The New ROI -- Listen, Learn, Adapt: Return on Insight - Does it work for nonprofits?

Photo by Jeff Pulver

David Armano has an article on BusinessWeek called "The New Focus Group: The Collective" where he urges companies using social media to make the last word in ROI insight, not investment.  The process is: Listen, Learn, Adapt.  He is describing what an organization with a "learning organization" culture does and applying it to social media.  He makes the analogy that the process of mining the data for insights is akin to anthropology and that the team should be "digital anthropologists."

When I've been talking about ROI and Social Media - I make the point that the most important part of the process is looking at the data to figure out how to improve.  I used the Einstein quote, "Not everything that can be counted counts, and what counts can not be counted."  My point was that the qualitative insights are just as important to hard data points.

But I love the phrase, "Return on Insight." 

It might be difficult for the nonprofits to drop the word investment and replace it with insight - only from the point of the view that the word "investment" translates in donations and funding.  And usually have to submit reports that demonstrate "impact."  Nonprofits need to learn the insights and also understand the value of the investment. .

Nonetheless, the reflection questions are very valuable and important to incorporate in your strategy planning and reflection process.

1. Are you actively listening to your customers in the places they frequent online?
2. Are you launching initiatives that can be easily updated? Are you enabling a "culture of rapid response?"
3. Are you evaluating current processes and updating them as needed?
4. Are you building a culture in which "failure" is acceptable?
5. Are you allowing your teams to create "pilots" prior to scrutinizing them through traditional ROI exercises?
6. Are you planning initiatives that will help your organization learn prior to backing major marketing campaigns?
7. Are you synthesizing qualitative insights in addition to analyzing hard data points?
8. Are you tweaking your strategy along the way—and adapting where change may be needed?
9. Are you empowering all members of your teams to think and act like "digital anthropologists?"
10. Are you evolving the tools and methods to measure success (i.e. going beyond clicks and impressions)?

Resources

David Armano, The Collective Focus Group Paper
Beth Kanter, How To Think Like A Social Media Marketing Genius
Beth Kanter, What Are the Best Metrics and Reflection Processes To Improve Your Blog
Beth Kanter, Social Media Listening Wiki
Maddy Grant and Lindy Dreyer,  Got Your Listening Ears On?
Chris Brogan, Listening to Blogs, Really Listening

Comments

[Shefaly]

In an ideal situation, I would like to believe that this is a feasibility. The ideal situation being the measures being 'measurable' or quantifiable. With due respect to Einstein, he did not really have to answer to stakeholders much, did he? :-)

On the qualitative measures, I would think an approach proposed by King, Keohane and Verba (which I used in my PhD research as well) might be of use. The idea is that the granularity in the quali measures is so high that the measures approximate to quantitative/ quantifiable measures. We can talk more about it if you like - or I could do a guest post on the concept and the emerging conversation may create some actionable ideas for you.

Thanks.

[Rebecca]

I like the return on 'insight' too, and I was wondering why... I think because it asks us to use both sides of our brain. Just as you said the other day, Einstein kept his violin in his office so he could play it any time. This shifting back and forth, opens the roadblock of getting stuck in our calculating brain part, and allows us to leap to new discoveries. We release the unconscious part of our minds to run with abandon.

[Amy Southerland (@wordjockey on Twitter)]

I think "return on insight" is a useful idea because it's thought-provoking and can stimulate interesting discussion.

But ultimately, in the ROI formula, I think of insight as a kind of return, not a type of investment, so the substitution doesn't really work all that well. When you invest in social media (dollars, resources, time), one of the returns you can get (perhaps better than anywhere else?) is insight.

I've thought about ROI and nonprofits a lot, as I was the lead writer for a report from the Nonprofit Roundtable of Greater Washington called Beyond Charity: Recognizing Return on investment (PDF here: http://www.nonprofitroundtable.org/media/downloads/beyondcharity.pdf). And now I'm working on a related report on how effective grantmaking is about investing more than money.

I think return on investment is a useful concept because it resonates with people outside the sector -- not only grantmakers, but government and private sector supporters/partners who we want to reach and have them grasp what nonprofits are all about and why they should care. The challenge isn't changing the words, I don't think, but helping people see that for nonprofits, what we mean by "return" -- and even what we mean by "investment" -- is broader or different than what ROI usually means to most people.

Nonetheless, this got me thinking, which is always good. And I definitely think social media offers some exciting new ways of looking at ROI (however you look at it!)

[Mark J. Carter]

With regards to the term "Return On Insight" it seems to work on a couple (much needed) levels.

Non-profits definitely need the "insight" as to why they're using social media in the first place AND what (specifically) they want to get out of besides saying "hey, we're using social media!".

Maybe it would turn out to be insight (why use it)? --> investment --> insight (what did we get, what did we learn, what can we do better next time)?

Then repeat the cycle.

[Susan/Together We Flourish]

I love all of the points you have made, but my favorite is number 4 because it stirred a memory of a boss I had when I was first starting my career in sales. We were all new employees for a start-up company and, of course, we all had quota's. We had quotas of sales to make, quotas of calls to make and many more. But the first report he wanted to see every week was the report that showed the number of mistakes we had made in the previous week. You see, he believed that if we were not making mistakes, we were not trying hard enough. It shaped my entire career because it taught me to step outside of my comfort zone and try. After all, if it was a mistake, at least I had something to put on my report.
Thanks for the memory