Cash-Flow. The number one KPI for social media’s results is cash-flow. Does it increase or decrease when you use social media?
Your company is in the business of offering products and services. For money. Your money to produce and deliver. Your customers’ money to purchase.
That dynamic, the inflow and outflow of cash, tells a company’s story and foreshadows its destiny. Any company survives and remains master of its destiny based on how much positive cash-flow it generates from that dynamic.
If you’re fans/members/followers are not buying then be honest with yourself: They are not customers of your company. Not being customers, they are not engaged with your company. No, seriously. It is cash-flow.
They may be customers of your marketing department or your social media agency’s efforts (community forum, widgets, cartoons/videos, profile personalization options). but they are not your customers. They may be fans of your community manager’s wit, each other’s wit and knowledge. But they are not your customers. They remain merely…fans/members/followers of someone’s social media expertise.
They are only your customers if they become fully engaged with your company. Fully engaged means they open their pocketbook/creditcard/checkbook to you, for your products and services. The checkbook meets the hand is the equivalent of the rubber meets the road. It is the reality check in every conversation in the marketplace.
A customer’s purchase is the most meaningful KPI reciprocates your trust in them. That trust was first signaled by you when you invested your cash and knowledge and time and energy in creating a product or service to meet their needs. Their purchase reciprocates that trust. It shows they are fully engaged, truly believe, your message.
I am as big a fan of social media’s potential in creating community, exchanging ideas, building connections, conversation….as anyone. I love meaning and purpose as much as the next person. And, social media may be the most efficient means to communicate, evangelize, globalize, meaning and purpose.
But even altruistic purposes need cash-flows in the form of donations to survive, mature and translate that passion into meaningful action.
There are businesses who design, create and host cocktail parties. Caterers, cooks, DJs, beverage vending companies, facilities where everyone can gather. Their business is creating fun events. But no one confuses badges worn, hands stamped or dances danced as meaningful to anyone but the party vendor and the attendees. If the party doesn’t translate into deals, purchases and cash-flowed…back to the company, ultimately that cocktail party is irrelevant. Fun, sure. Just like the next one.
But, the KPIs of conversations and friends/followers/fans offer a business the meaningful equivalent of a “Let’s do lunch…” farewell at a cocktail party. And social media is the globe’s always open digital cocktail party.
There are many other KPIs for social media’s performance. Here is a list of 35 KPIs that measure engagement by Chris Lake. I like the list. I like the post, a lot. I like that he started the conversation off with a courteous nod to the importance of revenues. And he acknowledges with one sentence that you want people to buy your products….But, then he quickly rushes past it to the really important stuff….like widgets and settings, followers, friends and settings. To show their relative importance he bolded their itemized listings. And if Casey and I were to sit down and talk together, have a conversation, we’d be on the same page with differences amounting to tiny shades of grey.
Ultimately, they are relevant only with a positive impact on an organization’s cash-flow. The power of social media is done a disservice when lists of KPIs omit cash-flow. The irony is obvious. The resource that allows transparent conversation, to speak and listen, to your customers in their language, is touted with metrics that fail to speak the language of their ultimate customer: the CEO and CFO. These are the decision-makers for social media’s use.
Maybe this is harsh. Maybe. Whatever. Get over it. Here’s why. It is a disservice to the business community, especially the small business community. Social media has the power to level the playing field for small business. It offers an incredibly cost-efficient means to communicate the advantages of an unique brand to a global audience. Its cost-effectiveness comes from the company’s customers supplanting traditional, and often ineffective, but always expensive forms of advertising. They supplant them with their word-of-mouth accelerated with the tools of social media. Their conversations translate into higher sales, lower marketing costs, more referrals and lower customer churn, higher conversion rates and lower sales cycles.
And it is a disservice to your own agency or department. You have found and mastered a powerful resource for your client or company. It is a resource that can help them reach their goals and in doing so help you reach your goals.
Your shared success will be translated and reported in the ultimate KPI that measures engagement from a company’s employees and customers: cash-flow.