twopointouch

Forrester research consultant Charlene Li has begun a project to address the important issue of calculating the ROI of business blogs. It’s too easy to simply say “blogs are good for your business because X, Y & Z”. That statement may be true, but when the hard-nosed Financial Director wants to know why you’re spending all this time and money on writing a blog, then you need a better answer. You need a way to measure - in specific terms - the revenue and savings generated by your blogging efforts.

Li has previously been quoted as saying that her blog could be associated with $1mn of revenue at Forrester, but ended up regretting having said that: “it’s a highly subjective, qualitative measure that’s hard to measure”. So how do you arrive at solid figures?

As she says, the benefits you measure depend on the reasons you started to blog in the first place. If the point is to drive sales then you have one metric - traffic from the blog to your point-of-sale; but if the point of it is to generate buzz, then you might develop a formula based on your Technorati ranking. She suggests taking the metrics you already use to measure the success of aspects of your business through more traditional marketing and PR efforts and adapt them to your blogging activities.

There’s also a very handy table categorising some of the different benefits you might achieve for your company from blogging, and how you might measure them:

Benefit	Appropriate measurement
Consumer self-education	Higher conversion rate for blog visitors
Greater visibility in search results	Increased traffic from search to blog
Lower the cost of public relations	Generate the same level of awareness as PR
Reach an enthusiast community	Lower cost communication tool
Address criticisms on other blogs/news stories	Measure the slow down of bad news spreading
More responsive to consumer concerns	Track customer satisfaction and retention
Improve employee innovation and productivity	Track employee satisfaction and retention
Improved stock price with greater visibility into the organization	Connect improved investor sentiment to blog readership

Of course, it can often be more difficult than that. If you blog to be ‘more responsive to customer concerns’, it might not be very easy to separate the impact of your blog from other influences. Perhaps your product got better; perhaps you’ve employed someone really good in support; perhaps someone else is blogging tips about your product.

This is a fascinating project, though. Charlene and her team are looking for figures and case studies to flesh out the concepts and attempt to add some proof. I’ll certainly be following its evolution with interest.