Causality Is A Bitch: How To Measure Relationships In PR
During a seminar I held the other day on how to measure PR activities in social media I got the classic question on whether or not you can measure relationships.
The answer is, yes you can.
You can put a price tag on anything you want.
The fundamental question is however if the number on the pricetag is helping your business to move forward — or not.
Not everything that counts, can be counted. And not everything that can be counted, counts.
— Albert Einstein
If all you care about are converting traffic into sales, there are ways to turn effort into money in absolute numbers.
The problem is however, that business value comes in many shades of grey these days.
A successful relation could lead to increased brand awareness on the market, thus inducing long-term increases in sales, but as long as influence takes the long way round, it’s extremely difficult to isolate key factors.
Or to put it into one scary and for most of us academic word — causality.
Causality Is A Bitch
Decisions are made out of both rational and irrational processes.
Someone could decide on a purchase of a specific consumer item online, but then simply change their minds towards a similar product from a competing brand, just because the weather outside changed their mood or chain of thought.
And well on location in the specific store, they might as well pick a similar product from a third brand, just because it seemed very fine and shiny.
In order to influence human beings as the irrational creatures of die hard habits that we are, you need to embrace an holistic view on marketing.
Relationships requires an holistic understanding
A relationship is a complex phenomenon, but you sure can get a lot of value out of a good one! If we regard the relation as a simple transaction model, we recognize that different entities enter into relationships for different reasons.
What seems invaluable or abundant at your end, might be valuable or scarce at mine — and vice versa. So we transact.
Therefore we need to view, and measure, relationships from a value perspective instead of a monetary one.
Brands are often way ahead when it comes to being creativy on how their products and services can add value in the everyday lives of their consumer.
But what about the other way around?
A consumer doesn’t just buy a product or service. They buy social status, lifestyle, and overall maslowian feelgood.
This is great for brands, because it creates opportunities for them to create and develop products and services which add more value than what the creation process costs them.
What’s the bottom line of business?
So what do the consumers have to offer in return?
As far as most brands are concerned, the consumer can basically offer them just one simple thing, money. Cold hard cash. Nothing else interest them, really.
And as far as relationships goes, I can think of a some human to human relationsships where the same dynamic applies — and it’s not pretty.
They are not really interested in your feelings, your input, your ideas — they just want your money.
They can take that other stuff too, for marketing purposes, but never as payment.
Still they want the consumer to pay premium for all the extra added value.
Turning Economics Into Socialnomics
As the socialization of media is becoming a visible blueprint of public opinion; we can see clearly that custumers don’t appreciate being regarded as cash cattle by their favourite brands.
For most companies the battle is won with every consumer, but for the consumer, the same battle has only just begun.
Then how much to invest in a relation?
Here’s where that pricetag suddenly becomes so important.
And here’s where economics turns into socialnomics.
Because in order to make ends meet financially, you need to understand what the numbers represent in terms of value.
“The Significant Other” Analogy
Maybe you have a significant other? Think about how that dynamic works.
Since relationships are complex matters, you are probably never get everything right — and that’s quite normal. Expectations change over time and the element of irrationality constantly plays tricks with us.
Transparency and win-win might be issues easy to solve in theory, but difficult in practice.
Making a relationship work lies not in never ever screwing up, because let’s face it – we are dealing with human beings.
The real problem for the relationship is when there’s no learning in the process. If there’s no learnings and adjustments over time, then even the slightests of screw-ups will doom the relationship.
For an example, it’s allright if you fail to listen to your significant other once or twice. He or she will probably still have affection for you and your relationship can probably recover quite easily.
But if there’s no progress whatsoever, then it’s just a matter of time before he or she will get the hell out of Dodge.
Measuring outcomes of social media – and PR in general for that matter – is just like that.
You need to know if you’re doing the right or the wrong thing and if the value at your end is the long-term value that you are looking for.
Finding The Right PR Metrics
All models are simplifications; that’s in essence what’s makes them useful as models.
Measuring PR outcomes will always be flawed by causality problems. But that doesn’t mean that you can’t learn from what you do.
In order to distingiush between different gains for a brand working with implementing their PR strategy in social media, I’ve created a four-way model for learning from the process of creating value:
- Reactions (level of engagement)
- Impact (momentaneous effects)
- Reach (level of trust)
- Convertions (change effects)
Working with more than four different metric categories will add more complexity than it adds value to your learnings, working with less excludes imoportant knowledge.
Mashing these metrics togehter creates confusion and actually destroys the possibility to draw conclusions from the data.
In this case, the correlation to hard cash can be derivated from the convertion metric.
When a brands starts to work with social media strategically, the number of convertions (for instance into sales) are probably quite low compared to the investment. But the convertion rate might be high!
Given the other metrics, brands can learn that investments will break even and start to pay off, given that these other metrics are showing that the right things are being done.
If you for instance see that convertion rates are high as well as the level of engagement, then you might be better off investing in reach rather than momentaneous impact.
Beware Of Advertising Traditionalists
All marketing activities should be measured in the same way, some say.
Otherwise, how should we know how to allocate budgets for different marketing activities?
That’s a fair argument. But the truth of the matter is, that other marketing disciplines must develop their metrics as well, instead of trying to impose their lazy metrics onto a world of digital complexity where the relationship with the customer is the bottom line.
And while we’re all at it – why not make it easier for customers to spend more than just their money?