international superbrand? Because again, the req is going to look different based on that.

7. Is your social media program purely internal or are you working with one or five or twenty agencies as well?

8. Is your social media program focused on lead generation and fan acquisition, or is it also focused on customer development, customer retention, and/or organic WOM? Again, huge differences in skill-sets and abilities to consider there.

9. How many departments will this role be working intimately with? Mostly digital marketing, or also HR, Customer Service, Product Management, Technical Support, PR and R&D?

10. Is your brand a challenger? A rebel? Conservative? Academic? Irreverent? Political? Apolitical? These things matter. Hire someone who understands who you are and will fit within your culture and brand ecosystem.

Right off the bat, you kind of have your work cut out for you. Building out a req for your social media management role is going to require a little more work than just throwing together some bullet points and filling the blanks on a standard x years of blogging experience bullets. This is not an exercise in generic job req design. There is nothing generic about this hiring process.

Here are a few bullets for you:

Basic skills & qualities:

  • Applicant has had a continuous professional presence in the Social Media space (via blogs, Twitter, Facebook, Ning or other platforms) for at least two years.
  • Applicant has managed a business blog and/or business community for a minimum of one year.
  • Applicant has built or managed a community for longer than one year. (This could be as a product manager or customer service rep, for instance.)
  • Applicant demonstrates a thorough knowledge of the Social Media space, including usage and demographic statistics for the most popular/relevant platforms as well as a few niche platforms of his/her choice.
  • Applicant demonstrates a thorough understanding of the nuances between Social Media platforms and the communities they serve.
  • Impeccable communications skills.
  • Applicant understands the breadth of tools and methods at his/her disposal to set goals and measure success in the Social Media space. (Applicant’s toolkit is not limited to Google analytics.)
  • Applicant has been active on Twitter for more than two years.
  • Applicant knows who Scott Monty, Frank Eliason, Jeremiah Owyang, Porter Gale and Christopher Barger are, and can explain why these names are important to the social media profession.
  • Applicant can explain succinctly why buying followers and fans is both unethical and counterproductive.
  • Applicant demonstrates a high level of proficiency working with popular Social Media platforms and apps such as FaceBook, Twitter, LinkedIn, Flickr, Ning, Seesmic, YouTube, FriendFeed, WordPress, Pinterest and Tumblr. (As applicable.)
  • Applicant is capable of mapping out a basic Social Media monitoring plan on a cocktail napkin.
  • Given 5 screens to play with, applicant can build you a social media monitoring control center in just a few days.
  • Applicant can cite examples of companies with successful social media programs and companies with ineffective social media programs. He/she can also argue comfortably why each was either successful or unsuccessful.
  • Applicant has spent at least one year working in a customer-facing role, preferably customer-service related.
  • Applicant is more excited about engagement, building an internal practice and finding out about your business’ pain points than he/she is about firebombing you with the awesomeness of their personal brand.

Advanced skills & qualities:

  • Applicant has developed and managed marketing programs before. Not just campaigns but programs. Find out about them. What worked? What didn’t work? Lessons learned?
  • Applicant has at least two years of experience managing projects and working across organizational silos. What worked? What didn’t? Etc.
  • Applicant has managed a brand or product line for more than one year.
  • Applicant has demonstrated a strong ability to forge lasting relationships across a variety of media platforms over the course of his/her career.
  • Applicant understand the difference between vertical and lateral action when it comes to customer/community engagement – and has working knowledge of how to leverage both.
  • Applicant has managed national market research projects.
  • Applicant is comfortable enough with business measurement methods to know the difference between financial impact (ROI) and non-financial impact. He/she also knows why the difference between the two is relevant.
  • Applicant demonstrates the ability to build and manage a Social Media practice that works seamlessly with PR, product marketing, event management and customer support teams within the organization.
  • Applicant has managed a team for more than one year. He/she was responsible for the training and development of that team.
  • Applicant has spent at least one year in a project management role outside of an ad agency, PR or other Marketing firm.
  • Applicant has been responsible for managing a budget/P&L.
  • Applicant already has the framework of a Social Media plan for your company before he/she even walks through the front door, and thankfully, it doesn’t involve setting up a fan page on FaceBook.

Enterprise & Global CPG skills:

  • All of the above, but with 5 – 10+ years of experience instead of 1 – 3.
  • For everything else, scale up.

