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How to Measure the Business Impact of Data Quality

So, you want to invest in data quality but you need to prove ROI before you get the resources. Intuitively you know that data quality is impacting your business. How to measure that to make a case is the test.

Many businesses focus on data elements that are easy to see and understand like company and contact information.  However, as obvious as some of these elements may be, they don’t always lead to the highest bang for the buck.  Data elements have priority levels within processes depending on the desired business outcome.  In addition, data elements have dependencies outside of how the information comes into the system.  You need to take this into account as you conduct your business analysis and map your data across your business processes.

During business analysis it pays to establish a foundation that validates recommendations and shows ROI through case studies.  You can do this through data analysis and pilot programs.  Data analysis can be applied through meta data segmentation within processes where you look at the existing state of the data.  You can also improve portions of the data and perform the segmentation and analysis.

These steps will prepare your case but will also help establish dashboards to allocate resources for future projects.

1) Identify the processes you think are most impacted by poor data quality . The processes should be tied into key business functions. For instance, in marketing you may want to look at lead qualification and management. Processes that are well defined and have a tangible link to businesses objectives work best as they are most likely mature and revenue has been tied to them.
2) Pinpoint smoking guns in the processes.  There are bound to be several points in a process that are key indicators of success where data quality has negatively impacted the outcome.  Your business analysis will or should show this clearly.  These smoking guns should be called out clearly in the processes.  What you should determine is which data elements are impacting the most and can be easily focused on or addressed.
3) Select data quality issues that you can segment the process into influence tracks.  This step is critical to measurement.  You need to dissect the process to create scenarios of what good vs. bad looks like in process outcomes.  In the lead management process suggested earlier, it could be the point where you would qualify a lead to move into the sales pipeline.  
4) Measure performance success with good quality vs. poor quality data.  At this stage you should be able to run an analysis that shows the difference in process outcomes and performance when you run scenarios between good quality data and poor quality data.  

The real benefit is that at this stage you’ve provided the dashboard to measure improvements to the business.  Rather than wait until the data quality projects are completed, this provides the foundation for predicting where you will get the most impact from your investments. Instead of focusing solely on metrics that measure the completeness, accuracy, and uniqueness of records, you can focus on how these metrics within processes influence business outcomes.  Now you have a case for linking data quality with ROI.

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Metrics and ROI: Bonfire of the Vanities

“Is social media effective?”

“How do you measure ROI in social marketing?”

“What KPIs do you use for social media?”

Sounds familiar, right?

Inevitably, when you see someone talk about how to measure social marketing effectiveness you have someone focusing on hits, page rank, sharing, links, and the like.  Then, another voice comes in saying that is is about the business outcome, metrics should tie to business objectives.  A third pipes in that you can’t reabigstockphoto_adjusting_the_data_1234568lly measure marketing to revenue, it’s too fuzzy.

This was evident in a post from Chris BroganMoving Needles.  He mentions several things to look at and what they indicate.  Then, someone commented that social media is a tool and that KPIs that exist today are still valid for social media.  What the needle measures never changes.

Well, everyone is right, and everyone is wrong.  It depends on what your role is in monitoring social marketing effectiveness.  Are you the direct marketer, PR person, the web manager, a program director, or a marketing executive?  The difficulty in all this is that everyone has a different way that they measure their own effectiveness.  Each is silo-ed.  In fact, many times it is the function that defines what the metric is for success rather than CMOs driving the scorecard and dashboard.

Successful measurement of social media, as with any marketing tool, is the ability to take tactical metrics, see how they link to KPIs, show how KPIs drive business outcomes, and then be able to predict how changes in strategy and tactics fuel the cycle again.  Simply showing the end result of marketing effort contribution to business outcome is great for marketing executives.  But, marketing managers, web teams, and specialists need more detail to manage the tactics that drive business outcomes.

As it pertains to social marketing, I think it is opening up things that should be measured as part of web marketing that hasn’t been looked at before.  Web marketing has always been internally focused on website hits, traffic patterns, and how visitors enter the lead funnel.  Social marketing is opening up an understanding of how word-of-mouth influences website visits and brand interaction.  So, it goes without saying that things like trackbacks, linking, conversation, and bookmarking are important to watch.  What we need to figure out is how do these new metrics fit into our dashboard framework to measure impact on desired business outcomes.  What is also important is that some of these metrics may be better to use when looking at our traditional web mediums.

