Chapter 5

Measuring the Value of Relationships

If civilization is to survive, we must cultivate the science of human relationships—the ability of all peoples, of all kinds, to live together, in the same world at peace.

—Franklin D. Roosevelt

So by now, you should have a dent in your head from the hammer we’ve been hitting you with—relationships are valuable. In this chapter, we talk about a framework and an equation that you can use to uncover the value of someone in your audience, to help you understand why short-term selling (especially through social) may be undermining the long-term success of your organization.

Relationship Energy

We know relationships have value, and we believe it is important to an organization to develop relationship goals and invest resources to nurture and build engagement with their audience(s). But we aren’t myopic. We recognize that in embracing the importance of relationships, any organization is committing time and other resources. So we knew that we needed a method to determine a return on that investment. We need to understand, measure, and manage the value of relationships. We need to understand how much relationships are worth to the organization.

Recognizing that need, we have developed a system to measure the “energy” of the organization’s relationship network. We have coined the term Relawatt (yeah, maybe a little corny, but it gets catchy after you use it awhile). Relawatts measure the strength of an individual’s “relationship energy,” and by combining the Relawatts of each individual in our network, we get a sense of the value of the entire relationship network. Relawatts help illustrate the importance of nurturing relationships, provide a justification for investment, and consequently warn us of the cost of damaging our network with misaligned engagement. We use misaligned here because the most damage to digital relationships is not done through engagement gaffes (i.e., the slip-up by an organization’s social media person), but by engaging with an audience without taking into account their relationship needs.

Understanding the Relationship Network

Before we can dig into the worth of all relationships, we need to understand how individual relationships connect to form the relationship network.

Elements within a network can connect in many ways:

• Serial. Elements are connected one after another and are only aware of two relationships (behind and in front).
• Parallel. These are serial networks that run alongside each other but are otherwise unrelated.
• Distributed. In this network, elements can connect to each other across any part of the network, meaning that each element within the network can have a relationship to any other element.

When we think about the digital world, and especially social networks, relationships follow a distributed arrangement. Any person within the network can know anyone else and individuals can know of each other. This is often referred to as the degree of separation. (See Figure 5.1.)

Figure 5.1 Degrees of Separation

Source: Wikipedia.

A common theory of separation is the “six degrees” theory (based on a number of experiments and academic work done throughout the twentieth century on the “small world” phenomenon), which postulates that anyone can connect with anyone else through six other people. As we mentioned in Chapter 3, a well-known form of this is a game called “Six Degrees of Kevin Bacon.”

But employing a six-degree equation on your social networks really only reveals one aspect of the value in those relationships—the number of direct and indirect customers. The other part is in the amount of activity between connections. For example, in Figure 5.2 (produced through an analysis of email activity in Jason Thibeault’s Gmail account from March 2013 to September 2013 using the Immersion tool developed by MIT1), we can see that larger circles represent people with whom Jason was interacting most frequently. But in many cases, those emails also included other people with whom connections developed. Although this isn’t a social network, its structure is identical (where emails would be replaced with social interactions like Facebook comments, retweets, or direct messages).

Figure 5.2 Email Activity Between Jason Thibeault’s Connections, March 2013–September 2013

This is only one individual social network. What would this look like if it comprised multiple social networks? Because there is no tool available yet to do this, we have done it conceptually by assessing a few of Jason’s contacts for three social networks—Facebook, Twitter, and LinkedIn. (See Figure 5.3.)

Figure 5.3 Jason’s Friends Diagram

Source: Limelight Networks.

It is not hard to see how this not only gets complicated, but also becomes difficult to measure. Which of these relationships is actually worth nurturing? Which can safely be ignored? Which people are in what level of the digital relationship pyramid, and what are their relationship needs?

Even with digital technologies, the massive scale of the connected world means it is going to be impossible to provide the perfect relationship interaction to meet every individual’s need at every moment in time.

Relationship Value Equation

Measuring worth, then, is critical. If the network is so big and expanding all the time (as new connections are added), it’s a commitment of resources to engage everyone. And let’s face it, the kind of approach that involves hiring people to engage with connections in your relationship network doesn’t scale when the network gets to even tens of thousands. Therefore, we created an equation that you can use to determine the relative “energy” any given relationship has. This will allow you to target specific individuals while simultaneously engaging with the general audience in an attempt to drive up the energy of other connections.

We have dubbed this the “Relationship Value equation,” which measures the “Relawatt” value. The concept is simple:

• Determine the number of connections each individual has developed. This represents “reach” in terms of influence. Obviously, an individual with more connections has more opportunities to influence.
• Determine how often an individual engages. Have they written three responses over the past month? 10? 100? The frequency of responses is indicative of how much attention they are spending.
• Determine the depth, or amplitude, of engagement. Frequency of interaction is important, but more thoughtful interaction may have more value than simple one-word answers. Comments may have more value than “likes” alone. Retweets may have more value than “favoriting.”
• Determine how “influential” the user is within their personal networks. Do others pay attention to their contributions?

