I have written elsewhere about the fact that social media marketing [SMM] is not free - as some ill-informed
commentators might suggest. To that end, I have wondered where the ROI is for any investment in SMM in general,
and Twitter in particular.
One company that has whole-heartedly embraced Twitter is Dell. Indeed, it is often held as a poster-child for the use
of Twitter as a marketing tool. Interestingly, it was another form of social media - blogging - which had a massive
negative impact on Dell, so much so that the term
Dell Hell
was synonamous with the company. So let's take a look at some numbers.
In an interview with Mashable in January 2010, Dell's head of social media, Richard Binhammer, said the organization had
100 employees Tweeting on behalf of the company. This comment followed an earlier revelation from Dell
[in December 2009] that Twitter generated over 6.5 million dollars in sales for the company.
Impressive figures to be sure, but does Dell get return on their Twitter investment?
Obviously, only the Twitter management will know the true numbers, but any business studies student should be able to
work up a theoretical spreadsheet to 'guestimate' costs versus income. First calculation is Dell's overall net profit
on the 6.5 million in sales. My retailing background gives me a ball-park figure - but Dell is a manufacturer
[assembler?] as well as retailer, so my guess would be just that; a guess. Whilst I appreciate that the Twitter costs
would be part of the net income calculation, let's be simplistic and see what those costs might be.
First off is the salaries of the 100 employees. As they - effectively - represent the organization in every tweet,
such responsibility should be rewarded with significantly more than minimum wage. Add to that 100 times their
employee costs [insurance and so on] and the cost of their PC, desk, chair and anything else they need to do their job.
Then there are the fixed costs of the building [or room] they use - including rent and maintenance.
My figures might be a bit off - but my spreadsheet isn't showing much - if any - profit.
However, as is the case in many aspects of an integrated marketing strategy - and as Mr Binhammer points out -
Dell's Twitter presence also fulfills a customer service role. Such input is notoriously difficult to quantify,
but only a small reduction in service-related phone calls to the organization would put the Twitter operation back
in profit.
A further point that has bothered me for time but I do not see being debated is that of the 'Twitter-monitor' being
a cheap way of catching complaints. No, I'm not pointing at Dell, but might a new organization decide that after-sales
service is expensive, let's just watch Twitter and react to complaints when they arise? This builds on my long-held
belief that if you offer a quality product or service [and after-sales would be an integral element of 'quality']
then you do not need to worry about complaints. This point is part of an article by David Bowen
[How Twitter will corrupt contact]
in which he also raises the issue that if an organization relies on Twitter as its a primary medium of
communication then its managers are taking the chance of holding themselves up to ransom from 'complaining' customers.
