It is my great pleasure to present the final post of my colleague Laurie Shook. Laurie brings her vast social media expertise and passion for enterprise 2.0 to introduce a new series on: How to Measure Enterprise Social Success. In Part three below, she analyses the Social Business Index recently launched by Dachis Group, which attempts to measure social engagement related to companies, their markets, partners, and their employees..
Part 3: The Business of Measuring Business
It’s the dreaded question in every social media seminar: What’s the ROI of social media? Occasionally, we see specific case studies that prove the value of social media, but to date, the best proof of its importance is the corporate embarrassment when it is absent.
The Social Business Index (SBI), announced recently by Dachis Group, could be a good start toward measuring the corporate social media effectiveness. It’s somewhat like Klout, in that it purports to calculate overall social media strength, albeit based on a company’s ecosystem rather than an individual. Perhaps the most interesting part of SBI is the social graph, which depicts the relative size of each element in the ecosystem, and the strength of the relationships between the parties, which include corporate, partners, employees, the market or customers, and influencers such as analysts and industry experts.
Where the SBI differs from Klout is that it’s much more ambitious. In addition to measuring social ROI, it is designed to analyze the effectiveness of social strategies and tactics and to identify actionable insights. Presumably, the ability to provide company-specific actionable insights will serve as a marketing tool for Dachis as it seeks to attract Fortune 500 clients.
The SBI can be compared to a stock market ticker. It’s an index that rolls across the top of the computer screen, updated every 15 minutes with the short-term results of corporate social media efforts. Just like the stock market, much of social media is processed by a few major exchanges, namely Facebook, Google, and Twitter. However, since social media is initiated by millions of individuals in scattered properties including blogs and comments, the task of monitoring becomes evermore difficult. It’s as if the OTC element of the market is even more crucial. Like the stock market, the index shows gainers, losers, and top performers.
So who does the SBI say is “winning?” Facebook and Google, natch! It’s questionable as to whether they should even be included in the index, since it’s a bit of “the medium is the message,” to paraphrase Marshall McLuhan. But Dachis says that they measured Facebook and Google from a conversation perspective and didn’t give any weight to their inherent platform advantages. A surprising top performer is Coinstar, the company with the grocery-store based automatic coin counters. Who knew?
What are the benefits of the SBI? The stock market comparisons might actually get CEOs to pay attention to social media performance, since they are tuned in to the format, beating competitors, and delivering results. That would be a good thing. However, I would imagine corporate marketers might be sensitive about their CEOs reactions to the 15 minute ups and downs, especially since it’s hard to explain what algorithms drive the ratings changes. And constant social media chatter might be good for ratings, although it might be wearisome to your fans.
Short term, Dachis might improve the SBI by focusing more on the accuracy of the daily measurements vs. trying to get 15 minute data polls, since the ticker crawls across the screen at a snail’s pace. Longer term, it will be interesting to watch the SBI to see how accurately it measures real world PR crises and the response to them. Will it measure negative sentiment appropriately, or will it misread volume increases as good? If a company handles a negative event well in social media, will the index pick that up?
And of particular interest, according to Dion Hinchcliffe of Dachis, “We are considering how to make this same process work within companies as well to handle the full spectrum that represents social business today.”
The proof will be in the pudding. But the Social Business Index is definitely a step in right direction, by any measure.
- Part 1: How Do We KNOW how We are Doing? A look at some of the metrics that companies bandy about, and an evaluation of which metrics are misleading and which ones are meaningful.
- Part 2: How Do We THINK We are Doing? Enterprise self-appraisal as measured by the Blogtronix survey “The State of Enterprise 2.0 Collaboration”. Highlights from the study.