What you shouldn’t waste a whole lot of time worrying about:

  • The applicant’s age.
  • The applicant’s Klout or Kred scores.
  • The applicant’s number of followers on Twitter or fans/likes on Facebook.*
  • The applicant’s SxSW or blogworld stories.
  • How many Top 10, 15, 20 or 100 lists the applicant is on.

* Less than 1,000 Twitter followers is suspect. Unless they are a media celebrity, more than 75,000 Twitter followers is suspect as well.

All right. You still have some work to do, but that ought to get you started.

Other sources:

Social Media ROI – Managing and Measuring Social Media Efforts in your OrganizationParticularly Chapter 6 (pages 73-82).

The Social Media Strategist: Build a Successful Program from the Inside Out – by Christopher Barger

Smart Business, Social Business: A Playbook for Social Media in Your Organization – by Michael Brito

I hope that was helpful.

Cheers,

Olivier

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Social Media ROI – Managing and Measuring Social Media Efforts in your Organization was written specifically to teach managers and executives how to build and manage social media friendly business programs and incorporate social technologies and networks into everyday business operations. The book is divided into four parts: social media program strategy & development, social media program operationalization, social media program management, and best practices in measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, fix that too. It makes for a great desk reference.

(Now available in several languages including German, Korean, Japanese and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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I told you I would bring back this post regularly. Here it is again, until the day when everyone understands how simple this is. Okay, here we go:

If you are still having trouble explaining or understanding social media R.O.I., chances are that…

1. You are asking the wrong question.

Do you want to know what one of the worst questions dealing with the digital world is right now? This:

What is the ROI of Social Media?

It isn’t that the idea behind the question is wrong. It comes from the right place. It aims to answer 2 basic business questions: Why should I invest in this, (or rather, why should I invest in this rather than the other thing?), and what kind of financial benefit can I expect from it?

The problem is that the question can’t be answered as asked: Social media in and of itself has no cookie-cutter ROI. The social space is an amalgam of channels, platforms and activities that can produce a broad range of returns (and often none at all). When you ask “what is the social media or ROI,” do you mean to have Facebook’s profit margins figure in the answer? Twitter’s? Youtube’s? Every affiliate marketing blog’s ROI thrown in as well?

The question is too broad. Too general. It is like asking what the ROI of email is. Or the ROI of digital marketing. What is the ROI of social media? I don’t know… what is the ROI of television?

If you are still stuck on this, you have probably been asking the wrong question.

2. So what is the right question?

The question, then, is not what is the ROI of social media, but rather what is the ROI of [insert activity here] in social media?

To ask the question properly, you have to also define the timeframe. Here’s an example:

What was the ROI of [insert activity here] in social media for Q3 2011?

That is a legitimate ROI question that relates to social media. Here are a few more:

What was the ROI of shifting 20% of our customer service resources from a traditional call center to twitter this past year?

What was the ROI of shifting 40% of our digital budget from traditional web to social media in 2011?

What was the ROI of our social media-driven raspberry gum awareness campaign in Q1?

These are proper ROI questions.

3. The unfortunate effect of asking the question incorrectly.

What is the ROI of social media? asks nothing and everything at once. It begs a response in the interrogative: Just how do you mean? In instances where either educational gaps or a lack of discipline prevail, the vagueness of the question leads to an interpretation of the term R.O.I., which has already led many a social media “expert” down a shady path of improvisation.

This is how ROI went from being a simple financial calculation of investment vs. gain from investment to becoming any number of made-up equations mixing unrelated metrics into a mess of nonsense like this:

Social media ROI = [(tweets – followers) ÷ (comments x average monthly posts)] ÷ (Facebook shares x facebook likes) ÷ (mentions x channels used) x engagement

Huh?!

Equations like this are everywhere. Companies large and small have paid good money for the privilege of glimpsing them. Unfortunately, they are complete and utter bullshit. They measure nothing. Their aim is to confuse and extract legal tender from unsuspecting clients, nothing more. Don’t fall for it.

4. Pay attention and all the social media R.O.I. BS you have heard until now will evaporate in the next 90 seconds.

In case you missed it earlier, don’t think of ROI as being medium-specific. Think of it as activity-specific.

Are you using social media to increase sales of your latest product? Then measure the ROI of that. How much are you spending on that activity? What KPIs apply to the outcomes being driven by that activity? What is the ratio of cost to gain for that activity? This, you can measure. Stop here. Take it all in. Grab a pencil and a sheet of paper and work it out.

