Defining Social Media Benefits Pt 2

Originally published 11/3/2010

Last week I posted about finding benefits for social media solutions.  To recap: for the most effective benefits you want to look for (in order) 1) opportunities to directly reduce costs, 2) opportunities to improve productivity, and 3) opportunities to increase revenue.  This week, I’m going to look at some of the obvious ways a social media solution might realistically be used to cut costs.  Keep in mind that not all these benefits I’m going to discuss may be relevant to your particular solution: your mileage may vary.

Perhaps the most obvious benefit provided by social networking is the ability to Reduce Customer Support Costs.  The use of member-supported forums is widespread in the technology industry, so this is not a new or Earth-shattering idea.  Instead of having customers call a support line and get help from an actual person, directing customers to a forum where other members have posted questions and answers to common questions is often a more economical solution than an actual help desk.  Of course, you probably won’t eliminate the help desk function altogether, but if you can use a forum to eliminate some percentage of calls that require support, you can probably justify a cost savings.   Note that there may be several potential benefits that can be called out in this regard: you might be able to Reduce Customer Support Staff (which is a hard-dollar benefit if you can truly justify needing fewer people); you might be able to Reduce Customer Support Facility Costs (fewer people might require less floor space, less environmental controls, less trash pickup, etc.); perhaps Reduce Customer Support Telecommunications Costs (fewer phone lines, fewer PBX switches, etc.); and perhaps Reduce Customer Support Equipment Costs (fewer computers, chairs, desks, etc.). 

Another obvious potential benefit is Reduce Marketing Costs.  Using a social network can often be a more cost-effective way of getting marketing messages in front of the appropriate eyeballs.  Even if the cost per impression (the cost of getting your message to one viewer) is higher than traditional methods (TV, Radio, Newspaper, Magazines, etc.) you might be able to demonstrate lower total costs in terms of marketing to the people you really want to market to.  In other words, it might cost you $10k to put out a radio add intended for your customers that’s heard by 100k people (most of whom are not customers); it might cost $5k to put out a social network add to 5k existing customers who are already members of your social media site: A higher cost per person, but a lower overall cost.

Two more related benefits may also be possible to justify on the basis of reducing actual costs: Reduce Cost of Customer Turnover and Reduce Cost of Employee Turnover.  In both cases, you calculate how much it costs to replace a customer or an employee, then calculate the amount saved by how much your social networking solution might reduce turnover.  The tricky part in this calculation is estimating how much turnover you will reduce.  To build a credible case for either of these benefits, you need good metrics, preferably from the same vertical in which your enterprise resides (if you are in technology, you need metrics from other technology companies; if you are in manufacturing, you need metrics from other manufacturing companies).  Bear in mind if you are in an environment with already low customer and/or employee turnover, this probably won’t be a benefit worth trying to justify.

One final cost reduction item I’ll mention this week is Reduce Travel Costs.  If your social media solution has elements of collaboration (file sharing, chats, group chats, content management, video, etc.) you may be able to justify some level of savings from reduced travel.  When employees in diverse locations can more effectively collaborate, the need for them to travel for physical meetings might be reduced.  Again, the key to justifying this benefit is gathering metrics on what other organizations like yours have been able to achieve with a similar social media solution. 

There are probably lots of other potential direct cost reductions that might apply to any given proposed social media implementation.  Next week, we’ll talk about some indirect cost reduction benefits and some revenue increase benefits that you might consider.

Failure and Success at Social Customer Support

Lots of companies now employ people to regularly monitor the major social media sites for complaints.  I know a few months ago when I tweeted something on Twitter (where else does one tweet) about the poor service I had received from my cell phone carrier, a support representative from the carrier tweeted me back within minutes offering to help.  This surprised me at the time, since it hadn’t occurred to me that companies were actually paying any attention to rants on Twitter (or any other social media sites, for that matter) looking for opportunities to provide support.

I had another opportunity to interact with a social media customer support representative recently, and was left both pleased and disappointed with the experience.  Allow me to explain:  Like so many people in the last few months, my wife’s email account (which she’s had for over a decade) was hacked.  The hacker registered a name very similar to hers, and started by sending all of her contacts the now-infamous “I’m stuck in London after losing my wallet please send me money” scam (an approach generically known as a 419 scam).  Since most of her friends (and I) knew she wasn’t in London and wouldn’t have sent such an email even if she had lost her wallet, I wasn’t too concerned when I first got the email.  But the hacker had not only broken into her account, he/she/it had also changed her password, so she could no longer even log in. A big problem, needless to say.  So we searched through the “what to do if you can’t get into your account” links at the provider’s site looking for an email address or a phone number to contact.  Nada. Zip. Nothing. Instead, we could only find a “fill out this form and we’ll get back to you in 24 hours,”  which was not at all what we were hoping to find.  So without any other recourse we filled out the form, and almost exactly 24 hours later got the password reset and she got back into her account.  End of story, or so I thought.

When it happened again two weeks later, I was determined to get a more timely response out of the email provider.  So instead of filling out a “we’ll get back to you with an automated response within 24 hours” form, I fired up Twitter and started to tweet one or two reasonably snarky (I know you are shocked…me??  Snarky??) remarks hoping to draw out a customer support representative from the company (and yes, I tried searching for the handle of a Twitter representative before I ever started ranting).  No response whatsoever from the Twitterverse until the next morning, when a random follower suggested a handle I could try to contact the company.  So I tried that, also apparently without any luck.

However, the handle I tried turned out to be one that apparently was being looked at (occasionally) by a Twitter customer service representative for the company, who upon noticing it contacted me asking for relevant details.  Details were provided, and an actual human person made an actual telephone call to my wife the next day to straighten out the problem.

So the whole experience was very much a good news/bad news affair.  On the bad news side, the provider’s website was totally useless with respect to customer service: no email, no phone, no way at all (other than a form) to contact someone at the company who might be able to solve the problem.  One would think if a company is going to go the social media customer support route, they might even have a “contact us via Twitter or Facebook” button, but no. If I hadn’t gone to Twitter and started ranting about the lack of service, I’m sure I’d still be exchanging form-based trouble tickets with someone or live-chatting with a person who isn’t authorized to help.  On the good news side, once the right support person got involved the problem was resolved quite quickly.

So kudos to the company for providing support via Twitter; boos to the company for not making easier for someone who *isn’t* on Twitter to get support.  I think there’s a lesson here: If you are going to provide customer support by monitoring a social media venue, you might want to make it easier to find your CSR there.  Otherwise, the CSR is probably going to be dealing with angry and frustrated customers, who have probably already publicly bashed your company.