This post is part of the Social ROI Blog Carnival at Think Customers: the 1to1 Media blog. Visit the blog carnival post at the link above to check out the full list of posts from numerous well-known social media thought leaders.

There are many ways to measure the success of social media at an organization. Some of these metrics are often focused only on tactical results (ex: number of followers or fans). Other metrics tie directly back to the bottom line (ex: value of sales coming directly from Twitter). On occasion, we see true ROI calculated from social media initiatives.

Most companies, however, view social media ROI in the same way they view the legendary pot of gold. They believe that it is there, and they keep looking for it even though it eludes them. Finding ROI in your social media initiatives doesn’t have to be imaginary. As we move into 2012, I fully believe this will be the year that executives begin asking the difficult questions to their social media teams, including what kind of returns they are getting on their social media investment. In order to answer this question, one must consider the true cost of managing a social media program.

What are the costs?

In order to consider calculating ROI, one must understand the costs involved with social media. Some of these are fairly clear, including cost of the platforms (such as community software or social media monitoring tools), cost of social media consultants or agencies (to help create strategy or execute campaigns), advertising spend (yes, you probably need to spend money advertising your social media efforts), and cost of personnel involved in social media (community manager, customer service social response team). Other costs are not quite as obvious. These include the opportunity cost of personnel that may be involved with social media in some aspect (ex: an executive spending time writing a monthly blog post is not spending time doing other things), the cost of training employees in social media (even those that are not executing social media should be trained on it), and the cost of social media influencer programs. I encourage you to understand these costs for both social media campaigns as well as your overall social media program so ROI can be calculated on both.

Measuring the gains

There is more than one way to measure the gains from social media. The first area that usually comes to mind is revenues; this is often a bit difficult to determine from social media, much as it can be difficult to determine from other marketing programs. However, the fact that social media is a web-based activity gives companies (especially those in the Business to Consumer space) the opportunity to measure actual product purchases coming from social media. Dell is one of the most commonly cited examples of this from their Twitter Dell Outlet account. Sanuk is another example. Per social media manager Rachel Gross (shared in an interview I did with her for my book, p. 44-46), even though Sanuk doesn’t often post direct links to their website from their corporate Facebook page, they are able to track conversion rates. They do this by looking at how many visits to their website (via Facebook) result in a sale, thus measuring their return on using social media as an engagement tool.

The other side of the coin from revenue is cost savings. One of the largest areas where companies can find significant returns on their social media investment is in customer service and the use of online branded communities. Most brands that host a peer-to-peer support community find that they are able to directly measure the number of calls deflected as a result of the answers provided by community members to each other; this occurs for both B2C as well as B2B businesses. Companies such as Best Buy and Verizon (where I was most recently actively engaged in this as the community program manager) see these gains and are able to use them to calculate an ROI on their communities. While we are on the subject of online communities, there are other benefits that can factor into the ROI equation. For example, Verizon’s residential community also has an Idea Exchange, where customers have the opportunity to help Verizon improve their products and services, as well as innovate around new products. The returns for such a community can include additional sales from new products as well as improved uptake of existing products with current customers due to improvements made via the idea site.

Finding the Pot of Gold

While you may not find the elusive “pot of gold” in your social media programs right away, more than likely you will see both direct and indirect benefits by engaging with customers and prospects via social media. Hopefully this post has helped you get past thinking only about the numbers of followers and fan your sites have. Read some of the other posts in the Social ROI Blog Carnival to learn how you can better answer your executives when they ask you what your company is getting out of social media, and let me know what your key takeaway is from the carnival.

(Photo credit: DNY59)

How can this be effectively done? Let’s take a cue from local government. No, really.

Tweet the Mayor

One of the most interesting stories about local government and social media is that of Newark, NJ mayor Cory Booker. He has become one of the best examples of how to use social media to build relationships with people, in his case, the people of Newark. Last winter, when much of the East Coast was buried in snow from one of the largest storms in decades, Newark’s citizens reached out for help – via social media. And Mayor Booker and his team were listening via Twitter and went into action. Take a brief look at the segment I did on this for NBC San Diego, then come on back after the video:

View more of Becky Carroll’s videos at: http://nbcsandiego.com.