By combining these factors, we can calculate a “Relawatt” value (a measure of the energy that any one relationship has). See Figure 5.4.

Figure 5.4 The Relawatt Equation

The equation breaks down accordingly:

• IPRF (Individual Potential Relationship Factor)—represents the number of connections the relationship has in the digital world through their various social networks. This is a multi-faceted value that represents a count and weight. For example, an organization that has determined LinkedIn is more applicable to social networking than Facebook will ascribe a higher “weight” to the connections the individual has on LinkedIn rather than Facebook.
• AF (Attention Frequency)—represents the number of interactions a given individual has with an organization through both social media (Facebook, Twitter, etc.) and non-social media (i.e., a blog) and is purely a factor of activity. So, no extra weight is given to writing a response versus just “liking” something on Facebook.
• IA (Interaction Amplitude)—represents the depth of the individual interactions a given individual has with an organization. Depth illustrates not only multiple interactions in a given conversation but also the “thoughtfulness” of individual responses.
• IS (Influencer Score)—represents the individual’s “influencer score,” which is measured through a commercial service (such as Klout, which we use for simplicity’s sake here).

There are three additional calculations to keep in mind. First, the IPRF is divided by the number of social networks used in the variable. This is done to normalize the number against whatever scale you decide to use (10, 100, 1,000, etc.). In the calculation examples that follow, we’ve used 100. Second, the IA is divided by two—again to normalize the result for scale. Finally, the entire result is divided by the q-value, which represents the number of variable groups (in this case four—IPRF, AF, IA, and IS) to once again normalize for scale.

It is important to note that the q-value has to correspond to the number of variables within the equation, just as the n-value has to correspond to the number of social networks the organization is using in the calculation. Neither of these values should deviate from a representation of variable counts, even if a variable group produces a zero value. This is to enable individuals with more value (i.e., scores, or higher scores, in all four variable groups) to attain a higher Relawatt value.

Does a higher Relawatt value mean that one person is more important than another? Should you focus all your resources on them? The simple answer is “No.” Remember the gist of this book—all marketing, all sales, all organizational engagement with people is about relationships. Heck, all of being human is about relationships. We hope that you stop thinking about people as customers or prospects or leads and instead recognize them as people regardless of B2B or B2C. What Relawatt values should tell you is where to focus scarce resources for more individual or personalized engagement while also telling you where there is an opportunity for you to improve relationships with other audience members that have a lower score.

You should also keep in mind that a relationship measured with Relawatts has more energy because of its ability not only to affect its own network of individuals, but also to affect those outside, such as interactions seen by others who are not in the primary individual’s network and may be influenced by a response (the Relawatt measurement has a significant amount of applicability in organizationally owned or branded communities, which is discussed in greater detail in Chapter 16).

The Relawatt Scale

Recognizing that the entire equation is arbitrary (i.e., you can assign whatever values you want to any aspect), there needs to be a hierarchy of value that reflects the individual nature of networks connected to the organization.

The easiest way to do this is to keep it on base 10. Therefore, the maximum Relawatt value of any given member of the relationship network is 10, 100, 1,000, and so on. (Because we are using Klout for the IS portion of the score, we’ve decided to measure the remaining on a 1–100 scale.)

We’ve provided a sample scoring hierarchy here for each of the elements in the equation:

• IPRF
  • 1–100 connections = 25
  • 101–300 connections = 50
  • 301–600 connections = 75
  • 601+ connections = 100
• AF
  • 0 interactions per month = 0
  • 1–3 interactions per month = 10
  • 4–6 interactions per month = 20
  • 7–10 interactions per month = 30
  • 11–15 interactions per month = 40
  • 16–20 interactions per month = 50
  • 21–25 interactions per month = 60
  • 26–30 interactions per month = 70
  • 31–35 interactions per month = 80
  • 36–41 interactions per month = 90
  • > 41 interactions per month = 100
• IAa
  • Social media (SM)b
    • No responses to any conversation = 0
    • One response to a single conversation of 1–5 nonweighted words = 10
    • Two responses to a single conversation of 1–5 nonweighted words = 20
    • Three responses to a single conversation of 1–5 nonweighted words = 30
    • One response to a single conversation of more than five words, including at least one weighted word = 40
    • Two responses to a single conversation of more than five words, including at least one weighted word = 50
    • Three responses to a single conversation of more than five words, including at least one weighted word = 60
    • Multiple responses to more than one conversation of one to five nonweighted words = 70
    • Multiple responses to more than one conversation of one to five words, including one or more weighted words = 80
    • Multiple responses to more than one conversation of more than five words, not including at least one weighted word = 90
    • Multiple responses to more than one conversation of more than five words, including at least one weighted word = 100
  • Non-Social Media (NSM)
    • This scale is the same for social media and is generally reflective of blog or community activity.
• IS
  • For Klout, this is a score based on 100.

