Social Media ROI
February 7, 2010 by Jamaal
The traditional business mind has been trained to ascertain what the ROI (the Return On Investment) is before seriously considering any injection of time or finances.
Social Media, being new and a current hype, is commonly the target of the “What’s the ROI?” question. Actually, I don’t believe it’s all hype. I believe Social Media is truly valuable. Yes, there is a lot of “noise” in these spaces, which I know will emerge into clearer patterns of communication, but even this “noise” is important, because it’s shaping Social Media.
A few months ago Scott Stratten (@unmarketing on Twitter) shared something with us. A friend asked him what the ROI was on Twitter. In answering, Scott asked his friend, “What is the ROI on our friendship?” This story is profound, and I’ve related it thus far in 2 public seminars. It’s profound because the ROI of Twitter, and Social Media as a whole, is intangible – just as in relationships.
Is it all about business? Is it all about numbers? Or is it all about people?
I highly recommend this book: “It’s not about the coffee” by Howard Behar. Visit the official website here. Howard is a Former President of Starbucks International. When we think Starbucks, we think coffee, right? Well, Howard goes at length in this book to illustrate that it’s really about the people, not the coffee.
He says:
At Starbucks, the coffee has to be excellent, from the sourcing and growing to the roasting and brewing. The vision has to be inspiring and meaningful. Our finances have to be in order. But without people, we have nothing. With people, we have something even bigger than coffee.”
“Opportunities lie within people” – something I learnt from Mignon Lotz-Keyzer, the owner of a company called PEERPOWER. I sat in her coaching sessions as part of a business programme in 2007. Mignon is a people’s person, and she did an excellent job in helping us understand the value of the human factor. We also covered Covey’s 21-year old masterpiece, The Seven Habits of Highly Effective People, with her.
Yesterday I came across an interesting article titled There Is No ROI From Social Media! I’d like to share with you the video at the bottom of the article, which sums up the Social Media ROI question quite nicely:
Photo credit: intersectionconsulting
Great quote: what is the ROI of our friendship?
It still comes down to business. It’s tough to get a business to spend any money, effort, time without some measure of ROI. It doesn’t have to be always clear cut but at least some measure.
Thanks for your comment Scott. I agree that Social Media must be measured, but that’s different to seeking ROI on Social Media itself. Measurement will help ascertain and direct goals, and then improve strategies.
It does come down to business yes, and anyone who goes into Social Media blindfolded is wasting his or her time.
Mitch Joel wrote a brilliant post 2 days ago titled “There Is Nothing Wrong With Making Money” – and here is an excerpt:
“Yes, the new digital channels are primed for those who are looking to connect, communicate and engage in conversations, but if there is no benefit in the end, then all is lost. For some, that end benefit will be dollars in the bank, for others it will be social capital (check out Tara Hunt’s amazing book, The Whuffie Factor, for more on that), for some it will be the growth of their personal brand (which in turn will help them create ventures in other channels for monetary gain), and others do it simply as a way to stay connected and learn from more people.”
You can read the complete post here: http://www.twistimage.com/blog/archives/there-is-nothing-wrong-with-making-money/.