• Citizens told Mayor Booker where streets were still snowed-in, and he sent trucks out to plow and went himself to help them.
• Mayor Booker shoveled snow for the elderly.
• He helped push stuck cars out of the snow.
• He delivered supplies to needy residents (including diapers!)
• He directed salt trucks to icy roads.

As anyone in social media knows, not everyone is your friend online. When one constituent bad-mouthed Mayor Booker on Twitter, Cory showed up at his door and helped him shovel out.

A Whole New Era of Politics

This is so different from how citizens interacted with government in the past, when people tried calling, emailing, letters, and even going into the politician’s office, often without much response. Social media, by contrast, provides not only the opportunity for an instant response but also for a personal response.

Mayor Booker has continued to reach out via social media and has recently launched a new program, using Twitter and Facebook, to encourage Newark citizens to become more fit in 2012. Called the Cory Booker Challenge, it encourages Newark residents to share their resolutions online via a social game to help them in their efforts to become more physically fit. The site allows participants to track their progress by checking into activities, uses a leader board to encourage healthy competition, and even has prizes. (Hat tip to The Next Web for highlighting this program.)

Making a Difference in 2012

In this election year, it will be fascinating to see whether other politicians follow Mayor Booker’s lead in becoming more personal with their constituents via social media. Not to have solely an aide or agency respond but to truly build authentic relationships through personal involvement. I challenge businesses to do this as well.

Make 2012 the year you use social media to build relationships with your customers. You’ll be glad you did. Share your efforts to do so here so we can celebrate with you!

(Photo credit: hh5800)

I have been on the road A LOT these past few months since my book launched, so I have had the opportunity to stay in many different hotels across the country (and at a variety of hotel brands). I thought it would be fun to post photos of some of the bathrooms I encountered during my travels (mostly in my hotel room). Which bathrooms do you think belong to which brands? The following are some of the brands where I stayed: Marriott, Westin, Ritz-Carlton, and a boutique hotel, Paramount Hotel in New York City. (Answers are at the end of the post.) Do they say would you would have expected about that brand?

Be sure to check out the list of all the participating bloggers, also at the end of the post. A big shout-out to CB Whittemore for leading the charge again this year!

Bathroom 1

  Bathroom 2

  Bathroom 3

  Bathroom 4

Here are the list of Bathroom Blogfest bloggers (answers afterwards):

Answers: Westin, Marriott, Paramount, Ritz-Carlton – how’d you do?

What do you do at your organization? Do you reach out to influencers in an effort to get them to share about your brand? Do you work with your brand advocates to help energize their natural passion for your brand? What is working for you?

Today’s post is written by a guest blogger, Harry Rollason. Harry is with Useful Social Media, and I will be presenting at their New York Conference on Social Media and Customer Service next week. Plus, Harry interviewed me about my book, The Hidden Power of Your Customers: Four Keys to Growing Your Business Through Existing Customers. Here is some food for thought from Harry.

The rise of social media has changed customer service beyond recognition.

In today’s competitive landscape, customer service is more important than ever. A company’s reputation for satisfying their customers has never been so valuable.

It’s worth pointing out that it takes three times as much internal resources to acquire a new customer as it does to retain one. In these lean times it puts an awful lot of pressure on companies to ensure retention rates are as high as possible. And good customer service is a great tool to do this.

But are companies getting it? Does it look like big corporates are responding to this change in the landscape?

The short answer is no:

• Over 58% of tweeters who have tweeted about a bad experience have never received a response from the offending company
• 55% of consumers expect a response the same day to an online complaint – yet only 29% receive one
• 43% of consumers say that companies should use social media to solve customers’ problems

These statistics lay out clearly how the game has changed. Customers will no longer be happy with ‘old style’ customer service. To satisfy your customers, it’s essential to have a responsive social media presence.

