How to Measure Social Media’s Impact on Customer Retention

social media how toDo you know if social media is helping you retain your existing customers? In this article I’ll discuss 7 key metrics to measure social media’s impact on keeping customers.

The cost-effectiveness of social media has vaulted it to the top of the list of tools used to improve customer retention. But how do you measure whether social media is affecting your ability to keep customers?

To examine this, let’s look at a case study of a company that has excelled at connecting with customers in social media spaces.

What We Can Learn From Comcast

customer service monsterIf you’ve been following companies using social media, then you’re sure to be watching what Comcast is doing.

They were presented with a difficult challenge of dealing with a perception of poor customer service and trying to change that perception.

This is evidenced by over 6300 people who are fans of the Facebook page called “I Hate Comcast.”

They did a combination of things in order to meet their objective. Frank Eliason, who Business Week called the most famous customer service manager ever, started the @ComcastCares Twitter account (he’s since moved on). This has now expanded to multiple Twitter accounts from their digital team that all start with @Comcast, my personal favorite being @ComcastBonnie. They also have several Facebook Fan pages with the Comcast fan page being the primary channel where they provide customer service to Facebook users.

comcast tweet

My tweet to Comcast.

In my personal experience, I had an issue with Comcast that I tweeted about and several things happened. Almost immediately, I received a reply from @ComcastBonnie asking if she could assist me. My issue was then transferred to a national response person who told me he was following up on my issue and would get back to me.

It took a few attempts but my cable got installed and I spoke to an amazing person who addressed my issue and was determined to make me happy, despite the issues I faced. So how should Comcast measure whether their efforts mattered? There are a few key metrics I recommend you examine.

#1: Customer Retention Rate

Will I stay with Comcast longer than a customer who never interacted with Comcast’s social media team? Compare the retention rate of customers who interact with social media channels versus those who don’t, whether it is through your customer service efforts and separately for any leads that have been generated.

Each month the customer stays with Comcast is worth a certain amount of revenue to the company. Assign an average dollar value to customers at different points in the life cycle and compare the value of a social media customer versus a non-social media customer based on retention rates.

#2: Decreased Operational Costs

Do customers who get assistance from the social media team tend to contact the customer service phone number more or less? It generally costs less to service a customer online than over the phone, depending on the company’s operational setup. Report how many customers were handled, the average time to resolution, the cost and the savings.

#3: Increased Usage of Self-Help Options

Do customers who interact with the social media team use the online customer service option at your website more or less? Online help centers typically facilitate customers finding answers on their own, which is certainly less expensive than a customer calling the service phone number. Report on how many social media customers went to this section of your site versus non-social media customers and show how much the company saved.

#4: Customer Saves

How many complaints were you able to turn into opportunities? I call these saves. They are customers who exhibited some key actions that can lead to a cancellation, but the customer either comes back or doesn’t cancel as a result of social media interaction. These customers are worth money to your company, so make sure to measure their value in your overall return on investment numbers.

#5: Customer Complaints Turned Into Raves

Do social media customers share their experience with others more or less than non-social media customers? What percentage of social media customers are likely to recommend your company to a friend?

Customers who interact with the company on social sites are more likely to have a “viral” tendency and love to share their positive and negative experiences with their friends, followers and fans. How many shared negative comments versus positive comments do you see? How far did they reach?

#6: Cross-sells

Are social media customers more or less likely to buy additional services? How much revenue was generated from cross-sells directly from social media compared to non-social media customers?

#7: Improved Process Innovations

How many issues handled by the social media service team led to process innovations to prevent the issue in the future? How much money will this save the company in lost customers each year? How much money will it save the company in employee time to handle the issues?

Because social media measurement is fairly new and many companies are just getting started, it’s important to measure everything against a control group so you can compare the rates of change.

For those in the early stages of their social media strategy, the numbers may not be “big” yet, but it’s the propensity of the customer to convert better, be more loyal, be more likely to use online resources and tell their friends about their experience that show the short-term and the long-term value for the company. Empowering customers and social media team members to become change agents and spearhead process improvements that will save the company time and money is priceless!

Comcast has a great story of how they’ve turned social media into a customer retention tool. We are all sad to see Frank Eliason leave Comcast, but we are looking forward to seeing great innovations from Citibank as he takes the helm as senior vice president of social media.