Once you grasp this, try something bigger. If you want to measure the ROI of specific activities across all media, do that. If you would rather focus only on your social media activity, go for it. It doesn’t really matter where you measure your cost to gain equation. Email, TV, print, mobile, social… it’s all the same. ROI is media-agnostic. Once you realize that your measurement should focus on the relationship between the activity and the outcome(s), the medium becomes a detail. ROI is ROI, regardless of the channel or the technology or the platform.

That’s the basic principle. To scale that model and determine the ROI of the sum of an organization’s social media activities, take your ROI calculations for each desired outcome, each campaign driving these outcomes, and each particular type of activity within their scope, then add them all up. Can measuring all of that be complex? You bet. Does it require a lot of work? Yes. It’s up to you to figure out if it is worth the time and resources.

If you have limited resources, you may decide to calculate the ROI of certain activities and not others. You’re the boss. But if you want to get a glimpse of what the process looks like, that’s it in its most basic form.

5. R.O.I. isn’t an afterthought.

Guess what: Acquiring Twitter followers and Facebook likes won’t drive a whole lot of anything unless you have a plan. In other words, if your social media activity doesn’t deliberately drive ROI, it probably won’t accidentally result in any.

This is pretty key. Don’t just measure a bunch of crap after the fact to see if any metrics jumped during the last measurement period. Think about what you will want to measure ahead of time, what metrics you will be looking to influence. Think more along the lines of business-relevant metrics than social media metrics like “likes” and “follows,” which don’t really tell you a whole lot.

6. R.O.I. doesn’t magically lose its relevance because social media “is about engagement.” 

If your business is for-profit and you are looking to use social media in any way, shape or form to help your business grow, then all of your questions regarding the R.O.I. of investing in social media activity are relevant. Any social media consultant who tells you otherwise is an idiot.

Concepts like Return on Engagement, Return on Influence, Return on Conversation are all bullshit. Nice exercises in light semantic theory, but utterly devoid of substance. First, they can’t be calculated. Second, they bring absolutely zero insight or value to your business. In fact, they pull your attention away from legitimate outcomes. Third, they are not in any way shape or form substitutes for Return on Investment.

Fact: If a social media “expert” tells you that ROI isn’t important, he (or she) is a hack. Remove them from your organization immediately.

Fact: A social media “expert” who doesn’t know how to calculate ROI properly (or teach you how to do it) might just be an expert at blogging, and not social media program management or social business integration.

Note: Integrating social media and business requires more experience than just making it look like 100,000+ “people” follow you on Twitter. Anyone can become a speaker nowadays. Anyone can publish a book and make themselves look like an expert. Unfortunately, at least 9 out of 10 social media speakers/experts/gurus/authors couldn’t effectively manage a Fortune 500 social media/business practice if you infused their brains with an extra 100 points of IQ and enrolled them in an executive MBA course. Be very careful who you hire, whose blogs you read, and whom you elect to influence your business decisions.

“Digital Influence” does not necessarily reflect competence. Always remember that. Some of the dumbest and most dishonest people in this business have enormous followings on Twitter, blogs and G+, and very high Klout scores to boot. (They spend an enormous amount of time making sure they do.) Conversely, some of the most brilliant, competent, ethical people in this business aren’t all that visible. Why? Because they are too busy doing real work to focus all of their efforts building personal brands and better mouse traps.

There are other litmus tests, but the ROI bit is a pretty solid one: A so-called expert who skirts the issue or fails a simple ROI problem/test from your CFO probably isn’t as qualified to advise you as his or her Klout score might have suggested. 😉

7. … But R.O.I. isn’t relevant to every type of activity.

Having said that, not all social media activity needs to drive ROI. As important as it may be to understand how to calculate it and why, it is equally important to know when ROI isn’t really relevant to a particular activity or objective.

Technical support, accounts receivable, digital reputation management, digital crisis management, R&D, customer service… These types of functions are not always tied directly to financial KPIs. Don’t force them into that box.