To be fair, things are changing. By the end of the year, 75% of US-based companies expect to use social media for customer service. It’s a reaction to the changing game. Gone are the days when social media was all about marketing through Twitter and Facebook. It’s now an integral tool to ensure you are responsive not reactive, contactable not aloof and authentic not robotic. And increasingly, it’s about solving customer’s issues in real time through social channels, showing your dedication and transparency to your customers.

I ramble I know, as I have a tendency of doing, but there is a reason for my rant. On my return back to the office last week – having recently returned from #CSMSF and #CSMNY – I stumbled across some great examples of companies embracing the power of social media for customer service and I thought I would share them with you. It looks like companies are trying to solve this problem, but aren’t quite there yet. So maybe I can help.

We’ve got some free presentations from Gina Debogovich, Director and Social Media Leader from BestBuy – on how BestBuy have rolled out Twelpforce and made it company policy. And Baochi Nguyen, PR and Social Media Manager from Boingo on the best ways to create a customer service centric policy at your company – all interesting stuff!

You can grab a copy of both presentations by heading here.

Or if you would rather talk than read – then connect with me at @HRollasonUSM or drop some feedback in the comments below!

I recently exchanged Facebook messages with Deb Robison, a smart marketing and social media gal. She wanted to share a customer service story with me and get my take on it.  Here is her story:

I got a new computer recently and needed to order some accessories. Around this same time, I needed some shoes and books. I placed orders with Zappos, Amazon, Apple, and a designer’s shop, Jonathan Adler. Of course, the three big guys sent me order acknowledgment and tracking info all through the process. I got an order notification from (ordered a laptop sleeve) Jonathan Adler, then nothing, so a few days after I placed the order, I sent an email asking if my order had shipped. Later the next day I got an email from a customer service rep explaining that they did receive my order and that “my colleague is trying to find your bag at one of their stores.” Once it ships, I would get a shipping notification. That was two days ago. And, I noticed they have already charged my credit card.

So my question is this – are my customer service expectations skewed because I have dealt with some big companies that have solid customer service and shipping systems in place? (Note: Zappos had the best and most prompt services of the three big companies, of course.) Jonathan Adler is a smaller brand, but a high-end one and kind of trendy right now, so is it fair for me to set the same expectations on them?

My expectations have clearly been shaped by the immediacy which other retailers respond & deliver. Is that fair? As customers, we never had this kind of relationship before. We used to get out the catalog, fill out the form, put a check in the envelope and wait.

Yes, Deb, customer expectations are absolutely set based on our experiences with companies such as Zappos and Amazon. In fact, every interaction we have with a company sets our expectation for the next interaction, whether with that business or with another completely different organization. Additionally, the online experiences that customers have with companies, whether on the company website or via social media, are creating a higher degree of visibility. In social media, this becomes even more important as the social customer’s friends and followers are also watching, and sometimes sharing the experience with their network (unfortunately, this is more often the case when the experience has been poor).

Customer Expectations of Service

It is important to understand the needs of your customers, as well as their wants and desires. It is also critical to understand what they expect when they contact your company. Typically, customer expectations of service tend to fall into three areas:

- Customers want fast service: They want their problems solved or questions answered quickly. “Help me get back to what I need to do.”

- Customers want friendly service: They want to feel that the company appreciates their business. “Help me know that you care about me.”

- Customers want it to be easy: They want to be able to accomplish the task in the most efficient way possible. “Help make this simple for me.”

The three areas listed above may change in priority based on who your customer is, what kind of relationship they have had with your organization, and, as mentioned by Deb, what types of interactions they have had with your company and with others. Do you know what your customers want from you?

Taking Action

What can you do tomorrow to improve the experience your customers are having with your company?

1. Ask your customers. Really – go ask them! Find out what they expect from you, what you are doing well, and what you need to improve. Your customers will probably be happy to tell you, and they will also be glad you asked.

2. Look in the mirror. When is the last time you or someone from your organization called into your customer service line? Ordered something from your website? Tried to get help via your social media channels? Find out what it feels like to be your customer; I encourage you to look for both areas of improvement as well as your own best practices to share with your organization.

