Matt Ridings is one of the most intellectually challenging and entertaining friends I have made on Twitter. During a recent debate on {grow} about social media measurement he chimed in with such a smart counter-point that I wanted to provide it as a feature for the entire {grow} community …

Guest post by {grow} community member Matt Ridings

Social media measurement. This is a seemingly simple issue, with a complex point.  Or perhaps a “nuanced” point is more accurate.  I’m obviously a believer in data, it’s a big part of what I’ve done over my career.  So to be clear, trying to measure whether something has a meaningful impact is something I am in support of.  And you should always measure … unless you shouldn’t. Here is what I mean …

1) Spreadsheets should never be a substitute for business instincts.  Too many fall back on spreadsheets as means to avoid risk and accountability.  Thus using ROI is an excuse not to move forward with something they don’t understand.

2) Sometimes there is no ROI to measuring ROI.  Just because something *can* be measured doesn’t mean it *should* be measured.  If the cost of trying to measure an activity outweighs the gain of the activity itself, or eats too far into that gain then why would you measure it?  It doesn’t mean there was no gain, it means you have to make a decision based on more than spreadsheets as to whether you can mentally correlate enough benefit to quantifying the activity to continue doing it.

3) Understanding appropriate time horizons and objectives is critical. Numbers mean nothing if you aren’t balancing them against proper expectations.  If you don’t have a solid, educated theory as to how long an activity should take before it starts showing its full benefits (in a relationship driven economy the long tail activity becomes the norm so this becomes even more critical) then how can you know when to make a decision to stop or increase that activity?

4) Achieving a return on an activity is meaningless without a knowledge of the return on activities you *could* have been doing.  Companies have limited resources, they can’t do everything, so they have to maximize those that they undertake.  Getting a 20% return on something is a failure if you needed a 40% return to make it a viable alternative to some other activity that gets 30%.  So “achieving an ROI” isn’t the same thing as “achieving success.”

5) Understanding the impact of measurement, both positive and negative, is also critical.  Measurement itself impacts the behaviors and decisions inside the organization.  How does the measurement motivate or impact the individuals?  Does it do so in ways that are beneficial to the customer or in ways that benefit the company in the short term but cut its throat in the long term?

I’ll stop there, but the point is basically “It’s not whether you measure, it’s whether you understand what to do with it.”

Agree?  Would love to hear your thoughts on “rational measurement!”

Matt Ridings, aka @techguerilla, is the co-Founder and CEO of SideraWorks, a new Social Business consultancy founded with Amber Naslund.

 

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