in Social Media

Success is Not a Number, it is Perspective

There are three kinds of lies: lies, damned lies, and statistics – Mark Twain (and others)

Numbers on itself never tell a story, it is the perspective they are put in that tells the story. However in the end the story might be beautiful, though numbers always have a certain truth in them.

One side of the story

Let’s take for example this article about the KLM (it could have been any other company, however I just ran into this one because it is prominent in my Twitter feed).

This article is, in my personal opinion, about huge accomplishments that, when you interpret the numbers differently, are not really accomplishments but small failures presented as accomplishments by presenting numbers in a certain perspective.

Let’s just go through the numbers quickly that are mentioned in the article and show how these numbers could also tell a different story:

KLM transports 26 million passengers each week, these passengers tend to ask questions via social media nowadays and they do that increasingly every year (each year 250% increase is reported). Currently they 35 thousand questions per week that is answered by a team of 130 person 24/7 in 10 languages (and since KLM operates in 65 countries I assume they cannot answer the queries that are in a different language). Social payment is enabled and earned KLM an additional 100 thousand euros in the first two weeks of its launch.

This is where perspective kicks in

Each week KLM has on average 500 thousand passengers (26 million divided by 52 weeks) and that results in 35 thousand questions. Which mean that one in on average one on every 14 passengers (7%) has a question, assuming that customers only have to ask one question and not multiple questions during the week.

Given that KLM has 130 people working on social media questions (assuming they are all full time), they each answer on average 270 questions per week, given the typical dutch workweek is 40 hours, they answer almost 7 questions per hour or close to one every nine minutes.

The additional revenue reported because of social payment is approximately 10 euros cents per passenger. Though if these passengers are all chair fillers it is 100% additional margin which is what KLM should be looking for.

This is where issues occur with these numbers

It is impressive that so many questions are asked and answered in such a timely manner. However what is wrong with your product if so many questions arise that have to be taken care of by separate agents? If 35.000 questions are asked, it means that 35.000 times insufficient information was available for the customer to take action by him or herself.

Given that the volume increases 250% year over year, it means that next year (assuming KLM keeps their numbers for supporting languages still on ten and won’t increase on that) 87.500 questions will be asked, the year after 218.750 and the year after 546 thousand (which means that are more questions asked than there are passengers, unless KLM in parallel grows it numbers of passengers of course. Though than the year after it will be more questions than passengers since a 200% increase in passengers in 4 years for an established airline is not the current trend for KLM).

However does this mean for KLM that they should grow their team with 250% per year as well? Which means to 325 next year, 813 the next year and 2032 the year after? Since this would result in an increase of salary costs from 4.3 million euros (assuming agents at KLM get paid the so called Modal income of 33.5 thousand euros) to more than 68 million euros.

Coming back to the additional revenue with social payment: it would be 0.0003% of the total revenue of the Air France KLM group, or if revenue stayed constant for the rest of the year the percentage would increase to 0.01% of the annual revenue. Which needless to say would provide KLM with a highly limited impact and even if there would be a steep increase week over week, it would be difficult to reach 1% given the numbers we now have.

With a different perspective the numbers present a different case

Of course KLM will take its measures, since spending 17 times more on salaries alone would be unthinkable in such a low margin business. It will be a slow death sentence or perhaps better phrased as a death by a thousand cuts / tweets.

Of course the growth won’t be a hyper growth of constantly 250%, it will flatten, though it might still reach 100k-200k messages per week. Which is still a big threat, given that handling a question now takes 9 minutes.

Of course automation can help, however why automate drying out a flooded room without turning off the taps. The basic problem that KLM shares with us in this article implicitly (according to my personal interpretation of the numbers) is that there is an information gap, which is currently bridged (or if one would be a cynic: hidden) via web care. A gap that costs them at least around 4 million each year in salary costs alone.

Though it might still give them a good return, not necessarily from a service perspective but from a marketing perspective. Since many people are applauding them for their activities, while all they are doing is mopping the floor under a leaking sink, without fixing the sink.

Lies, damned lies or statistics

I leave the final judgement to you on what the actual truth is, but as you can see numbers put in a different perspective tell a whole different story.

This article was published first on LinkedIn.