3. Look at the competition – from your customer’s perspective. Understand who is competing with you for the best customer experience, keeping in mind that it may not be anyone within your industry.

A world-class customer experience doesn’t happen by accident. It takes a plan that can be executed across all aspects of your organization. Your customer experience strategy should facilitate consistent treatment of customers, cultivate customer trust, and enable meaningful interactions at all points of customer contact. Most importantly, it should meet and exceed customer expectations. Now you have a customer experience that will ignite passion, inspire brand loyalty, and cement relationships.

The Old College Try

“Do, or do not. There is no try” -@yoda

So, what happened?

1. It’s hard to speak with one voice – even if everything goes right, training your employees to understand the complexities of a situation and how to use common sense is difficult to train, so you’ve got to hire for attitude;
2. The customer decides if it was a good experience — customers don’t care why it went wrong, they just want you to fix it. Or explain very clearly why you can’t fix it and to offer a good alternative;
3. There might be good substitutes, but it’s hard to think of them sometimes - I could have called AAA Auto Club, but I didn’t realize that they would cover me while traveling in Canada. In this case heroic effort won the day.

The book is now available in bookstores everywhere, at major online retailers, as well as in eBook format. I would be eternally grateful if you would please leave a review on Amazon.com or on another online retail site as well as say a word or two about it on your blog or favorite social network. I will be featured on various blogs in the coming weeks, either as in interview or as part of a review of my book. Be sure to come over to the book’s Facebook page to keep up with the Book Buzz and see the interviews. Of course, you can also go to my book’s website right here on the Customers Rock! blog.

Here is the video interview that Lithium Technologies was kind enough to put together. Thank you, Lithium. You rock!

The Hidden Power of Your Customers – Interview with Author Becky Carroll from Lithium on Vimeo

Now, this happens all the time; that is the part of the formula for points-based loyalty programs. Keep customers coming back so they will continue to earn points and hopefully continue to spend money with the business.

The real pain in this case is the monthly emails that my friend receives from the airline. Each month, AirlineX sends an email showing how many frequent flier points he has (or at this point, doesn’t have). This is most likely intended to help the airline stay top-of-mind with the customer and gently encourage them to book their next flight with the airline. However, in this case, the monthly email only serves as a reminder that this particular customer doesn’t have any more points with AirlineX – and that hurts.

Customers are watching the actions of your company. Every email they receive, commercial they view, social media site they “like”, and direct mail piece they read (or not) affects their view of your business and their overall customer service experience. It may be something that seems small to your organization which pushes the customer out the door.

What do your marketing communications say about your company? Are they helping your customers to buy more from you? Or are they painful reminders of a damaged relationship, resulting in customer-killer service?

(Photo credit: marco)

This book has actually been a long time in the making – not so much from the perspective of how long it took to write it (see The Story below) but from the perspective that I have had this book in mind since before I began this blog in December of 2006. In fact, one of the reasons I started Customers Rock! blog was that I wanted to see 1) whether I enjoyed writing (I do) and 2) whether anyone else would enjoy reading what I wrote (you do!). So in a sense, this book has been over 4 years in the making!

This book is also one of the main reasons that I have been so quiet on my blog the past few months. I have definitely missed writing for all of you, and many of you have been encouraging me to get back out here and post. I am finally ready, and what better way to start back up than to introduce you to my book.

The Book

The Hidden Power of Your Customers is a book about how to focus on your current customers so that you can lengthen and strengthen your business relationship with them, thus bringing about increased customer loyalty, customer advocacy, and ultimately increased referrals. It is not a social media book (more on that in The Story below), but social media is woven throughout the book (as it should be woven throughout a company’s marketing and customer service strategies). It is also not a customer service book (but that is an important tenet). It is a book about growing your business through one of your company’s best assets – your existing customers.

Here is a short excerpt from the introduction:

It has been my experience that many companies spend most of their time and budget focusing on selling to new customers and end up neglecting their existing ones. This might work in the short term, but eventually these companies will find themselves losing more customers out the back door than they bring in through the front door. Additionally, the onset of social media is driving a major change in customer behaviors and habits, making it highly risky not to focus on existing customers. Social media has brought the customer experience to the forefront of discussions, so it is important for companies to be more vigilant than ever before.

