There a lot of conversations (cf the viral garden and My 2 cents) going on about the ROI of conversational marketing. Even if almost everybody agrees with the fact that conversational marketing requires an appropriate metric, there are very few concrete proposals. This inspires me a few thoughts:
– We are very demanding about our media: besides watching the evolution of your sales figures or setting up an ad hoc impact study, there are no means to evaluate any kind of above the line campaign. How would you calculate the ROI of a sponsoring action? How would you evaluate the return of giving away expensive goodies to your business partners?
– Conversational marketing shouldn’t be per se considered as advertising budget: It’s symptomatic to see the definition of advertising on wikipedia “Advertising is paid and/or sometimes free communication through a medium in which the sponsor is identified and the message is controlled”. This definition doesn’t really apply for the conversation. Couldn’t we regard conversational marketing as market intelligence and customer service?
– Let’s assume, we need to prove a direct return anyway: I would then use the Net Promoter Score (NPS) that gained a lot of popularity the last years. Even if it doesn’t measure the impact of conversation, this metric is full of learnings for the believers in conversational marketing. In an interview to CEO forum, Fred Reichheld (Bain & Company) stated about the NPS:
(The NPS) means customer feedback measures are used to drive internal priorities just as much as traditional profit and accounting measures. That’s a major change: in information systems, in the culture and behaviours of the company, and in the skills and training front-line employees need. It also has some very strategic implications, for example in how you segment your customer base and how you invest in serving those segments. It changes the whole rhythm of your business
In another interview, Fred Reichheld gives an example of the impact on a company profits:
high scores are a strong predictor of economic success. HomeBanc, a mortgage company in Atlanta, has a whopping NPS score of 84 percent. As might be expected from this score, HomeBanc’s productivity levels average 60 percent higher than industry standards. The firm’s growth exceeded 25% each year for the past decade – more than doubling the industry rate
This makes me believe that instead of trying to measure a direct return on the conversation, we should focus on proving that sound conversational marketing has an impact on customer satisfaction and that customer satisfaction impacts companies profits.