RFE – a business metric we’ve been missing?
I have been working with various metrics around business, marketing, digital marketing and social media for quite a while. From my experience, this is not as easy and straight-forward as many people would think. Especially the new ways of doing business are changing the business models and thus the activities that support those models.
There are lot of dilemmas in creating a functional, reliable, versatile and easy to implement metrics. Many of the “old school” business metrics are measuring everything on “how much revenue it creates” or with metrics such as Return on Investment (ROI). This often dooms many new type of activities, where the activity is not creating additional sales at all. In marketing, such activities are often called “brand building” or “awareness creation”, and the metrics comes as one figure in brand surveys. Sometimes the argument says “this cannot be measured”.
Some time ago I was discussing the future of crowd-sourcing with Riitta Nieminen-Sundell of Sundell Insight Foresight in the UK. During that dialogue, we started throwing ideas about what would be measurable in when a company is investing in community dialogue instead of markets or customer segments.
We came up with the idea of metric called RFE (Return From Ecosystem). RFE would be a metric that can be set as an numeric objective for number of business and marketing activities and measured to see how various activities contribute to RFE.
RFE is a medium-distance metric, linking together short-distance metrics (such as metrics for marketing activity) and long-distance metric (such as revenue).
I will start working on the more accurate definitions, and publish my thoughts for your review. Feel free to start commenting, all contributions are welcome!