Prove the ROI of Social Media Customer Service

Social media customer service. It’s a new frontier.

From Facebook to Twitter to Instagram to LinkedIn, customers can interact with a business quicker and more efficiently than ever before.

Some businesses see this as a revolution, a new smart way to service their customers, but some are still unsure whether it’s worth it.

What return will I get for my investment? It’s a common question that so many marketers hear and is not always straightforward to answer, but it is possible. In this blog, we break down the three steps that will help you show the ROI of your social media customer service.

Understanding the customer behaviour you want to affect

The first step to proving ROI is to understand what the business wants to get out of their social media accounts. Each company will have unique goals depending on their industry, size and target demographic. For example, a charity organisation will want to use social media to increase awareness for their cause, so their goal will be to increase the number of likes, shares or branded hashtags that their customers use. Alternatively, a small start-up business will aim to expand its customer base and deal with questions or complaints about the product/service. A larger, more established company, will seek to build rapport with their customers and generate repeat business.

An example of the latter is Wendy’s. They are a large, well known, international company with a predominantly younger target audience. As such, they use their Twitter account to build rapport with the youth demographic through humorous exchanges and witty replies to customer enquiries, whilst simultaneously promoting their brand.

An example of this is shown in the Twitter post below.

What customer service can you measure and change

Once you’ve identified the business aims regarding their social media accounts, the second step is to work out what can be quantified. The calculations you make will depend on the goals you identified in Step 1. 

Dealing with online queries and complaints: Complaints and questions are a part of any business selling a product or offering a service. Some can be a simple two-minute call to the business while other, more complicated problems, may take staff much longer, sometimes eating into the time an employee could otherwise use being productive.

Dealing with these interactions through social media is a great way to reduce the time spent on each query while still giving them the attention they deserve. The time you save is your return and needs to be continuously documented to prove the work you’re doing is paying dividends.

Another element to consider is the customers you’ll retain who think phoning the business or visiting a representative in-store is too much effort. However, these people will be quite happy to spend 30 seconds writing to your company on social media. While it is harder to measure the return this service provides, it undoubtedly helps to service the client base and retain happy customers who would otherwise be dissatisfied. 

Keeping the customer base engaged: While a new customer is good for a business, a loyal and repeat customer is even better. However, establishing this relationship is easier said than done.

Social media is a great way to do this in a personal and informal setting. By continually posting, your customers and followers will have constant exposure to your business on a day-to-day basis, and if your content is interesting, you’ll get continuous engagement. How much your user base is engaged with your business can be tracked in two ways.

The first approach, which is the easier of the two, is monitoring post engagement and likes. While this can give you insight into how many people are engaging with your brand, it cannot tell you how many of those people are also paying customers.

The second method is through short after purchase questionnaires that ask the paying customer how they heard about the business, and if they follow the company on social media. While some customers may avoid putting in an answer, it is a guaranteed way of getting feedback solely from paying clients.

Calculate and summarise ROI findings

Once you’ve determined what you want to get out of social media, and you’ve worked out what you’re calculating, the final step is to crunch the numbers.

For dealing with online queries and complaints, you should calculate how long it takes to deal with enquiries in-person or over the phone (i.e. before social customer service was implemented). Then work out the number of queries per month.

For example, if an average enquiry takes 15 minutes to resolve, and there are 100 per month, this equals 1,500 minutes (or 25 hours). If your average wage for employees dealing with these enquiries is $30 an hour, you’ve spent $750 on managing these queries.

Now you need to compare this to using social media. Often these issues can be dealt with much quicker online. For the same queries, the average time taken to resolve them may only be 6 minutes. This is 600 minutes per month or 10 hours. The cost of this would only be $300. The ROI would then be $750 – $300, which is $450.

For engaging the customer base, you can use the relevant social media platform’s analytics program to quickly run reports showing the increase in likes, shares and retweets compared to what they were before offering social customer service.