This is the second part of ‘How to Prove the ROI of Customer Service in Social Media’. You can read part one here.

Direct sales (Revenue)

Now we have estimated the cost savings of customer service in social media, we’re going to look at the possible revenue streams.

Direct sales is the first opportunity that you have. Depending on the topic of the comment, there may be a small or larger sized sales opportunity. If the question is related to how to make a purchase, well then this is an obvious opportunity. If it’s related to a bad experience, well then you’ve got the opportunity to turn that around to something good.

All replies posted by you are an opportunity to include a link back to your site. Whether this is your customer service contact form, product page, information pages and so on it can, with a tracking tool in place, be attributed to direct sales.

I used in combination with Google Analytics campaign links. That way we could measure direct sales from messages we posted. In Brandwatch, we had configured search terms for identifying sales opportunities that the customer service team could forward to our sales reps.

Reduced amount of lost sales (Revenue)

This one is important. Here I’ll try to measure the impact of top ranking negative posts in a search. If you can assess and resolve these there should, logically, be a reduced amount of lost sales, as fewer people will see the negative posts. Do you buy in to my reasoning? Hey, the point is to get your budget approved, but maybe these are not the most important things you’ll be reporting on each week.

Measuring this will be difficult but let’s wing an example; look at the domain where the mention is posted. Can you attribute any sales to this domain? Can you attribute sales to the actual mention on this domain (use your web analytic software and try to dig as deep as possible into referral sources). Is there a change in sales before and after the mention has been assessed? Can you calculate an average increased sales factor here?

Average Increased Sales = ((Referral traffic sales after – Referral traffic sales before)/Referral traffic sales before))*100

SEO back links (Cost saving)

Each link you post, unless it’s attributed with “no follow“, can help you build your page rank.

Increased page rank will make your website potentially rank higher in search. We now know that links on Twitter are a signal to Google and you can see which forums don’t put ‘nofollow’ on the post links. Here you could attribute a value to what each back link is worth to you. Each link to your site will be considered as a vote for your site by search engines. More and better votes for your sites means higher rankings in the search engine results, more traffic and more revenue.

These links can come in the form of signatures, mentions, tweets, etc. Each of these links has a value, and unless you have an SEO specialist in your company who would estimate a cost saving for you, you could roughly estimate these at 1% of your global CPA (Cost per Acquisition).

Adding up your total costs for customer service in Social media

Supercharging your contact centre with social media comes with a few costs. Normally these would be:

  • Cost of customer service agent/community manager(s)
  • Cost of XY hours of data analyst(s)
  • Cost of social media monitoring tool

Adding up the above (along with any other costs that you consider necessary for your social media customer service programme) will give you your total costs that you need for calculating the social media customer service ROI.

Your C-level executives may also have opportunity costs in the back of their mind i.e. now we’re doing social media customer service, when we could have been doing something else. This may be something to consider as well when building your case.

Calculating your social media customer service ROI

Estimating the gains and costs, hopefully your number ends up being larger than zero. Of course, this model is far from bullet proof and should be seen as a guidance and as a way of building your case for getting the buy-in and go ahead for your project. Even though you can see no deflected calls or any direct sales, the mention you solve may have been the one that else would have fuelled a viral outrage that would have caused a social media disaster.