I have been interviewed on a topic I care very much about, that of measurement – I will post the link to the original article as soon as I get it. Given the fact it’s in russian, I want to save you from embarrassment by posting the english language version.
1. Why don’t you like the Return on Experience concept?
I am an engineer. I want to measure, but I only use NUMBERS, kilos, meters, liters. Ratios between sentiments or impressions do not fall in this category.
Marketing is guilty of having invented fuzzy measures that convey little or no meaning because they are not objective and repeatable and as such constantly rejected by customers.
In the good ol’ days of Television, marketing invented Audience estimates, based on a tiny number of “sample families” who intermittently used tracking devices capturing a small number of behaviours.
On these flaky data, marketeers built an edifice of shaky measures, ratios and advertising rates which made sense simply because there was nothing else available.
ROX is simply another attempt of making fuzzy stuff that is not fuzzy anymore
2. What are the main disadvantages of this concept?
It is an arithmetically precise ratio between two very fuzzy numbers; essentially, by tweaking the numerator or the denominator (mainly the latter) we can make ROX to be whatever value we want. Not objective, not repeatable, not universally defined and accepted. It’s like calculating a precise ratio of who loves the other more in a couple.
3. What do you use instead of it?
I use the Customer Lifecycle Value, breaking down the route from “completely unaware” to “advocate” in five states, measuring the yield of the program as the succession of five consecutive, simple to measure yields.
This interaction model must be carefully adapted to each case to reflect the reality of the buying process: for example, an unaware person can be made aware through advertising, and I measure this yield as the ratio of impressions to site visits driven by ads.
Later in the cycle, someone engaged e.g. in a game, can be driven to store to evaluate the product, and I measure this as the ratio coupons redeemed in the store to game participants.
4. Digital media allows us to measure a lot of things. How can we avoid the “analysis paralysis”?
Very true, since you can measure everything, you measure everything and are left with loads of data and no information.
You need a convincing model that reflects how an unaware person will turn into an active advocate (notice how I do not stop at “becomes a customer”); once you have that model you must identify a lever you can move up or down for each stage, depending on the value you read off a gauge. Once you have the list of the gauges you need, you will find them in the huge sea of measurable objects and disregard everything else : the aphorism I always use is
Measure ONLY what you can act upon
1. What is the future of social media marketing?
Some businesses can have an online-only proposition, but there is not that many of these: pure play e-retailers, games developers. The vast majority of businesses live and flourish on a number of interconnected channels where they meet and engage with the same customer set. Death and brimstone await those who consider separately each channel, so to answer your question with another aphorism: