There sure is lots of buzz these days about how to measure Twitter. One recent question submitted was typical… “How do we measure the value of the tweets we’re producing every day?”
Wrong question.
The right question is “SHOULD we measure the value of the tweets we’re producing every day?”
For the vast majority of companies out there, I think not.
It seems to me that Twitter is a productivity tool. You use it to efficiently communicate messages to people who have indicated a desire to hear them. In doing so, you also benefit from their willingness to re-tweet along to others they may know with similar interests.
As such, the inherent value proposition of Twitter is to REPLACE higher cost avenues of reaching interested parties with LOWER cost avenues. Consequently, the financial value of using Twitter for business is the cost savings of reaching the same people more efficiently and/or the now-affordable opportunity of communicating deeper into the universe of current and prospective customers. All of which is, to a reasonable degree, measurable.
So why am I skeptical about measuring tweets?
First off, there are no platform costs for tweeting. No software to buy. No hardware to install. Just use any web-enabled keyboard and you’re off. Everything you need to get started is free. If you’re not adding staff, and/or you’re not keeping staff to tweet when they would otherwise be expendable, then you have NO incremental cost. If this is your situation (and for most of you I suspect it is), then why bother measuring something that comes at no cost? Save your marketing measurement energy (and that of your management team) for bigger, more expensive issues with more meaningful marketing metrics.
But if you add or divert headcount (staff or contractor) to tweeting in a way that adds to cost, you should be prepared to forecast and measure the impact.
Your Twitter business case for adding additional headcount (aka “Chief Tweeting Officer”) is based on the premise that more/better tweeting will drive measurable impact on the business in some way. So you would compare the incremental headcount cost of the tweeters with the expected incremental impact on the business in terms of:
A) Incremental customer acquisition;
B) Incremental customer retention ;
C) Incremental share-of-customer;
D) Incremental margin per customer or transaction;
E) Improvements in staff or channel partner performance;
F) Accelerated transactional value; or
G) Early indication of problems and the resulting benefit of acting quickly to fix them.
Each of these could be determined through a series of inexpensive experiments intended to prove/disprove the hypothesis that tweeting will somehow result in economically attractive behavior. Some might happen as a direct result of the tweeting. Others may be indirect results in association with combinations of additional marketing tactics (e.g. paid search or display advertising). Define your hypotheses clearly and succinctly, then monitor tweet consumption…
Anyone rolling their eyes yet?
Bottom line is that tweeting, like all social media activities, are engagement tools. We use them to try to engage current/prospective customers in further dialogue of investigation of the solutions we can offer them. So from a measurement perspective, that suggests we focus on what specific types of behavioral engagement we are trying to drive, and what economic impacts we anticipate as a result. Measure changes in those two elements and you’re well on your way to success.
There are always ways to measure marketing effectiveness. Everything in marketing can be measured. But the first and most important question to ask is “what would I do differently if I knew the answer to the question I’m asking?” Only then can you decide how to PRAGMATICALLY balance measurement with action.
My friend Scott Deaver, EVP at Avis car rental is fond of saying “don’t bother if you can’t weigh it on a truck scale.” I think that applies very often to twittering away time measuring Twitter.
_________________________
Pat LaPointe is Managing Partner at MarketingNPV – specialty advisors on measuring payback on marketing investments, and publishers of MarketingNPV Journal available online free at www.MarketingNPV.com.
Tuesday, June 22, 2010
Tuesday, June 08, 2010
How to Get the Budget You Need
As 2011 planning season approaches, here are a few things you can do to increase the probability that you’ll get the resources you need for marketing to help drive the business goals. Before you go in with your request, work your way down this checklist:
1. Ensure that you are aligned to the proper goals and objectives.
Your recommendations need to be linked back to specific ways they will help achieve company goals – revenue, profit, customer value, market share, etc. The more specifically you can demonstrate these links, the more likely your recommendations will be taken seriously. Don’t focus on the intermediary steps like awareness or brand preference. Keep the emphasis on the business outcomes you intend to influence.
2. Make sure you’ve squeezed every drop from the current spend patterns.
These days, zero-based budgeting is price-of-entry. Before you can ask for more, you need to show how you have “de-funded” things you previously did that either A) didn’t work; B) weren’t aligned to evolving company goals; or C) seem less important now than other initiatives. By offering up some of your own cuts to partially fund your recommendations, you demonstrate a strong sense of managing a portfolio of investments, and a willingness to make hard choices with company money.
3. Have a plan for how you will prioritize the new marketing funds strategically, not just tactically.
If you get another $1, where will you put it? Before you answer in terms describing programs or tactics, think about segments, geographies, channels, product groups, etc. Knowing where the best strategic leverage points are is far more important than tactical mix. You can always evolve the mix of tactics. But the best tactics applied against the wrong strategic needs won’t produce any results.
