New Comm Biz

You're Crazy

This post is dedicated to all capitalists working inside corporations or organizations that are interested in maximizing and increasing profits.

For some unknown reason the ROI debate has sprung up. Not the healthy what is the best way to measure social media but the should we even measure social media debate. Seriously? Is this 2007 again? I thought we got past that.

The problem however is where do you put social media? Does social media belong in some communications or IT bucket? Does it belong in Marketing? Let’s look at the pro’s and con’s.

If social media is relegated to Marketing it must show not just a return on the investment put in (ROI) but an ROI that contributes to the top line (profit). (My apologies while my MBA get’s in the way here.) Yes that’s hard to do. Mostly it’s hard because there are no baseline measurements to start from.

If social media is viewed as a cost center then it’s in the same boat as IT, customer support and HR. Let me ask you a question? In your company right now, how excited do executives get about making investments in any of these areas? Not very.

This also addresses my hatred for the response to the ROI question: Do you measure the ROI of your telephone? That’s just stupid. People don’t measure the ROI of your phones they only look for ways to reduce the expense.

If social media is a cost center then we are only competing on price. And that sucks!

Social media can be very effective in cost centers. I’ve found that it can create significant savings to the bottom line. But sometimes justifying the initial spend or even shift of resources to get customer support on Twitter and HR blogging internally can take some convincing. Nothing convinces executives like top line revenue. This is why we focus on Marketing right now.

As we show ROI for social media in Marketing this makes it easier to push it through the rest of the company. If Marketing asks (and can justify) that customer support needs to be offered via social media it goes a lot further than customer support saying they need additional budget for social media.

Now back to that pesky social media marketing ROI question.

I can measure the ROI of social media anyway you want it!

The key is that each point of the Awareness Consideration Preference Purchase (ACPP) spectrum we have to agree that there are Key Performance Indicators (KPI’s) that lead to ROI. (News coverage is an agreed upon KPI for Awareness because people have to know about your product or service before purchasing it.) You need to establish KPI’s for your social media program that map to as many of these as possible.

Awareness: Would you like me to show the overall pick up of your message on blogs and in Twitter? Or would you like me to drill in to a more targeted list of influentials in your space? Even better.

Consideration: Would you like me to show you the tone of those conversations as they happen in real time? How about real consumer product feedback not just on review sites but on blogs and on the comments of blogs covering your product?

Preference: Would you like me to show you the traffic referral sources from social media to the product pages of your website? Selling to the enterprise? Are you tracking those IP addresses that hit your site? Do you know who the key decision makers are and who sits near them in the org chart and which ones have blogs or are active on social media?

Purchase: Are you extending that traffic monitoring all the way to your checkout page? Are you monitoring the conversation for new customers reactions to their purchased product? Are people doing unboxing video’s of your product? Do you want me show you the ROI of combining social media with your enterprise sales? How about a significant reduction in closing time?

If an agency or consultant tells you you shouldn’t measure the ROI of social media walk away. If an employee tells you you shouldn’t measure social media fire them. These people are wasting your time and money.

Photo Credit: Jaxxon

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