This is an important point because it reveals something about the nature of the operational integration of social media within organizations: Social media isn’t simply a “community management” function or a “content” play. Its value to an organization isn’t measured primarily in the obvious and overplayed likesfollowers, retweets and clickthroughs, or even in impressions or estimated media value. Social media’s value to an organization, whether translated into financial terms (ROI) or not, is determined by its ability to influence specific outcomes. This could be anything from the acquisition of new transacting customers to an increase in positive recommendations, from an increase in buy rate for product x to a positive shift in sentiment for product y, or from a boost in customer satisfaction after a contact with a CSR to the attenuation of a PR crisis.

In other words, for an organization, the value of social media depends on two factors:

1. The manner in which social media can be used to pursue a specific business objective.

2. The degree to which specific social media activity helped drive that objective.

In instances where financial investment and financial gain are relevant KPIs, this can turn into ROI. In instances where financial gain is not a relevant outcome, ROI might not matter one bit.

Knowing when and how ROI matters (or not) will a) help you avoid costly mistakes and will b) hopefully help you make smart decisions when it comes to assigning precious resources and budgets to specific social media/business programs.

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By the way, Social Media ROI – the book – doesn’t just talk about measurement and KPIs. It provides a simple framework with which businesses of all sizes can develop, build and manage social media programs in partnership with digital agencies or all on their own. Check it out at www.smroi.net, or look for it at fine bookstores everywhere.

Click here to read a free chapter.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Every doctrine has to start somewhere. Even this one.

Want to boost your repeat business, get tons of free referrals, acquire bunches of new customers and get lots of positive buzz for free? There’s a pretty simple way to do it that doesn’t have to cost you a whole lot. Can you guess what it is?

Simple: Purge your company of assholes.

In fact, let me share item #1 in my Better Business Doctrine with you real quick. Are you ready? Here we go:

The customer-facing organization with the fewest assholes wins.

That’s it.

A simple example, from the friendly skies.

Does this seem like common sense? Of course it does. And yet here we are, routinely forced to endure a passive-aggressive or plain argumentative jerks who would rather exercise their “authority” than provide customers – even stressed out customers – with pleasant experiences. Why is that? Let me answer that question: Because companies are still hiring assholes.

Let me give you a few personal examples:

1a. The Continental flight I was on a few months ago

Flight Attendant (sternly) to a passenger in the process of turning off their iPad, just not quickly enough: “SIR! I need you to turn that off right now!” (Stares angrily at passenger until the device is turned off, and walks away, visibly annoyed.)

This probably happens to flight crews 20+ times per day. Every time a plane pushes off from the gate and prepares its approach, passengers in the middle of a song, of a paragraph, of a game of Angry Birds or Brick Breaker take an extra 10-30 seconds to “comply” with the “please turn off your electronic devices at this time” announcement on the PA. I get it. It probably gets annoying after a while. But guess what: You’re a flight attendant. Asking people to turn off their electronic toys comes with the job. You don’t have to be an asshole about it. Case in point:

1b: The Delta flight I was on the following day

– Flight Attendant (with a smile, jokingly) to a passenger so absorbed by what he was reading that he missed the “turn off your electronic devices” announcement and kept his Kindle going: “Good book?”

– Passenger, sensing that he was the object of the flight attendant’s attention, looks up from his device: “I’m sorry?”

– Flight Attendant, nonchalantly points at the Kindle: “Good reading?”

– Passenger, smiling back: “Yeah. Very!” (Gets it. Laughs. Starts to look for the “off” button.)

– Flight attendant: “You can turn it back on as soon as we’re on the ground.” (Walks away. Stops. Turns around.) “The book. What is it?”

Passenger answers. Flight attendant repeats the title as if to remember it, nods as if interested, and returns to his station.

The difference between the two isn’t training or pay. It isn’t corporate policy or procedure. It isn’t even company culture. The difference between the two occurrences is this:

One of these flight attendants, at some point during the course of her day, week, month, year or career, decided to let her asshole flag fly. The other one didn’t.

The basic impact of an asshole on your customers

How every asshole on your payroll affects your brand equity and impacts your business on a daily basis.

The impact of just one asshole’s behavior in a customer-facing role doesn’t stop with the one customer they treat poorly. Ten rows of passengers witnessed the exchanges on both flights, and I can guarantee that the ten rows on the Continental flight (30 passengers) were not impressed, while those on the Delta flight surely were. The ramifications of this are simple:

Whatever shot Continental had at influencing these 30 people to develop a preference for flying its friendly skies, for being more loyal, for looking to book future flights with them first, just flew out the window, not because of price, not because of delays, not because the plane was dirty. The price was great. The plane left on time and was impeccable. Continental did everything right except one thing: Someone there allowed an asshole (and probably more than one) to take on a key customer service role. Delta, on the other hand, scored some points.