As a result, some people will tell you that you need outstanding customer service. But customer service is not enough. You also need marketing that connects with your current customers. In fact, you need to consider the entire customer experience, and support it with a customer-centric culture, one that promotes an equally exceptional employee experience. And, of course, you do need outstanding customer service.

The Hidden Power of Your Customers is based around the principles of Customers Rock!, and the sections of the book follow the ROCK acronym:

R: Relevant marketing – Organizations need to market to their customers in a way that is relevant to them, including recognizing them as customers, using their language, and meeting their needs.

O: Orchestrated customer experience – Every place a customer interacts with a company needs to provide a consistent, planned experience for the customer that is beneficial to both parties. We can’t leave the customer experience to chance.

C: Customer-focused culture – We can’t just expect that a company will become customer-centric because it hires a few great customer service personnel or states that it cares about customers in its marketing. We need to ensure that customers are part of everything that our company does so that customer-focus becomes part of the company DNA.

K: Killer customer service – Companies need to take customer service to the next level, and it needs to be an integral part of the customer experience. Customer service is where the rubber meets the road, as many buying and renewal decisions are based upon this critical touch point. It has to ROCK.

The book is also supported with many case studies (based on personal interviews I conducted with company leaders), lots of practical tips, and fun personal stories – all written in the Customers Rock! style that you are familiar with here on this blog.

The Story

This past summer, at the end of my Marketing via New Media class which I teach at UC San Diego, my students were encouraging me to take what I know and write a book. I told them I had a book in mind already, I just hadn’t made any inquiries about it yet. I went home that evening and tweeted out that I was thinking about writing a book. Less than a week later, I received an email from an editor at John Wiley & Sons. In it, he said that he was interested in working with me on my book. He said he enjoyed this blog and felt that I had good material, and good credentials, to write a book. I actually had already written a book proposal the year before but hadn’t tried to do anything with it. I asked the Wiley editor whether this should be a social media book, and his recommendation was no, it should not be; he felt there were already quite a few of those out there (and I agree).

So, after giving Wiley’s offer some thought, I agreed and signed the contract. The book was off and running!

I then spent the next four months doing interviews, pulling together information, and writing the manuscript. It was completed on February 1 (I think I missed out on most of the family holiday activities this past season). Since then, I have been working with Wiley on a few rounds of edits, approving cover artwork, seeking “blurbs” (endorsements) for the book, and getting a top-notch thought leader to write the foreword (Thank You, Brian Solis – author of Engage! for being so gracious).

The book is now just about ready for prime time, so I felt it was high time to share about it with you all. The attendees of my recent session at SugarCon got a sneak preview of some of the concepts, and I will be giving more talks in the next few months before the release where I will have the opportunity to sign some pre-release booklets and get the word out about the book.

Will You Help Me Share About It?

I am thrilled that the book releases in just a few months (July 20), and I plan to continue blogging, speaking, and sharing about it on my social networks. Will you help me? Here are a few ways you can get involved in sharing the Customers Rock! philosophy that is in The Hidden Power of Your Customers:

• Share about the book on your own blog or social networks. Here is the link to the book on Amazon.
• Go to the Amazon page and click Like (right under my name, at the top of the listing)
• Pre-order the book
• If you are in San Diego, come to one of my Book Launch Parties (more info on these as it gets closer)
• If you are not in San Diego, you can help sponsor me for a Book Signing/Event in your city. I will gladly come to your city for a signing if you help arrange the event; please contact me for details.
• Submit to write a review of the book on your blog! I will be reaching out to bloggers for reviews to take place in early July; please leave me a comment or drop me a note at becky at petraconsultinggroup dot com if you are interested.

Again, thank you all for your support, encouragement, and loyalty over the past 4 1/2 years of this blog. Customers DO rock, and I can’t wait to show you more about that in the book.

Let me know what you think!