Let's Develop a Quality Metric to Measure Enterprise 2.0 ROI

I'm going to get this out there right from the start: this is one of those posts where I really want your input. I'm going to ask you at the end of this "What do you think?" and I hope you'll respond because this is a topic that really requires robust conversation.

Last Wednesday I posited the idea that when we all talk about Enterprise 2.0 ROI in terms of quantitative measures, we're approaching the issue in the wrong way. We should, instead, be measuring the quality of the connections social media within our enterprises makes possible.

Then I let myself off the hook by saying this: "I can't tell you what a standardized quality metric would look like -- this is a random thought after all."

Since then I've had the good fortune to start a conversation with Jen Anderson, a superstar Allyis analyst. I asked Jen for her opinions on how we might go about shaping a useful Quality Metric for Enterprise 2.0. I have posted Jen's response below for you to review. One of the first things she did was reshape my binary thinking on this topic -- I resisted the idea that Enterprise 2.0 should or could be measured quantitatively and argued it should be measured qualitatively. Jen points out the solution is probably somewhere in the middle of those two extremes -- a combined quantitative and qualitative measurement.

Here are Jen's comments:

Ethan - Interesting thoughts. I think about this stuff all the time. The challenge of integrating a quality measurement is that for any relationship (business alike) quality needs to be mutually defined, which at the end of the day, is subjective and needs based. To that point, researchers have been able to measure and predict subjective measurements like satisfaction for some time now. Given that we are talking about media based measurement, there is likely a happy medium for quantitative and qualitative measurement to meet on an agreed quality measurement, if desired.

However, my philosophy for any media marketing measurement framework is to first understand *how* the vehicle(s) (website or social application, etc.) will be used and *for what purpose*. So, to begin to define this in the social media space, I recommend looking at:

1. Business Value to company: Define goal of investment
· Such as: Benefits, costs, risks
2. Business Value to user: What need for customer does this fulfill?
· Such as: How will this vehicle benefit the customer?
3. The Overall Value: defined by the desired outcomes for both 1& 2

I am assuming there is some relationship between value and quality. With that, once the above exercise is complete, existing data or new data can then shape the quality metric, based on a comprehensive and holistic approach to measure and optimize achieving (#3) the desired outcome(s). For instance, depending on 1&2, the quality metric can be some combination of the following measures:
· Standard metrics: Reach (users), retention (returning users), Activities (posts, comments), etc.
· Voice of the Customer/Partner: Affinity, Awareness, Satisfaction, etc. measured via Surveys, interviews, or self-reported feedback
· Competitive Intelligence: As appropriate, research and industry data to assess Share of Market/Preference
· Emergent metrics: Sentiment (text analytics), attitudes, level of interaction, etc.
· Outcomes: Loyalty (Lifetime Value), Revenue, Profitability, Satisfaction, etc.

In my mind, the goal of the quality metric it to bridge the gaps and find the correlations between the significant metrics as are appropriate for your business and customer objectives, knowing that the factors that impact those metrics are as organic as the social media vehicles themselves.

Were you hoping for an equation? Don’t have that yet. We can run through some client scenarios if you’d like - that would be FUN!

Jen and I are going to continue this conversation and I'll update you as we do; we are going to game out some Enterprise 2.0 scenarios and see if we can arrive at a standardized metric that begins with the objective, quantitative measure but moves that forward into the social media age by incorporating the subjective, qualitative element as well. I think there's a critical need for this kind of measurement when it comes to Enterprise 2.0 -- mere numbers aren't enough in an Enterprise 2.0 environment. How many people have profiles on the social networking platform isn't the only thing that matters -- we need to know the depth and usefulness of their engagements with one another and then find a way to trace those engagements as cause of a positive effect on the company bottom line. I happen to believe intuitively that those cause/effect relationships exist, but I want to move this beyond intuition.

Now, here it comes: "What do you think?" This is a conversation that requires the wisdom of the crowd if we're going to get it right. That's where you come in. What's your response to this? Do you agree there's a need for a new approach to metrics if we're going to accurately determine Enterprise 2.0 ROI? If you do, how would you go about it? If you disagree, tell me that too! The goal is just to have a good conversation about all this.