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

If 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.

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/

The growth and usage of Twitter is not surprising. Compete.com estimates approximately 21 million unique monthly visitors, and a quick search on Twitter yields a variety of conversations from music, sports, politics, events and products.

For business however, there’s an art to using Twitter, and the most successful at it follow an unwritten set of rules. The following are 5 important tips to follow on Twitter; all lessons that I have learned while working for companies like HP, Yahoo! and Intel.

#1: Do Some Research

Research is fundamental. I suggest that marketers or small business owners spend a few weeks understanding what types of conversations are happening on Twitter and then formulate a communications plan before actually engaging. This will help drive consistency in the messages shared on Twitter.

#2: Determine Your Goals

Not all businesses use Twitter the same way. Some, like @ComcastCares, use Twitter merely for customer support. Dell uses Twitter to sell products or share company-related information. Often, I see smaller, more local businesses use it to build relationships with their constituencies to drive customer loyalty programs.

Whatever your goals are, it’s important to think about what you want to achieve with Twitter before spending your valuable time and resources on it.

#3: Specify Your Twitter Profile

There are many options you can use when creating a Twitter profile. You can create a company-branded account, a personal account or a hybrid account.

Branded account:

A branded account is simply where your Twitter name corresponds with the name of your company, and usually the avatar is your company logo.

Personal account:

A personal account is a little more human and unites your own personal brand with that of the company you work for or own.

Hybrid account:

A hybrid account usually takes different elements from both the branded and personal accounts.

Every business is different, so whichever option you choose, there has to be a level of balance. Branded profiles are great for certain content—for example, industry news, contests, investor relations, etc. Personal profiles are more beneficial if your organization wants to leverage the employee’s personal micro-community or wants to have a more human presence.

When I worked for Intel, I used two profiles to build community: my personal Twitter profile and one I created for Intel. I followed an 80/20 rule that seemed to work perfectly for the community that I engaged with.  On my personal account, 80% of what I shared was conversational (i.e., asking/answering questions, sharing industry-related news, etc.) and 20% was Intel-specific content. The branded account was the opposite—80% of the content shared was Intel-specific and 20% was personal.  This worked very well and click-through rates on links I shared were well above industry average.

#4: Build Social Equity

To be successful on Twitter, you have to build trust and credibility with your community. The end result is an increase in your social equity. That doesn’t always translate to the number of followers, tweets, or retweets you may have either. Rather, it’s more about developing a reputation as a trusted source of information or being seen as an expert in a particular subject.

You won’t succeed in building your equity by pushing out one way marketing messages about your business. Instead ask questions, be personal, and engage people naturally within the community. Otherwise, customers won’t listen to what you have to say and your equity may even decrease.

Buying Twitter followers is not recommended either. There are a lot of companies that will promise you thousands of followers for a very low price. The problem is that many of the followers will never read your content, click through to your links and they’re probably just bots spitting out a multitude of Bit.ly links. Besides, if it becomes public that you did purchase followers, you will be called out by the community and your reputation may be damaged.

It’s not worth buying followers just to increase your “perceived” equity and influence because that’s all it will be, perceived.

#5: Track, Measure and Iterate

Any small- or medium-sized business should invest in a paid tracking service like Radian6 or ScoutLabs to better track Twitter conversations, identify trends, measure sentiment and get a quantifiable snapshot of what’s going on in the social web.

If you want to measure sales, you can simply use a tracking code or coupon code specific for Twitter that will help measure conversions. If you want to measure how much money Twitter has saved your company, you can track how many issues you resolved, leads you gathered, and dollars you saved through Twitter engagement versus traditional channels. If your goal is to handle customer support issues via Twitter, it’s wise to check if there are any decreases in the call volume to your customer support center.

The great thing about using Twitter for your business is that it’s very easy to iterate your metrics and communications plan on the fly. It’s important, however, to remember that your plan should always map back to your goals and objectives so you don’t lose focus.

What Twitter tips would you add? Are you tracking your Twitter activity?  Got a question?  Please comment in the box below.

In this interview I talk with Frank Eliason—the senior director of national customer care for Comcast—and the man behind @ComcastCares.

You may have heard that Comcast is on Twitter, but Frank talks about the channels Comcast monitors and how they engage customers. Frank mentions a concept called “peers helping peers.” In the video Frank also talks about what types of employees are best for handling Twitter support. Frank shares how Twitter helped Comcast rapidly identify a problem during the NHL playoffs in less than three minutes. He also shares the biggest mistakes businesses make with social media.

VIEW VIDEO HERE NOW:

I wanted to provide a bit of the back story on this interview. I was attending Blog World and saw Frank on a Panel discussion. I tweeted to him while he was on the stage, saying I would love to interview him.

He responded back almost immediately (via his iPhone), “Sure thing.” And we proceeded to do the unscripted interview you see here right after his presentation. Just goes to show you the power of social media!

What did you think about the video? What are your thoughts about Frank and Comcast?