There’s an interesting conversation going on at SocialMediaExplorer. Well, there are several great conversations going on there, but this is one that I thought I’d re-blog here having commented on an earlier post. Besides, I suspected my comment might be too long…since this is something I’m quite passionate about.
Having had many conversations about Social Media Marketing and Social Media Networking with business executives I know first hand that the case for companies adoption Social Media hasn’t yet been made convincingly enough to have businesses falling over themselves to adopt it.
On one hand Social Media practitioners say that businesses need to get in on the conversation, build relationships, go where their customers are going and monitor what’s been said about them. Start using the tools, start a blog, allow comments and be “social” with their customers by interacting with them. But don’t expect to be able to measure it because it defies measurement.
Should companies be using Social Media tools and applications? I believe so, if only because their customers are using it. Customers are doing things differently and for companies to remain relevant to them they must listen and go where they are going. Or risk losing them to the competition. It’s becoming clear though that this isn’t enough of a reason. There needs to be more and it has to be tied into business results.
Most companies are not there yet. They hear the talk but want to see proof to take back to their bosses. Bottom line – have we made profit or have we lost money from all our activities? How will Social Media help us make profit?
I struggle when I hear things like…
- Social Media can’t be measured because conversations and relationships can’t be measured. It’s about value.
- It’s more than being about revenue, in fact there isn’t a direct line to revenue or the bottom line
- It’s too difficult to tie Social Media into bottom line and profits
- We haven’t worked out the ROI yet and we probably won’t…
Companies have to account for investments they make and budgets they spend.
When I write a business case for marketing dollars I have to include revenue projections and/or bottom line impacts and ROMI even if this is over years and even if these are assumptions. So how does it sound if you are saying to your CFO or CMO, um… sorry I can’t tie this into bottom line revenues or profits because it doesn’t quite fit. You just have to “try it and see.” Chances of my getting $$? Probably zero.
I think we can measure the value of relationships, or at least express it. For example if a customer leaves because of a poor experience their lifetime value (or rather loss of it) can be measured. If they stay they spend more and refer others who spend.
The reality is if you can’t tie Social Media into bottom line profits somewhere, it’s going to be a very hard sell. You won’t get through to most executives and decision makers. It really is that simple.
But perhaps the initial focus on ROI is the wrong focus completely. And perhaps counting conversations and trying to measure the intangible is like pushing water uphill.
What Gets Measured…
There are ways to measure the outputs of social media efforts. If you drive traffic you can certainly measure it. You can measure content effectiveness and make pages stickier. But that’s superficial. What does that traffic actually do? What will it do?
Now, if you craft a landing page with a downloadable offer, whether this is a trial or paid-for offer you can measure results. The key there isn’t the tool, it’s what happens with the tool. It’s the landing page conversion into prospects. It’s the conversion of those prospects into leads and those leads into clients. Then it’s about referrals and potential brand advocacy. Those are another set of metrics – which should be agreed beforehand.
And it all tracks back to the business strategy… what are you measuring and why. If you don’t have that, forget it. If you cannot measure it, you cannot say what works. You can’t show money well spent if you can’t measure it.
But back to my question of whether the focus on ROI might be misleading. In my recent post Social Media Top Business drivers I highlight research done by Aberdeen Group. You can read the article for yourself, however my point here is that what drives many companies to use Social Media are their business pressures.
Read – if the business fails to meet these top of line pressures they may be out of business and the case for Social Media is moot anyway. While practitioners are talking conversation, executives are thinking how can we reduce or eliminate our business pressures? Does what this person is describing help me do that?
Business Pressures
Some of these business pressures include but are not limited to:
What Social Media practitioners must do is zero in on these pressures and work with the companies to enable them use the appropriate social media tools and put in place metrics to measure success.
Practitioners must also segment the companies they approach… different companies (see article in question and below) require a markedly different approach.
It’s a question of going in as a problem solver not a pitcher of Social media tools and tactics.
It’s less about conjuring up ROI and more about knowing your audience. Once you’ve shown how your strategy can solve their immediate problems, the question of ROI becomes self-evident. Almost. To my mind you can’t really answer the ROI question until you know exactly what you are investing. And for that you need to know why you are investing it, the opportunities it will bring and for how long.
Whether we like it or not, if we don’t build a solid business case for Social Media, it is going to be a hard sell regardless of the philosophical argument.
My suggestion
instead of getting trapped in the ROI question, turn the conversation towards solving their top business problems.
What you will find is the question becomes:
“How does Social Media enable us and align with our current processes?”
Then you can say… “like this.” Or “it doesn’t. But this may work better…”
You will note that I am looking at this from a strategic enterprise perspective and not simply a marketing channel perspective.
If hiring staff, buying equipment, buying advertising or anything else within a company requires a business case, measurement, accountability and some idea of how it’s going to impact the bottom line, should Social Media be any different?
If you’ve a perspective on this, whether you’re a business or practitioner I invite you to share.
Other articles you may find interesting are:
Wanted – The Business Case for Social Media
Enterprise Social Media – Best In Class vs The Rest
on 
{ 3 comments… read them below or add one }
Great points here. Thanks for the compliments and for continuing the discussion. It’s obvious from the number of opinions it’s a nut we haven’t yet cracked. Hopefully the conversation will get us closer to that end.
Great stuff.
You’re welcome and thanks for commenting and for the original post. It’s a very topical subject and one marketers, execs and practitioners are struggling with. I do hope the conversation leads us to discovery and the more people talk about it the closer I think we’ll get.
very interesting article on ROI & social media but can you explain now that what use of website promotion