Dancing with the customer. Image by ixtlan via Flickr
Whilst working at Carphone Warehouse and Best Buy I made a contribution to Forrester's excellent report on the ROI of Customer Services Using Online Communities. One of the major obstacles that big companies still face is how to justify spending on social media in a language and format that financial planners and budget holders understand particularly in terms of benefits, which really means revenue and/or cost reduction. This report includes some realistic figures that demonstrate how a strong financial argument can be made for using Twitter for some types of customer service. In this case, the business case is based on reducing the cost to serve information to customers who would otherwise call the contact centre - typically the difference is $5 (call centre) versus (50 cents) Twitter for a successful transmission of information that enables the customer to self-service (for example configure email on a smartphone). The spreadsheet accompanying the report uses these key paramaters to build the business benefits case;
Direct call deflection
Indirect call deflection
Basically if you can offload x% of traffic from the call centre how much is this worth in terms of fewer agents?
Other factors include...
Increase in agent productivity
Reduction in agent assisted email
Increase in relevant Web site content and search engine optmization (SEO) rankings
Customer retention and customer lifetime value
I use a handy spreadsheet as a starting point to guide people through calculating the business case. The biggest challenge is translating intangible benefits into revenue or cost reduction numbers. Feel free to download and improve.