Measuring Social CRM ROI

Making Social CRM Measurable is Key to Sustainability

If you've ever managed a Customer Relationship Management (CRM) software selection project, you know it's not just a matter of picking the best CRM system for your company – it's a matter of picking the best CRM system for your company that passes muster with whoever controls the purse strings, like your CFO. For many Social CRM projects, there is a similar looming threat from the money people. Similar to the case with marketing, most companies lack the ability to project hard return on investment (ROI) numbers on their proposed efforts. However, the new breed of marketing automation systems are arming marketers with supportable numbers to defend their decisions and get credit for what they've contributed. Still, those pursuing Social CRM projects find themselves in a challenging position to project numbers on the impact of social CRM.

This is the key issue that Cynthia Heinsohn and Kathy Herrmann took on when they began work on ValueRight, an application modeling tool that applies the numbers involved in Social CRM – both the revenues and the expenses – to forecast a clear picture of Social CRM results.

The tool requires users to enter data in each major category of gain and cost. From there, the system applies a methodology developed by the two PathLight Solutions partners to portray a picture of the value of a company's Social CRM initiatives. "It makes the person running the program a hero," Herrmann comments, "because you can tell your bosses how your Social CRM efforts are paying off or, if they're not, you can use hard numbers to decide that you're not ready for a Social CRM effort."

The tool comes in two editions, one aimed solely at social media projects, and a second, more full featured Social CRM edition that considers CRM and SCRM integration, communities, and other social media sources. The solutions also come with an eBook on the system, and a second eBook, "the Business of Social Business."

Like Social CRM itself, ValueRight's in its early stages. Herrmann wants to improve the user interface; it's currently an Excel-based application, and the target audience of business, marketing and financial analysts will demand a friendlier visual presentation, she says. But the mere availability of such a tool is welcome news for the Social CRM market; marketing suffered for years without the ability to tie costs and revenues with their efforts. Social CRM is an even trickier nut to crack.

From a human perspective, tools like this will be important because they address the left brain/right brain issues that Social CRM raises within companies. The people put in charge of most Social CRM efforts are creative people who aren't usually adept at or desirous of number crunching. Tools like this will allow companies to pick the right people for these projects and still get a measurable grasp on the numbers.