Outlay vs. Outcome: Why I need to diet AND exercise (or, why is “purchase intent” better than “likes” or “retweets”)

Classical scene in our house post any exam for the 8th grader child: One parent checking child’s answer against question paper. Child ofcourse answering to less-than-parent’s-satisfaction. Parent in glumpish/ lecturish/ sad/ disappointed mode. Child whining – but ma, I STUDIIIEEEDDDD – for TWO hoooouuuurrrrssss….

Actually mirrors my own scenario to a certain extent with the whole aerobics/ swimming business. I began attempting to get some exercise the beginning of this year (for the first time ever, I may add). Some 46 weeks later – very very very very marginal reduction in inches and kilos.

(Credit)

Reminds me of our early partner calls running our start-up, when we would each ask the other partner – so, what’s the sales pipeline looking like. And, one of us would always say – see, I called company XYZ, tried to catch person ABC, attempted to get a meeting with so and so….

What’s common between each of these? Effort – Much. much. much. much…. Result – Zilch. zero. zip…

The point is, most of us very often kind of give sop to our consciences saying – I put in so much effort – I studied x hourse/ did y hours of community service/ made so many calls/ research so many papers. NOT IMPORTANT – what IS important is – did you achieve what you were trying to? Did it have the required outcome/ the impact???

Honestly, if it didn’t, your effort went waste! There is a saying – don’t just work hard, work smart. It’s to do with this outlay vs. outcome thing. ROI is a key metric most smart organisations measure – how much “bang for your buck” are you getting? Are you able to get higher turns out of your resources – inventory/ capital/ people time…and, the only way to do it is to be efficient/ smart/ outcome focused.

A good tool to measure this is a time sheet – I remember in the early days of our startup, we four founders decided to fill up time sheets – one week into the game, and i had trouble accounting for my 18 hours that i burnt the midday and midnight oil at. It was astonishing for how many of the hours, I would have probably put in “email” and/ or “internet”…(ofcourse, we were a virtual organisation, hence email was important; and we were a secondary research oriented org, hence the internet was inevitable) – but still, eye opening!

It’s a classical HR conundrun also – do you hire/ keep the “well intentioned/ great attitude” employee, or the “expert” one – who probably comes with all kinds of baggage of maintenance. A smart company actually hires a mix – and the managing of this mix determines the success or not of the org.

Interestingly, this is counter intuitive advice from what the Bhagwad Gita (a well known Indian tome) gives you – Karmanyevadhikarastey, ma faleshu kadachana – means keep focussing on your work, don’t worry about the result. (looks like this has had a great impact of me one way or the other – I just realised I used it in a completely different context in an earlier blog). I think, it would have been better if Krishna said – “work ofcourse, but work towards a goal – results will come, so don’t worry about them” :).

I saw a depressing example of the flip side of this advice actually a few days ago. As most Indian corporates know, recently the Companies Act got revised, and it now includes a provision that companies have to show spend of 2% of their net profit on CSR activities. A friend (and former co-founder) now actively in the CSR space wanted to pitch advisory services to firms about how to make use of these “mandatory” funds to make an impact. The finding in most cases is, that companies don’t really care about impact – they care about the “doing” – so, its all – “We Spent XXX Volunteer hours on CSR activities” – OoooKaayyy, what did you achieve? “uh-duh…who knows, who cares, how do we find out, why should we measure”! Kinda defeats the spirit of the act, don’t you think?

Another corollary – the whole Social/ Digital Media ROI piece – most folks are chasing likes/ retweets/ shares – and calling it engagement. Sure, these are good goals to chase as a FIRST step – but thats all they should be – a means to an end. Unless it translates to actual brand health KPIs – like, consideration/ purchase intent/ recommend-ability, loyalty…its all so much “feel-good” stuff.

I read this interesting article recently on HBR – pretty much says the same thing; slamming “being slammed/ busy/ neck deep in work” on grounds of outcome vs. outlay, worth a click.

What’s the solution though – how do you make sure you keep end objective in sight and don’t get bogged down by the effort. Most of you management sorts probably HAVE the toolkits, for me, a simple daily checklist worked well (I loved the ticks against each completed task) – but this daily checklist needs to get collaborated against yr monthly / quarterly/ annual goals. (It’s end of the year, folks – I’m sure many of you are now filling out “traffic signal” sheets against goal achievement? ).