Calculating Relawatts

Of course, an automated system to calculate this score would be the most efficient. However, we also recognize that some aspects of the score (i.e., IA or depth of interaction) cannot be readily analyzed or assessed programmatically. It takes a human to look at the way a person has interacted with a conversation to determine its “depth.”

Relawatts in Action

Let’s work through an example in a fictitious organization.

In order to make the equation function properly, the organization needs to weight the relative importance of its social media channels. For our example, the weights are:

• Facebook—1
• Twitter—.5
• Linked—.75

Using those weights, we will calculate Relawatt values for two people—Eleanor Rigby and Paperback Writer.

• Paperback Writer—connected to the organization through Facebook. For a given month, he displayed the following characteristics:
  • 252 connections = 50
  • 7 interactions = 30
  • SM = 0 (based on this number, his interactions, calculated in the bullet above, would have been “Like”-based.)
  • NSM = 0
  • Klout = 18
• Eleanor Rigby—connected to the organization through Facebook, Twitter, and LinkedIn. For the same month as Paperback, she displayed the following characteristics:
  • 384 Facebook connections = 75
  • 526 LinkedIn connections = 100
  • 311 Twitter connections = 75
  • 48 interactions = 100
  • SM = 60
  • NSM = 30 (through community interactions)
  • Klout = 39

What are Paperback’s and Eleanor’s Relawatt values?

• Paperback—((75(1) + 0(0) + (0))/3)+ 30 + (0 ∗ 0) + 18/4 = 18.25
• Eleanor—((75(1) + 100(.75) + 75(.5))/3) + 100 + ((60 + 30)/2) + 39/4 = 58.5

Now, even before running the calculation, it might seem that Eleanor is obviously more valuable to us than Paperback. But what if we introduce someone else who complicates the picture?

Hey, here comes Jude.

• She is connected to the organization through Facebook, Twitter, and LinkedIn. For the same month, Jude displayed the following characteristics:
  • 1,601 Facebook connections = 100
  • 126 LinkedIn connections = 50
  • 16,412 Twitter connections = 100
  • 2 interactions = 10
  • SM = 0
  • NSM = 100
  • Klout = 81

So what is Jude’s Relawatt value?

• Jude—((100(1) + 50(.75) + 100(.5))/3) + 10 + ((0 + 100)/2) + 81/4 = 50.875

Despite Jude’s lower number of interactions, she is actually not that far away from Eleanor in Relawatt energy.

This is important because it exposes something about the measurement—the Relawatt value is both an expression of actual and potential opportunity. So, in the case of Eleanor, who is actively participating in social media, the organization can engage with her immediately. But for Jude, whose primary interaction is non-social media (let’s say through a blog in the organization’s community), the relationship value is more about the opportunity. Her social connections and Klout score peg her as an influencer. If the organization could somehow figure out how to get her to engage via social media as well as in the larger community, the organization might be able to tap into the significant influence in Jude’s vast network.

The Impact of Relawatts on Marketing Strategy

Now that we understand the energy within our relationships and our relationship network, how can we better manage the development of our relationships? What should we do next to focus our efforts on cultivating those people with the highest levels of energy? Some might be the “hubs” or “influencers” of our network (like Eleanor). However, others, still influential (like Jude), might end up more marginalized.

Managing and maximizing Relawatts ensures we are focused on the best opportunities for relationship network impact.

The Relawatt, whether it is potential or actual, is a relationship barometer. It is likely that lower Relawatt individuals are at a different level of our relationship pyramid (e.g., “aware” rather than “intimate” and have different relationship needs, so they aren’t interacting with your organization). Because relationships with individuals travel through various levels of relationship strength, it is important that Relawatt values be living. We need to measure every few days, at a minimum of once per week.

The buyer’s journey we discussed in Chapter 4 illustrates that people may go through periods when their Relawatt value dips. Perhaps they are distracted from engaging on social media during a decision-making process. They might be comparing and exploring online, watching videos, reading reviews, and/or even talking to people in face-to-face social settings. Your marketing strategy must take into account this natural ebb and flow, capitalizing on those moments when Relawatt values jump for specific individuals, and they may be more receptive to spending some of their attention. This may be the time when you might be able to push them further up the relationship pyramid.

Notes

1. https://immersion.media.mit.edu/.

aThis is the most difficult element of value to measure. Word count alone does not suffice (someone could say, “I am going to buy this right now,” or “I just bought this and it’s awesome,” which are relatively short answers but carry a lot of meaning and potential influence depending upon how connected that person is within his or her own network).

bNote that we have chosen to include consideration for “weighted” words. These are entirely arbitrary but reflect some intrinsic value to the organization. So it may be a word like “buy” or a string of words like “tell a friend” or the name of a product.