And just to be fair, I’ve run into my fair of assholes working for Delta too. Few domestic US airlines seem immune to this phenomenon these days, except for perhaps Alaska Air, whose service and hiring practices, to my knowledge are still impeccable.

That said, my experience with Delta flight crews recently has been stellar, and not just because of this little anecdote. (Expect another post about what else happened very soon.) The difference between the two airlines for me was limited to my experience, as it is for all of us. Before the recommendations and the word-of-mouth and the marketing, our own experience shapes our bias.

Every positive experience creates positive associations with a brand, while every negative experience creates a negative association with a brand. More positive than negative = positive bias, preference, even loyalty. Consistent negative experiences (especially those that repeat themselves, like frequent delays, rude employees, apathetic managers, or being talked down to by an unprofessional asshole) = negative bias, preference for your competitors instead of you, and cynicism towards your brand.

The wheels of this mental equation – more emotional than empirical – start turning every time the thought of your brand comes up, and you need to understand it isn’t linear. The way we process the negative and the positive isn’t as balanced as you might think. For whatever reason, until you have grown into a loyal fan of the brand, the equation tends to be heavily weighed towards the negative: What you did right six months ago – or for the last thirty years,- doesn’t matter nearly as much as what you did wrong yesterday or just last week. That’s part 1 of how the mental math of brand experiences work. Part 2 is this: People will easily forgive incidents and accidents: Lost luggage, no available upgrades, long lines at the counter, mechanical problems, etc. Those things are out of your control, and once the anger and frustration subside, they’ll get it. Those negative impressions will evaporate. But one thing customers won’t forgive of any company: Being deliberately treated badly by an asshole.

Just as being an asshole  is a choice, – especially when dealing with a customer – hiring an asshole and keeping them on staff is also a choice. Because of this immutable fact, every company bears its part of responsibility in the hiring and promoting of assholes. Customers instinctively understand this, which is why when they run into one of your company’s assholes, they don’t blame the asshole for treating them poorly, they blame you. They blame the brand. The negative association they take home with them isn’t with that person (whose name and face they will forget inside of a week), but with you. Your assholes are faceless. All customers remember is the context: You. Your company. Your brand. The asshole just goes on being an asshole day after day, happy to have a job that pays him – even rewards him – for being a complete raging asshole all day long.

At the end of their shift, what you have to understand is that assholes in your employ don’t lose customers. You do. You spend your resources bringing them to the cash register, and every asshole on your staff spends all day making sure they never come back.

For this reason if none other, choose and evaluate your employees carefully.

The impact of just one asshole - amplified by social media

The real cost of letting assholes poison your brand from the inside.

If you are in business and have employees, let me be VERY clear about this: You are always only one asshole away from losing your best customer. The more assholes you have on staff, the faster and more often this will happen.

Not only that, but assholes tend to turn off, not only the one customer they happen to be unpleasant to, but everyone within earshot as well.

And today, ladies and gentlemen, “within earshot” isn’t just the ten rows on the plane or the ten people in the store waiting to check out. It is also potentially the hundreds of thousands of Facebook and Twitter users who might get a glimpse of that negative experience and be turned off in turn. Even millions, for that matter. (See previous 2 images, inspired by David Armano’s “Influence Ripples” theory (Edelman), below:)

David Armano's "Influence Ripples" (Edelman)

Let me give this a financial angle for you: Over the course of a year, one asshole on your staff, just one, can invalidate every dime your company has spent on advertising, marketing and PR. That’s the real liability of assholes. For small businesses, an asshole might only cost you $10,000 in wasted marketing, messaging or brand positioning. If you’re a bigger company, the same asshole (or a whole army of them, which is more likely) could cost you hundreds of millions of dollars in wasted marketing and brand management dollars.

That was part 1 of that equation. Part 2 is measured in lost revenue from disappointed customers taking their business elsewhere (your competitors thank you), lost revenue from all of the net new customers delighted customers would have recommended you to (but didn’t, because your assholes chased them away), and so on.