So, while I agree and continually evangelize the need to have marketing executive dashboards that ensure marketing is aligned to business objectives, de-emphasizing web stats that contribute to outcomes won’t help manage effort and resources.

Related articles:

Social Media Metrics: ROI or Just Numbers

Conversational Preference in B2B Social Media

Web Metrics Don’t Cut it for Social Media

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Social Media Metrics: ROI or Just Numbers

I’m looking at various ways people are trying to attach social media marketing metrics to ROI.  Some of the insights being provided leave me wondering if we are really measuring ROI or if it is just reach within the online community.

Leading the way on social media metrics is Networked Insights.  Their measures of interactions looks at reading, rating, sharing, linking and inviting is one way to determine impact.  They are coming to be the source of social media metrics as Nielsen is for TV ratings.  They released two grids of information connecting off-line media with social media – one in October looking at TV ratings and social media interactions and the other with Superbowl ads and social media interactions.  If you’ve been tracking, I’m sure you’ve seen these.

I’ll say this, I love the numbers coming from Networked Insights.  It really puts together an easy way to monitor and measure social media.  However, there are a a number things that bother me with how the metrics may be used as well as inherent bias in these numbers.

  1. On TV ratings: Interactions are a measure of topic interest.  Viewership is about a single event.  The program is a catalyst or topic of discussion.
  2. Advertising winners in the the Superbowl ads are more closely related to social trends as opposed to real marketing effectiveness. Winners are associated to key events in people’s lives: jobs, taxes, Valentines Day, need for money.  Many of the losers are for big ticket items that are already hurting.  The only one that stands out is CareerBuilder vs. Monter.com.  The other point is how much social media marketing is available for thes loser brands?
  3. Inclusion of “reading” in the interaction metric is a huge bias.  This is like saying that someone that opened an email is really engaged.  In terms of ROI, there is no value in “reading” unless there is an outcome.  I think this inflates the ROI value of a social media property.
  4. Interactions to rate a program are biased based on the overall bias of social media community.
  5. Interactions as a rating don’t account for the fact that some programs have more emphasis and effort on generating social media buzz and interaction opportunities.
  6. The Social ROI score is great if you are focusing only on the online interaction conversion.  But, the real goal of marketing spend is to convert to purchase.
  7. Each of these reports is focused on lift in a specific point in time.  Real ROI is over the course of a sales cycle.
  8. Are these interaction unique individuals, households, or an overall impersonal and duplicative/exponential number

When leveraging social media metrics such as provided by Networked Insights, it is important to remember the business objective you are trying to attain rather than just the number of impressions and interactions in the online world.  How do you tie these metrics to your business objectives?  Ultimately spend on social media needs to generate a financial gain to the company either directly or indirectly.  Similar to traditional marketing vehicles, we must start to recognize social media interactions as part of the strategy rather than just the strategy.  So, when we do measure, it connects to what we are really trying to accomplish, growing our business.

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Web Metrics Don’t Cut It For Social Media

Social media has not yet provided marketing concrete effectiveness as it relates to sales.  Maybe the issue is that we have yet to embrace the role social media has in our marketing mix and use metrics that are aligned to the venue.  Social media is not a stagnant website.  It is not in our control.  This is a cyber world reflecting our customer behavior.  Where in the past we could shape our customer environment through television, radio, and stores, in order to enter social media networks we need permission.  We get that through influencers.

Here is where I’m coming from…

The 3rd Annual Marketing and Media Survey Results are in andyou can see the struggle marketers are having with social media in their marketing mix.

Jacob53 on Twitter comments:

“One of the most interesting findings of the study is that while over 70% of the companies plan to include Social Media in their marketing plans, only 49% believe that Social Media is actually effective.”

How ironic.  So, I dove in deeper through the reports.

First off, one result popped out that confirms an earlier report from Marketing Sherpa of lack of knowledge around social media.  It appears that marketers may not be thinking about social media as a tactic that is integrated or intricately connected with email, a primary marketing vehicle.  The fact that 67% think search complements email makes me think that vehicles are considered independent, developed independently, and used independently of one another.  You could argue that this is wrong because social media is number two at 54%.  But, then you see that number 3 is display at 51%.  This seems to indicate that marketers consider these all push vehicles.  Is the reason why social media is considered ineffective is that we are using it and measuring it incorrectly?questions_email_033

A survey conducted by Deloitte, Beeline Labs, and Society for New Communications Research (SNCR) shows exactly how companies are measuring social media.