Related Articles:

How to Measure Social Media Return on Investment for the Complex Sale
4 Ways to Measure Social Media and Its Impact on Your Brand
How to Measure Social Media Marketing Performance

How are you measuring social media’s impact on customer retention? Did I miss any metrics that are valuable to your firm? What challenges are you facing in your ability to measure? Let us know in the box below.

Photo Source: http://www.flickr.com/photos/adriarichards/4370031554/sizes/m/in/photostream/

Tags: , , , , , , , , , , , , , , , , , , , , , ,

About the Author, Nichole Kelly

Nichole Kelly is the president of SME Digital, the digital marketing division of Social Media Explorer. They provide digital marketing strategy, implementation and measurement using the Full Frontal ROI methodology. Other posts by »




More Info
  • http://www.brickmarketing.com/ Nick Stamoulis

    This is proof that proper use of social media outlets, does really work. Comcast is a great example of how to leverage the power of social media and use it to your advantage, they have grasped the idea that customer service on many levels through different outlets = customer retention.

  • http://candidkatie.com Katie Morse

    Chris Brogan brought up an interesting point yesterday though which is worth sharing (http://www.chrisbrogan.com/it-wont-matter/) – activity on Twitter or Facebook is amazing, and yes it’s stupendously helpful, but companies still need to work on improving their offline help services.

    You point this out when you ask about being able to prevent issues and reducing churn, but ultimately the company has to be ready to change their overall processes in order to really be effective. If the right hand is doing something and the left hand isn’t, how does that look to a customer when they’re on the road and calling your 800 # because they can’t send you an @ message requesting help.

    Great food for thought!

    Katie
    Community Manager | Radian6
    @misskatiemo

  • Nichole_Kelly

    Nick – Thank you for your comment. I agree. Comcast really took advantage of social media to improve their perception in the market place.

  • Nichole_Kelly

    Katie – I agree with you 100%. While I think Comcast has done a great job, when I was at SXSW someone made a comment that social media hasn’t changed the fact that their customer service still sucks, to which everyone snickered. Social media will not change inherent problems with offline processes, it can however bring light to them so that the magnitude can be measured and provide the reinforcement necessary to get budget to fix them. Cross-functional communication has been a challenge in large companies for eons. It will be interesting to see how companies handle it.

  • http://twitter.com/jessica_p Jpolley

    @ComcastCares is a great example of a company shifting perceptions and saving its customer base. I experienced a major issue with Comcast last summer and resorted to Twitter to express my dissatification. You can read about my experience here:http://blogs.waggeneredstrom.com/thinkers-and-doers/2009/07/customer-twupport/

    In the end, my problem needed to be resolved the traditional way (on the phone) but the fact that I was listened to helped save me as a customer. @XboxSupport also does a stellar job for its client base.

  • Richard

    That was a really interesting post. Reading between the lines, of Chris Brogan’s post, another thing to consider is the effectiveness of the social media response. I understood that Chris had a problem but had deal with an unwieldy, and perhaps broken system. The social media team were ‘super helpful’ but if they didn’t resolve his problem were they not more showing empathy than being effective problem solvers.
    Could they not, and should they not, have taken control by releasing Chris to carry on his work until a person able to solve the problem phoned him. Now that would be customer service to talk about!

  • http://flavors.me/40deuce 40deuce

    This is a great example of how a company has managed to use social media to their benefit.
    While I don’t think that all of these exact steps will work for every company, these steps can be taken individually and evaluated for how they can work for your company.
    I think a lot of companies are starting to figure out just how social media can work for them (since it will be different for every company) and we’ll start to see a lot more success stories like Comcast.

    Cheers,

    Sheldon, community manager for Sysomos

  • Nichole_Kelly

    JPolley – Great post! Geesh as much time as I spend on my Xbox you think I would have known about XboxSupport! I’ll have to start following them!

  • Nichole_Kelly

    Sheldon – I think you are right. We tend to hear a lot about big brands and success stories. That’s great information but I really want to hear about failures too, that’s where the real learning begins.

  • http://brettgreene.co BrettGreene

    Thanks for writing this article. Retention is really what needs to be focused on for ROI. That is where the value lies in customer social media efforts like Comcasts.

