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March 26, 2017

Social Star Wars Saga Episode I: The Phantom Menace

By michaelpace on November 7, 2011

Pre-prequel: With the recent release of the Star Wars saga on Blu-ray, I feel compelled to finally put together my official Social Star Wars Blog Saga. Enjoy all you fantastic nerds.

As I mentioned in my last video post, one of the most popular questions asked of me by customer service leaders and people interested in social business is “What’s the ROI (Return on Investment) you are seeing with social media for customer service?” I love that question.  Folks seem to need to know that answer to move from social paralysis to engagement.

When asked here’s my first reply, ”Have you figured out the ROI of your bathroom?” (not sure where I got that from, but would love to give credit one day).  I reply with that rhetorical response for two reasons

1.) it breaks their conditioning and makes them stop

2.) the answer to that question is the same as the previous

I will usually ask them if they know the ROI of their broader Customer Service Department; which again usually provides the same answer.  It is really no different than if your customers were calling you and you didn’t pick up the phone, except they are also telling everyone who follows their messages.  It is becoming a business necessity.  The primary goal of customer service is customer retention, avoiding their contacts will not serve your retention goals.  As for actionable advice I give to customer service leaders, I provide two thoughts.

Focus on ROO (Return on Objectives) not ROI

Social business practices are still in their infancy, focus should be balanced between broader business goals, your learning agenda and metrics.  I like the way Jason Falls explains it in his new book No Bullshit Social Media.  Look at how social media helps your broader business goals:

  • Enhance branding and awareness
  • Protect brand reputation
  • Enhance public relations
  • Build community
  • Enhance customer service (VOC and general service)
  • Facilitate research and development
  • Drive leads and sales

Your learning agenda should include:

  • How to scale this operation
  • Cross department interactions
  • What kind of people are right for this role
  • What is needed from a content management standpoint
  • What infrastructure is needed to support

If social media is about Engagement, measure Customer Lifetime Value

I am sure there are lots of ways to measure CLV, here’s how I do:

Acquisition: What was the cost of acquisition? Is this customer referring others?

Retention: You need to have them as a customer gain value (duh)

Average Spend/Time period: How much and often do they spend money with your business

Profitability: Is this customer costing you too much to keep or are they efficient for your business (uses self service and community platforms for service)

I understand many business leaders want to understand how much allocating resources to social customer service will cost them and what will they get in return.  If you need to create a business case, I would use all of the above information (both soft and hard numbers) to make your case.  But the best way you can make the case is find out what your customers are saying to and about you and tell the story of why you need to play here.

May the force be with you, always.

Episode II: Attack of the Clones

Episode III: Revenge of the Sith

Star Wars Crawl Creator

Phantom Menace - Social Star Wars


About mpace101


  1. 8 Comments

    Thanks for all of the information Michael.

    One of the challenges I currently face is the ROI challenge as it pertains to social media. I am in the process of putting together a presentation in which I am trying to sell a new PR position that will deal with a number of Social Media platforms. The challenge of this is that it has to be explained to a generation that does not understand anything having to do with Social Media. My boss barely knows how to text, let alone Tweet! I will definitely use many of your points to help my argument!

    Thanks again.




      One of the things Senior & Exec level folks relate to is stories. If you are able to show what your customers are saying about your company online, show this information and how people it reaches, it can be a very powerful story. Also, Senior folks sometimes understand SEO and findability. The more tagged and aligned content hits the web with your company tied to it, the higher you should consistently rank in search.

      If there is any you ever want to go over, please let me know. My LinkedIn profile is here

  2. 8 Comments

    Good points. Many SMBs are sophisticated enough to measure ROI of most of their operations. I tend to ask them what the ROI is of their business card or the cell phone. In this case the “where’s the ROI of social media?” question is short hand for “I don’t understand why anyone would waste their time talking to Lady Gaga on twitter”. In this case you don’t have an ROI problem you have social media education problem.

    For enterprises that DO have ROI models that they use, the metrics used to measure social media should be consistent with the level of maturity of the efforts. If you’re just getting started with social media, simple audience metrics may be sufficient for the first 6 months. The appropriate metrics for the next 6 months could be focused on engagement and metrics for the following 12 months could be focused on lead gen and conversion. The metrics should be tied to the goals be it support or sales.

    Oh, and what’s the ROI of losing customers to competitors who move more readily to new business channels?

  3. 8 Comments

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