As a result, the higher the proportion of assholes to caring professionals a company has on staff, the more likely it is to have to spend more and more on marketing (with increasingly diminishing returns), while customer retention falls flat and even starts to dip into the red. Assholes aren’t just bad for customer service or your brand’s image. Assholes are bad for business. They are a counter-current to your hopes and dreams. They are the cancer that first weighs you down, then eventually makes your brand begin to fail, then wither, then die.

So let me repeat today’s lesson: The customer-facing organization with the least amount of assholes wins.

Don’t believe me? Ask Zappos. If you have never heard of Zappos, they sell shoes on the internet. That’s it. Well… LOTS of shoes. So many in fact that Amazon bought them for a pretty penny. Not only that, but Amazon decided not to make any major changes to Zappos’ leadership or culture. They left Zappos alone because the model works well just as it is. What’s Zappos’ secret? The customer experiences they create are stellar. Why are they stellar? Because Zappos pretty much has a “no asshole on staff” policy. Their hiring practices focus on this, and for good reason: They know that a happy customer is a loyal customer.

The simple truth (and we all know this) is that happy customers are good for business. In fact, no. They are GREAT for business: The happier a customer is, the more likely it is that they will come back, spend more, spend more often, and recommend you to all their friends. This is what you want. This is what makes businesses insanely successful. This. You don’t have to invent the iPad to be a huge success. Zappos just sells shoes on the internet. Virgin Airlines just flies people from airport to airport. Intercontinental Hotels (disclosure: client) are basically just… hotels. We’re not talking space walks or time travel, here. Your favorite restaurant, your favorite coffee shop, your favorite mechanic, none of them necessarily reinvented the wheel, right? They didn’t win a Nobel prize for revolutionizing their industries. No. What they did was this: They figured out that a happy customer is good for business, so they focused on that. They earned your trust, your respect and your loyalty. Want to know how they did that? By giving you theirs.

Let me let you in on a little secret: An asshole doesn’t think that way. An asshole doesn’t think about happy customers. He doesn’t care about happy customers. An asshole only thinks about himself: His own mood, his own frustrations, his own personal dramas, his own power trips. An asshole doesn’t give anyone their trust, respect or loyalty. Assholes just don’t think that way. And that is precisely the rub: No matter how well you pay them, you can’t make assholes give a shit. And that is bad for business. Very bad.

A fork in the road for every organization:

Do you know one way to make sure your customers are always happy? Only hire people who want your customers to be happy too. People who want to be helpful, who want to fix problems, who take pride in making someone’s day better instead of worse. People who genuinely want to see the company do well. People with pride and self respect and ambition beyond their own bank account or advancement. Do you think this is too hard? It isn’t. Just hire better.

Want to guess how to guarantee that your customers will not be happy? Hire assholes to take care of them. (It works every time.)

That’s your choice: Door A or Door B.

Door A: Hire super nice, helpful people and your business will soar.

Door B: Hire assholes, and your business will forever struggle to stay afloat.

Every time you run into one of your employees (or candidates) and he or she acts like an asshole, I want you to think about that. I want you to think about how much harder you want to have to work to make your business successful once they start pissing off every customer and client they come in contact with.

Taking a step back so you can see your entire business now, how many assholes do you really want on your payroll, and how many customers do you want to put them in front of? Pull out a piece of paper and write down a number. Do it. Write it down. How many assholes do you want on your payroll?

Next to that number, write down how many assholes you have on your payroll now. Go through your mental org chart, and start counting them in your head. When you’re done, write down how many assholes you know are in your company right now. If that number is higher than the first number you wrote down, you have some cleaning up to do.

In closing, let me leave you with the top 5 ways to make sure that your company starts becoming asshole-proof.

Top 5 ways of asshole-proofing your company:

1. Don’t hire assholes. They are bad for business, and they breed inside organizations like weeds.

2. Don’t promote assholes. The only thing worse than an asshole is an asshole with authority (including the authority to hire and promote assholes when you aren’t paying attention).

3. Give your current assholes the “opportunity” to go work for your fiercest competitor. Do this immediately. Make sure the door doesn’t hit them in the ass on their way out.

4. Once removed, replace your former assholes with nice, smart friendly people. (They’re out there and they want to work for you, but your assholes probably already turned them down. Go find them and invite them back.)

5. Reward all of your employees for NOT being assholes.

That just about takes care of it for today. Any questions?

Inspired (in a good way) by conversations with Julien Smith, Geoff Livingston, Keith BurtisChris Brogan, Kristi Colvin, Tyler Durden, Jeffrey Jacobs, Peter Shankman, among others.