4. Identify the points of leverage you can exploit.
Results accrue when you place resources behind places of competitive leverage. Knowing where your leverage points are helps ensure you are spending where it will produce noticeable outcomes. Common leverage points are relative value proposition strength, channel dominance, message effectiveness, and customer switchability. There are others too. But spending without leverage is just playing into the hands of the competitive environment. Without leverage, you have no reasonable expectation of changing anything.
5. Demonstrate an understanding of how the business environment has changed.
Even if you have clear leverage opportunities, the business environment is powerful enough to neutralize just about any unilateral effort a given company might make. Sudden swings in the macro-economic spectrum or the regulatory environment could have you spending into an impenetrable headwind and dramatically reduce the expected impact of your investments. Identify the issues that could create the strongest headwind (or tailwind) for you - interest rates, employment rates, housing starts, currency fluxuations – and prepare an assessment of how they might impact your proposed results.
6. Proactively assess the risk of your plans.
As marketers, we plan like matadors, but have the track record of the bull. We spend so much time conceptualizing our plans, but comparatively little imagining what might go wrong. Which is unfortunate, given that something almost always does go wrong. So run your plan by your company’s “Debbie downer” – the skeptical one who always sees the worst in everything. Let her tell you what might derail your plans, and then develop a plan to manage your risks accordingly. Being proactive about identifying and managing risks demonstrates your ability to dispassionately assess options and pursue realistic opportunities for success with your eyes wide open.
7. Propose “good” benchmarks and targets for your intended outcomes.
Every recommendation should come with expected performance outcomes. Even if you present a range of possible results, you’ll need something to demonstrate the baseline of performance you are starting from, and the yardstick by which you will measure success. This creates the perception of accountability, which appeals to the deeply human desire to trust in someone else where our own personal expertise leaves off.
These 7 pre-test elements will prepare you for every question that might arise in connection with your proposals. And while competing investments might ultimately attract the resources you were fighting for, this process ensures your reputation as a capable manager will grow even if your budget doesn’t.
1. Ensure that you are aligned to the proper goals and objectives.
Your recommendations need to be linked back to specific ways they will help achieve company goals – revenue, profit, customer value, market share, etc. The more specifically you can demonstrate these links, the more likely your recommendations will be taken seriously. Don’t focus on the intermediary steps like awareness or brand preference. Keep the emphasis on the business outcomes you intend to influence.
2. Make sure you’ve squeezed every drop from the current spend patterns.
These days, zero-based budgeting is price-of-entry. Before you can ask for more, you need to show how you have “de-funded” things you previously did that either A) didn’t work; B) weren’t aligned to evolving company goals; or C) seem less important now than other initiatives. By offering up some of your own cuts to partially fund your recommendations, you demonstrate a strong sense of managing a portfolio of investments, and a willingness to make hard choices with company money.
3. Have a plan for how you will prioritize the new marketing funds strategically, not just tactically.
If you get another $1, where will you put it? Before you answer in terms describing programs or tactics, think about segments, geographies, channels, product groups, etc. Knowing where the best strategic leverage points are is far more important than tactical mix. You can always evolve the mix of tactics. But the best tactics applied against the wrong strategic needs won’t produce any results.
4. Identify the points of leverage you can exploit.
Results accrue when you place resources behind places of competitive leverage. Knowing where your leverage points are helps ensure you are spending where it will produce noticeable outcomes. Common leverage points are relative value proposition strength, channel dominance, message effectiveness, and customer switchability. There are others too. But spending without leverage is just playing into the hands of the competitive environment. Without leverage, you have no reasonable expectation of changing anything.
5. Demonstrate an understanding of how the business environment has changed.
Even if you have clear leverage opportunities, the business environment is powerful enough to neutralize just about any unilateral effort a given company might make. Sudden swings in the macro-economic spectrum or the regulatory environment could have you spending into an impenetrable headwind and dramatically reduce the expected impact of your investments. Identify the issues that could create the strongest headwind (or tailwind) for you - interest rates, employment rates, housing starts, currency fluxuations – and prepare an assessment of how they might impact your proposed results.
6. Proactively assess the risk of your plans.
As marketers, we plan like matadors, but have the track record of the bull. We spend so much time conceptualizing our plans, but comparatively little imagining what might go wrong. Which is unfortunate, given that something almost always does go wrong. So run your plan by your company’s “Debbie downer” – the skeptical one who always sees the worst in everything. Let her tell you what might derail your plans, and then develop a plan to manage your risks accordingly. Being proactive about identifying and managing risks demonstrates your ability to dispassionately assess options and pursue realistic opportunities for success with your eyes wide open.
7. Propose “good” benchmarks and targets for your intended outcomes.
Every recommendation should come with expected performance outcomes. Even if you present a range of possible results, you’ll need something to demonstrate the baseline of performance you are starting from, and the yardstick by which you will measure success. This creates the perception of accountability, which appeals to the deeply human desire to trust in someone else where our own personal expertise leaves off.
These 7 pre-test elements will prepare you for every question that might arise in connection with your proposals. And while competing investments might ultimately attract the resources you were fighting for, this process ensures your reputation as a capable manager will grow even if your budget doesn’t.
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