Key Business Measures:

  • Greater awareness
  • Number of new ideas
  • Increased sales
  • More referrals
  • Number of new leads

Key Web Metrics:

  • Number of visitors
  • Number of “active” users
  • How often people post and comment
  • Number of registered users
  • How often people visit

Let’s get back to the purpose of social media and networks.  It’s to connect with friends and like minded individuals.  Providing a venue for your customers and you to interact is a good first start.  Ultimately, you want work of mouth outcomes and key influencers to rise within your venue.  Additionally, when you interact with customers in their own venues, conversations and bonding need to occur for trust to form and word of mouth to happen.

Since I like numbers and metrics, let me through this one out.  According to Deloitte, Beeline Labs, and SNCR, only 54% of respondents had actually been running a community.  If this is an indicator to social media marketing efforts in general, we are only getting started.  Building relationships takes time.  If you consider that startups don’t expect any real results from their efforts until the second or third year and they are using the first year to build a foundation, then this is a good proxy for looking at social media’s overall effectiveness.

If we want to determine that social media is working, we may need to look at different metrics other than the ones we currently use to show how we are contributing to pipeline.  The metrics we look at should revolve around the behavior and interactions that happen within social networks, just like we analyzed how shoppers make decisions on what to by in grocery stores.  A shopper moves through the isles looking for items on their list.  The placement of brands and pricing is within the shopping behavior for easy identification and selection.  There are outside influencers like online and printed coupons, TV ads, radio ads, etc.  Translate this experience to the social network.  Instead of using ads, coupons, and online circulers to influence the purchase, you are looking for influential people.

Ultimately, you need to determine metrics that measure an influence factor within your community.  If you have a lot of traffic but only lurkers gathing data point, you missed the opportunity for someone in the comunity to shape those data points with your lurkers.  This community member can be you, but  in the end you need an influencer.  It is similar to a sales engagement.  Decision makers may not actually be the one determining what to purchase, but focusing on fixing the problem.  They have key influencers that they leverage to gather information, summerize, and make a recommendation.

You can continue to track visitor and membership metrics, but without understanding who is behind these visits and how they evangelize or not, you will never be able to measure social media effectiveness. You are back to gathering leads that no one will follow-up on because they are not qualified.

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Web 3.0 Equals Big Bang

I’m going to go out on a limb and make a prediction.  Of course, as soon as I post this it will be wrong.  But, here it goes.

Web 3.0 is about convergence of people, information, experience, and personalization that is traceable and trackable. What we are left with is an online environment that is tailored to an individuals profile and experience with feedback provided in a consolidate form for ease of increased personalization, metrics, and analysis.

As a marketer I’m excited.  Really excited.  I don’t have to push messages but set them up and allow market profiles pull them to any receptor be it a browser, email, phone, etc.  Not only can I push content and message or have it pulled by profile seetings out to receptive audiences, I can get immediate feedback either in the form of viral promotion or conversion.  Instead of managing multiple tracking sources to understand my marketing impact it happens instantly allowing me flexibility and agility in my campaign strategy.

What is missing today is enough information about individuals to create a meaningful experience and relationship.  I can target in broad segments or even micro segments.  But, personalization is still allusive except at a superficial level.  What we’ve been able to achieve on our own websites through cookies and/or profile registrations, will be realized through Web 3.0 conversion and analytics.  And if you have comprehensive analytics, you can apply prediction techniques for content and behavior.

Here are some things that I’m seeing being discussed in technology circles that make me lean in this direction for my prediction:

In a recent post by ExecutiveBiz Blog, a site dedicated to covering business news around Washington, DC, 10 leading CTOs forecasted the trend for 2009.  4 out of 10 had their eye on collaborative, data intensive trends.  What I find interesting about this post is not only the predictions, but that they are coming from CTOs that support government IT initiatives.

  • Gil Miller, Noblis:  Personalized tools to extract information and knowledge from large data sets.
  • Brian Neely, American Systems:  social systems, cloud computing, human computer interfaces
  • PV Puvvada, Unisys Federal:  transparency of information through web 3.0 technologies
  • Dave McQueeney, IBM US Federal:  systems that track business outcomes

At a Web3Event conference in October, there was an interesting discussion on improved database technology to support Web 3.0.  Presented by Dr. Jans Aasman, CEO, Franz, Inc., he sees a database that is graphical and spatial in nature that allows profiles to scale, intersect, and relate in time to one another through events.

Am I out there on this?

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