    The funniest answer I’ve heard to the question of how to track social media ROI is “see if your business is here in 5 years without it.” The best answer I’ve heard is, “How do you track ROI in your other departments besides sales?”

    The seven measurements you list here are what business owners and executives truly need to track to evaluate how effective their social media efforts are.

    @BrettGreene
    http://oxsteinlabs.com

  • http://about.me/romerobv Romero Cavalcanti

    Wonderful post.

    Comparing a companies without real-time interaction with customers through social media with a companies who use real-time interaction. The difference between these two worlds entails a series of actions to adapt companies new conditions = different for every company.

    Time for adaptation.

    Customers behavior.

    Greetings from Brazil.

  • http://twitter.com/mycustomercloud Nub Games, Inc.

    Whether it is social media, website, phone, e-mail or face-to-face, what every customers wants is a real conversation and to be heard. I think companies have fallen into a mode where they expect customers to come to them. Companies have to have a relationship with their customers and that relationship can’t be one-sided. You have to be available to your customers where *they* are and social media is powerful way to do that.Amy Shelton@mycustomercloud

  • http://www.aediscreative.com Christopher

    I think it is truth’s like this that are leading to the re-emergence of small business. Companies that are agile and better able to meet their customers on a human level will survive by navigating through the gaps created by larger corporations.

    @uryga
    http://www.aediscreative.com

  • Nichole_Kelly

    Brett – Thank you so much for your great feedback! I love those responses. It is definitely true that social media has been more heavily scrutinized as “fluff” than other more traditional advertising forms. But we are here to prove them all wrong, right! ;-)

  • Nichole_Kelly

    Romero – Thank you for commenting. Yes sir, time for adaptation.

  • Nichole_Kelly

    Amy and Chris – Great comments. As Greg Cangialosi, CEO of BlueSky Factory says…you have to be the relationship before the sale. As companies are looking to speed up their sales cycles by forcing people through the funnel, many are learning that customers buy faster if they feel like they have a relationship with you. The same is true from a customer service level. You can’t cut back on this critical “operational” expense and/or recruit less qualified individuals and expect to keep your customers happy and coming back for more. It’s the human element to business.

  • http://work911.com/ Robert Bacal

    Good social media metrics (KPI’s) Except the case study is a terrible example of avoiding business issues. Ok. Comcast is till ranked second worst in terms of customer perception of customer service quality, a position it held while Eliason was doing his “magic” (give or take) I believe it’s been in the bottom four for at least four years. So, here’s the problem, If social media efforts have been so successful, why are they still listed second to last? And, in fact, what role does customer perception play in business bottom line? Maybe this ranking is irrelevant? Maybe Comcast wouldn’t lose dissatisfied customers anyway?

    I don’t know. I’d suggest there are more questions to ask, and we need to stop holding up questionable case studies as examples that may mislead other businesses.

  • Frank Eliason

    Robert,
    During this time period customer satisfaction, based on the ACSI survey went up 9% and 3%, which if you review was one of the largest increases of any company measured (if I remember correctly, Sprint was the only company the increased more). I hope that provides some insight,

    Thank you!
    Frank Eliason
    Formerly @comcastcares, now @frankeliason

  • Frank Eliason

    I should also point out that Mr. Bacal has a bias toward social media, and Customer interactions. He even is using social media to spread this message through a Twitter handle called @socialmediabust

    Here is a post he recently did on the topic http://bit.ly/d9GI8W

  • http://twitter.com/AskCareOne Suzanne Cramer

    Thanks Frank!

  • Nichole_Kelly

    Frank – Thank you so much for taking the time to post on this article. I think you did a tremendous job of using social media to innovate Comcast’s servicing team. Personally, I’ve still had poor service when dealing with field Comcast representatives. As recently as just yesterday actually. However, I will say that I understand that it takes time to adjust the culture of an organization and this certainly is a good example of working to make that change. I’ve chosen to stay with Comcast as a result of the interactions I’ve had with the social media team and I would have cancelled if it weren’t for them. Hopefully this level of service will permeate the entire organization over time. Congrats on your move to Citibank! Since we are both working in the financial industry I’d love to share ideas. ;-)

  • Nichole_Kelly

    Robert – Thank you so much for your comment. I think it is important to understand that while Comcast has done a great job, in my opinion, of leveraging social media to provide national customer service, they do still struggle at the field level. I’ve personally experienced it, but I can tell you that I am still a customer because of their social media team. This is an issue for many companies that coordinate marketing efforts from a corporate headquarters while servicing customers locally. For me, I chose Comcast because this is a case study of my experience. There are certainly others I could have written about but this is the only company that I have personally interacted with through social media that gave me a unique personal experience to tell. What other companies do you feel are doing a great job of using social media for customer service? I’m very interested to hearing your examples and continuing the discussion.