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And in case you haven’t picked one up yet (or your favorite client seems to be having trouble figuring out how to bring social media into their organization), you can pick up a fresh copy of Social Media ROI at fine book stores everywhere. If you have sworn off paper, you can also download it for iPad, Kindle, Nook or other e-formats at www.smroi.net.

Tip: Leave it sitting conspicuously on your desk when your boss does his rounds. It seems to be a good conversation starter.

(Click here for details, or to sample a free chapter.)

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This week, I had the pleasure of being interviewed on #mmchat (episode 68). We talked about social media (social business) integration, which is a pretty crucial topic. Pushing content through social media channels and setting up monitoring practices is the easy part. Making it all work and flow across an organization is where the real difficulties arise.

For almost every company adopting social media, the biggest challenge is not a lack of great ideas or social media expertise, but rather a lack of change management planning and execution. (Theory, presentations and case studies are great, but making someone else’s stories actually work for a business, that’s where the rubber really meets the road – or doesn’t, for the most part.)

Here were the questions:

Q1: So our topic tonight is on Social Media Alignment in organizations, can you describe your view on what this means?

Q2: [In reference to social media] what are some of the negative consequences experienced by organizations that are not aligned?

Q3: How should organizations begin when it comes to aligning their social media efforts with the rest of the business? Who should lead this initiative and how?

Q4: Are there specific steps required to align social networking within organizations?

Q5: Once alignment is achieved, can it be easily scaled or are there suggestions you can male to facilitate this process?

Q6: Are there different challenges & solutions for trying to align around the world in global organizations?

Q7: How does a company know when they have succeeded in the alignment quest? What are some of the major signs and benefits?

Because of the short amount of time allotted to the chat and the limited 140-character format, my answers and ensuing discussion don’t get super in-depth, but that comes with an advantage: They are VERY accessible. Even if you are still unsure how to effectively plug social media into a company so it doesn’t end up being just a marketing add-on, you will understand the fundamental principles covered here.

To access the chat’s full transcript, click here.

For a far more in-depth look into how to actually plug social media into a business (large or small), grab yourself a copy of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization (Que/Pearson).

It isn’t a “social media” book. It is a management book that focuses on social media for business. Big difference. If you aren’t sure that it is for you, download a free chapter here, then make up your mind.

Very special thanks to @thesocialcmo and @karimacatherine for hosting the #chat.

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If you are still having trouble explaining or understanding the intricacies of social media R.O.I., chances are that…

1. You are asking the wrong question.

Do you want to know what one of the worst questions dealing with the digital world is right now? This:

What is the ROI of Social Media?

I know. Coming from me, the guy who literally wrote the book on “Social Media R.O.I.” this might seem like a strange thing to say. But hear me out. It will all make sense in a few minutes.

It isn’t that the idea behind the question is wrong. It comes from the right place. It aims to answer 2 basic business questions: Why should I invest in this, (or rather, why should I invest in this rather than the other thing?), and what kind of financial benefit can I expect from it?

The problem is that the question can’t be answered as asked: Social media in and of itself has no cookie-cutter ROI. The social space is an amalgam of channels, platforms and activities that can produce a broad range of returns (and often none at all). When you ask “what is the social media or ROI,” do you mean to have Facebook’s profit margins figure in the answer? Twitter’s? Youtube’s? Every affiliate marketing blog’s ROI thrown in as well?

The question is too broad. Too general. It is like asking what the ROI of email is. Or the ROI of digital marketing. What is the ROI of social media? I don’t know… what is the ROI of television?

You’ve been asking the wrong question.

2. To get the right answer, ask the right question.

The question, then, is not what is the ROI of social media, but rather what is the ROI of [insert activity here] in social media?

To ask the question properly, you have to also define the timeframe. Here’s an example:

What was the ROI of [insert activity here] in social media for Q3 2011?

That is a legitimate ROI question that relates to social media. Here are a few more:

What was the ROI of shifting 20% of our customer service resources from a traditional call center to twitter this past year?

What was the ROI of shifting 40% of our digital budget from traditional web to social media in 2011?

What was the ROI of our social media-driven raspberry gum awareness campaign in Q1?

These are proper ROI questions.