For weight loss, I’m onto a protein only, no carbs diet for some time starting, uh, tomorrow? 🙂 (I see with my own eyes the much better effect of a combi diet-cum-exercise regime on my aerobics classmates everyday!).

Credit

Regarding kids, and how one makes them goal oriented, and not effort oriented – well, I have NO answers! (Its amazing how the simplest parenting problem is so much more insoluble than the most complex corporate one isn’t it?) Anyone with any idea, DO PLEASE pitch in!!!!

How to Create Social Media KPIs : The Science of Indices

Yesterday my nephew, who is an earnest young brand manager in a lifestyle/ accessories Indian brand, was staring at his computer. When asked why he was looking so perplexed, he said – We’ve created this really nice campaign on facebook, which is engaging as well as makes a very powerful brand statement. Its also a first of its kind we think. Problem is – I am not sure how to figure out whether it’s doing well, and my bosses – all they are saying is – have you doubled your “likes”?

As we all know, he is not in a minority – everyone on Social Media is chasing the ROI holy grail.

But, I really think in our quest for this elusive target, we are tending to overcomplicate Social Media.

Sure, “likes” is too unilateral and limiting – especially when facebook doesn’t allow dislikes. Everyone also knows we should also measure sentiment – positive or negative. But then comes “response” which signifies “engagement”. And then there is also “relevance” – given that Social media has a) so much spam, but also b) so much that’s just random thoughts/ opinions/ rants that either don’t give you an insight into your brand, or don’t meet the objectives you have set out for your campaign.

So, what do you do? Its simple! You create metrics for each such that you can individually measure each parameter that you want to measure.

But ofcourse, there’s the C Suite who want your elevator pitch on – how are we doing? (3 seconds does NOT allow you to say – weeellll, on likes we are better than January, but on engagement we are slower…and sentiment is half positive – half negative – and the rest neutral (yah yah I know – it doesn’t add up!). Your CMO is going to walk right out of the room.

Hence, you create this snazzy sounding “Index” – you can name it ANY godd#$% thing. Integrated Performance Index (sounds even cooler as an acronym IPI ☺ )/ Social Media KPI/ Virality Index (I used that in the old days)/ Brand Health Index… / Campaign Success Index…

What is the Index finally? It is a multi attribute weighted number (remember I had said that most management professionals must be grateful to BCG for the 2 by 2 matrix? So also should a lot of folks thank the guy who invented this decision making methodology. So, you take whichever parameters you think you should measure, ascribe weights to them, and derive your index out of the weighted average of these numbers.

Simple? A-ha! The complexity really resides in WHAT parameters to choose and, more importantly, WHAT weights to ascribe. (A quick google to get some actual statistical validity here brought me to this complex article called “On the convergence of multiattribute weighting methods” in the European Journal of Operational Research – for those who are so inclined, please delve into the advantages of the ratio vs. the swing weighting vs. the tradeoff vs. the pricing out method ☺ )

But statistical theory apart, this above is what is the most important factor in getting the relevance of your index or KPI. The weights of each parameter really depend on a few things:
a) The marketing objective of the campaign/ channel – Is it to spread awareness, to engender better knowledge, to direct towards trial, purchase or loyalty – different objectives will have different weights
b) The product category itself – Is it an introductory/ launch category; a growth one or a stable one – where exactly in the PLC does it stand
c) The competitive scenario – how active or inactive are competitors (both category competitors and mindshare/ walletshare competitors) in the social media space – what is the clutter out there that your campaign has to break!
d) How much effort – time/ money/ people are you investing behind the campaign – actually, this is a bit of a circular function as this will to a certain extent depend on the marketing objective – atleast in the ideal scenario

All the above will help deciding weights – the allocation is however likely to be a bit of an iterative situation.

So there you have it – your quick and easy guide to creating your perfect unified/ integrated KPI for your Social Media Campaign (or for that matter any other). Where’s my consultancy fee?

Meanwhile, lemme go see if my young nephew created the right algorithm to keep his bosses happy ☺