  • http://work911.com/ Robert Bacal

    It seems to me you guys want things both ways. Look. IF social media is SO powerful and effective in terms of business outcomes, you’d expect Comcast to have made substantial strides in terms of the perceptions of its customers. It hasn’t and they have admitted the relative impotence of social media to do that (today, btw).

    You’d also think that if negative perceptions of customer service for comcast were SO important to the business, that they’d (as has been predicted by lots of folks like Frank) have suffered severe financial consequences. They haven’t.

    First, customer service perceptions is one (and a minor one in most cases) of what determines what customers DO. You’ll have to wait for my book to hear more because it’s a bit of a complicated psychological issue. It’s really not that important, and that’s why customer service is so bad.

    Second, social media has been demonstrated as NOT the tool to change things for comcast in terms of customer service, but then again, if they leave things just the way they are and are not embarrassed at their lowly positions, they’ll continue to do fine. I don’t like that. but that’s how it works.

    I understand people want things to be different. We all want better service, but wishful thinking does not make things so. I’m glad some people feel they have benefited from Comcast’s social media, but the evidence seems clear, when you put side KPI’s and look at bottom lines, something that people like Frank don’t like to do.

    The whole thing with the research and metrics is now available in ebook format (Kindle which can be read on almost anything these days: Giving The Business To Social Media Research http://amzn.to/bgKGPV

    I also understand that you have no reason to believe me, and it sounds like you know Frank (who is engaged in a wee bit of Internet creeping after me), so my point with my book is to provide people with the tools to evaluate what they are being told. Hope and Hype rule the day in social media and customer service, and I want to help people sort thruh, which is why the book as a whole is entitled “Giving The Business To Social Media – Hope, Hype, Reality. Since Frank mentioned my website (one of them), http://socialmediabust.com and http://customerservicezone.com where we look at all sides of the many issues.

  • Nichole_Kelly

    Robert –

    Thank you for taking the time to provide your perspective. For me, it’s important to recognize that social media in and of itself will not “change” anything. It is the ability for the individuals inside the organization to “listen” to what people are saying about their brand combined with the ability for the company to be nimble and adjust in order to use the information to better the organization. And ultimately, whether or not they care what their customers and prospects think. I’ve certainly experienced companies who don’t. But I’ve worked with many more who absolutely do care. Most big companies I’ve worked in are like steering a large ship, it takes time for the ship to adjust. We have to be patient for those changes to affect the entire organization before we decide to abandon ship and charge social media with not being effective.

    I’ve seen Frank speak at a few conferences, but I certainly wouldn’t claim to “know” him. I’m sure he doesn’t know me from Adam. :-) However, I would say that we don’t really know what changes happened inside Comcast as a result of social media. While they may not be as prevalent at the field level yet, I have faith that Frank drove many innovations inside the company that may still be making their way out to the public. Only Frank could speak to what changes have or have not been spearheaded.

    It sounds like you have done a lot of research into the complex psychology of customer and corporate psychology. I’ll certainly check it out. Good luck on your book!

  • Donna Foerst

    This article showed how a company uses social media to help with their customer service. This is great that the customer service online for Comcast improved tremendously, but offline was there improvement with their customer service? There are still people out there who do not use social media at all.

    I think this is a good way and inexpensive way for companies to improve their customer service and keep clients, but I also think companies also need to change their processes offline and have better customer service.

    Donna Foerst

  • Pingback: How to Measure Social Media’s Impact on Customer Retention «()

  • http://www.marblepolishing.net/ Marble Repair West Palm Beach

    Thanks for writing this article. I really enjoyed that.

  • Pingback: How to Measure Social Media’s Impact on Customer Retention()

  • Pingback: Three Levels of Social Media Measurement « Social Media Hawk()

  • Pingback: Social Media is Better for Customer Retention Than Customer Acquistion |()

  • http://www.facebook.com/elias.shams Elias Shams

    It’s no brainer to see that social media is here to stay for good. Given vast variety of the existing channels to choose and stick with, it’s time for such a hot space to enter into a new category. There is a need for a portal to provide a quick and intelligent decision for both the consumer and the enterprise about their online connections.

    A Platform to Help us to Distinguish Our Quality vs. Quantity Friends, Fans, Followers, and Companies

    Facebook, Twitter, LinkedIn, Youtube, Flickr and others have been doing a decent job of providing additional marketing exposure and even in some cases, additional revenue. However, as more and more social networking sites pop up, how do you manage your brand across all these channels? Maybe more importantly, which one of these sites should you select as the one that will help you best reach your target audience? The proliferation of the social media avenues is becoming overwhelming.

    This glut of information reminds me of the early 90’s when WWW was adopted broadly by the general public. Every company rushed to have a presence, to the point it became literally impossible to find the right information on the Web. That’s when a better generation of search engines – at first the Yahoo! and then Google – entered the market and helped us find the most relevant information by just typing simple keywords in their search box. If you had asked before Google launched, if there was a need for another search engine – most would have said no, we already have those….

    Then came Web 1.0 & 2.0 – Youtube, Flickr, myspace, Facebook, Twitter and countless others have turned everyday people into content producers, influencers and experts. We basically tripled down on the information overload How do you know which channels to select for deploying your social media strategy? How do you know which one is the right channel to let your fans and followers to find you, your products, and services? Most importantly, who is Joe Smith that is recommending that person, that company, that product?

    I hope my awesomize.me can accomplish such a mission. The site is not another social networking platform. Yet the portal to all your existing social media channels. The platform helps you, your fans, your potential clients to make an intelligent decision as to which company to connect to or follow via which social media channels and why? It’s free!

    Elias
    CEO & Founder
    http://awesomize.me

  • http://www.facebook.com/elias.shams Elias Shams

    It’s no brainer to see that social media is here to stay for good. Given vast variety of the existing channels to choose and stick with, it’s time for such a hot space to enter into a new category. There is a need for a portal to provide a quick and intelligent decision for both the consumer and the enterprise about their online connections.

    A Platform to Help us to Distinguish Our Quality vs. Quantity Friends, Fans, Followers, and Companies

    Facebook, Twitter, LinkedIn, Youtube, Flickr and others have been doing a decent job of providing additional marketing exposure and even in some cases, additional revenue. However, as more and more social networking sites pop up, how do you manage your brand across all these channels? Maybe more importantly, which one of these sites should you select as the one that will help you best reach your target audience? The proliferation of the social media avenues is becoming overwhelming.

    This glut of information reminds me of the early 90’s when WWW was adopted broadly by the general public. Every company rushed to have a presence, to the point it became literally impossible to find the right information on the Web. That’s when a better generation of search engines – at first the Yahoo! and then Google – entered the market and helped us find the most relevant information by just typing simple keywords in their search box. If you had asked before Google launched, if there was a need for another search engine – most would have said no, we already have those….

    Then came Web 1.0 & 2.0 – Youtube, Flickr, myspace, Facebook, Twitter and countless others have turned everyday people into content producers, influencers and experts. We basically tripled down on the information overload How do you know which channels to select for deploying your social media strategy? How do you know which one is the right channel to let your fans and followers to find you, your products, and services? Most importantly, who is Joe Smith that is recommending that person, that company, that product?

    I hope my awesomize.me can accomplish such a mission. The site is not another social networking platform. Yet the portal to all your existing social media channels. The platform helps you, your fans, your potential clients to make an intelligent decision as to which company to connect to or follow via which social media channels and why? It’s free!

    Elias
    CEO & Founder
    http://awesomize.me

  • Pratishthachhetri

    Highly informative! thank you so much.

    here is a link on how to use social media for customer service;http://creativaindia.co.in/blog/social-media-customer-service/
    hope its useful!

  • Pingback: Influential people in social media the key to increase sales and brand awarenss « Stingray Agency()









Pinterest
Join our Social Media Marketing Networking Club
Get Your FREE Copy of the 2014 Social Media Marketing Industry Report
Wondering how your peers are using social media? Get this free report (50 pages, 80+ charts) and never miss another great article from Social Media Examiner.
Check out the Social Media Marketing Podcast!