3. The unfortunate effect of asking the question incorrectly.

What is the ROI of social media? asks nothing and everything at once. It begs a response in the interrogative: Just how do you mean? In instances where either educational gaps or a lack of discipline prevail, the vagueness of the question leads to an interpretation of the term R.O.I., which has already led many a social media “expert” down a shady path of improvisation.

This is how ROI went from being a simple financial calculation of investment vs. gain from investment to becoming any number of made-up equations mixing unrelated metrics into a mess of nonsense like this:

Social media ROI = [(tweets – followers) ÷ (comments x average monthly posts)] ÷ (Facebook shares x facebook likes) ÷ (mentions x channels used) x engagement

Huh?!

Equations like this are everywhere. Companies large and small have paid good money for the privilege of glimpsing them. Unfortunately, they are complete and utter bullshit. They measure nothing. Their aim is to confuse and extract legal tender from unsuspecting clients, nothing more. Don’t fall for it.

4. Pay attention and all the social media R.O.I. BS you have heard until now will evaporate in the next 90 seconds.

In case you missed it earlier, don’t think of ROI as being medium-specific. Think of it as activity-specific.

Are you using social media to increase sales of your latest product? Then measure the ROI of that. How much are you spending on that activity? What KPIs apply to the outcomes being driven by that activity? What is the ratio of cost to gain for that activity? This, you can measure. Stop here. Take it all in. Grab a pencil and a sheet of paper and work it out.

Once you grasp this, try something bigger. If you want to measure the ROI of specific activities across all media, do that. If you would rather focus only on your social media activity, go for it. It doesn’t really matter where you measure your cost to gain equation. Email, TV, print, mobile, social… it’s all the same. ROI is media-agnostic. Once you realize that your measurement should focus on the relationship between the activity and the outcome(s), the medium becomes a detail. ROI is ROI, regardless of the channel or the technology or the platform.

That’s the basic principle. To scale that model and determine the ROI of the sum of an organization’s social media activities, take your ROI calculations for each desired outcome, each campaign driving these outcomes, and each particular type of activity within their scope, then add them all up. Can measuring all of that be complex? You bet. Does it require a lot of work? Yes. It’s up to you to figure out if it is worth the time and resources.

If you have limited resources, you may decide to calculate the ROI of certain activities and not others. You’re the boss. But if you want to get a glimpse of what the process looks like, that’s it in its most basic form.

5. R.O.I. isn’t an afterthought.

Guess what: Acquiring Twitter followers and Facebook likes won’t drive a whole lot of anything unless you have a plan. In other words, if your social media activity doesn’t deliberately drive ROI, it probably won’t accidentally result in any.

This is pretty key. Don’t just measure a bunch of crap after the fact to see if any metrics jumped during the last measurement period. Think about what you will want to measure ahead of time, what metrics you will be looking to influence. Think more along the lines of business-relevant metrics than social media metrics like “likes” and “follows,” which don’t really tell you a whole lot.

6. R.O.I. isn’t always relevant.

Repeat after me: Not all social media activity needs to drive ROI.

Technical support, accounts receivable, digital reputation management, digital crisis management, R&D, customer service… These types of functions are not always tied directly to financial KPIs. Don’t force them into that box.

This is an important point because it reveals something about the nature of the operational integration of social media within organizations: Social media isn’t simply a “community management” function or a “content” play. Its value to an organization isn’t measured primarily in the obvious and overplayed likes, followers, retweets and clickthroughs, or even in impressions or estimated media value. Social media’s value to an organization, whether translated into financial terms (ROI) or not, is determined by its ability to influence specific outcomes. This could be anything from the acquisition of new transacting customers to an increase in positive recommendations, from an increase in buy rate for product x to a positive shift in sentiment for product y, or from a boost in customer satisfaction after a contact with a CSR to the attenuation of a PR crisis.

In other words, for an organization, the value of social media depends on two factors:

1. The manner in which social media can be used to pursue a specific business objective.

2. The degree to which specific social media activity helped drive that objective.

In instances where financial investment and financial gain are relevant KPIs, this can turn into ROI. In instances where financial gain is not a relevant outcome, ROI might not matter one bit.

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By the way, Social Media ROI – the book – doesn’t just talk about measurement and KPIs. It provides a simple framework with which businesses of all sizes can develop, build and manage social media programs in partnership with digital agencies or all on their own. Check it out at www.smroi.net, or look for it at fine bookstores everywhere.

Click here to read a free chapter.

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