Measuring ROI: A Nonlinear Process
Twitter is an odd little application, isn’t it? One of the ways I encourage participation on Twitter is to ask a “Question of the Day.” I offer followers the opportunity to voice their opinions on a number of topics.
I provide background for the questions by offering five or six tweets prior to asking them. This strategy seemed to be working well — the number of followers was increasing and participation in each question was at an all-time high.
And then a minirevolt emerged. A segment of the audience informed me that my use of Twitter wasn't appropriate for the microblogging platform. Upon learning this, I decided to ask all of my followers if my use of Twitter was appropriate. Fifty-five percent of the followers who responded said that my use of Twitter wasn’t as effective as it could be.
So I did something different. For the following week, I strictly adhered to the advice offered by my followers, because, after all, these folks were using the microblogging platform, so they must know what works and what doesn’t. That week I simply asked my questions without context, using Twitter as recommended by the audience of the microblogging service.
A funny thing happened when I made the change in strategy: People stopped interacting with the questions. Without pretweet context, the conversation died.
When measuring return on investment, marketers tend to focus on a very linear process. They evaluate best practices, apply their brand perspectives to those best practices and then tie revenue to the marketing process.
Increasingly, however, measuring ROI has become a nonlinear process. Best practices yield a 50 percent chance of providing an acceptable ROI; listening to your customer base yields a 50 percent chance of providing an acceptable ROI. Your strategies could yield a 50 percent chance of providing an acceptable ROI. As a result, you're multiplying a probability of success by a probability of success by a probability of success, yielding a low probability of success.
A nonlinear process requires you to identify a strategy/innovation that works, paired with a best practice that historically worked and an audience that's ready to embrace a combination of strategy/innovation/best practice. Make a misstep in any one of these areas and ROI suffers. This nonlinear process is challenging, because you never know the probability of success in your strategy, best practices or audience acceptance. You continually iterate seeking success, while all of the parts continue to move.
Back to my experiences on Twitter: I messed around with two moving parts. First, my nontraditional use of the microblogging platform actually yielded unanticipated success within a vocal minority of my audience. Second, I incorrectly applied a best practice (listening to my customers) to a minority of my audience. The combination of strategies yielded a listless following that stopped interacting. And if you're using Twitter, you know that without interaction you have nothing.
It's your job as marketers to realize that ROI is a nonlinear process, requiring strategic thought at each stage to yield success. Carelessly messing with a portion of the ecosystem causes the entire ecosystem to fail. Maybe it's always been this way, but with real-time interaction and measurement tools, it's easy to see how ROI can be suboptimized.