Social Media ROI = Brand Equity + Sales

“Moments ago (when I typed this), Gary was talking about a person in the board room who was hounding him, “What’s the ROI of social media? What’s the ROI? What’s the ROI?” Gary’s answer, when he’d finally had enough? “What’s the ROI of your mother?””

Scott Stratten was asked the same question by a friend. What is the ROI of Social Media? He asked his friend what the ROI was on their friendship!

What’s the COMPLEX meaning of ROI?

In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or net income/loss. The money invested may be referred to as the asset, capital, principal, or the cost basis of the investment. ROI is usually expressed as a percentage. [Wikipedia]

What’s the SIMPLE meaning of ROI?

What do you get out for what you put in?

I understand when some people are fixated on the Social Media ROI topic. Watch this video of Gary where he talks more about this. They’ve been trained that way. MBA grads, business professionals, they’ve been trained that way. And they’ve been trained in the right way. However, things have changed. And we have to adapt. We have to adapt our thinking and our actions. Web 2.0 has changed how we do EVERYTHING. The way we work. The way we meet people. The way we socialise. The way we research. They way we learn. And on and on.

Gary doesn’t reveal details in his keynotes. Read Chris’ post to understand why. But there are details to Social Media ROI.

I’ve never seen an ad from Gary. This means that no advertising about Gary or his brand has reached me. Remember, I’m in South Africa, Gary is in the US. Yet, I’m a fan of Gary. I support his work. I blog about him, repeatedly. I model some of the things he’s done. I promote his work. I share Chris’ sentiments when he says: “I’m a fan of passion. I’m a fan of people who humanize business, and Gary is that 100%. No matter what, Gary is human, and so, I’m a fan. Thank you, Gary.”

There’s a word for this in the business world. It’s called Brand Equity.

What is Brand Equity?

Uncle Wikipedia says: “The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets a company has. Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one.” Read more.

I was taught this on one of the business courses I attended. When selling your business, your brand equity can increase the selling price of your business. Why? Because above the money in the bank and the assets you have, the brand equity is also valuable. Your perception in the world has value. Your community is valuable. They buy your products.

Apple has immense brand equity, wouldn’t you say? I’ve repeatedly said, online and offline, that I’m an “Apple fan-boy” because I simply love their products. Do I love them because they’re cheaper than their competitors. Nope. They’re not cheaper. I love Apple because of the quality of product, and the culture around the product. That’s brand equity. I’ve never heard anyone say “I’m a Microsoft fan-boy” – have you? Microsoft does have good products, and they’ve made a lot of money, but the brand equity is not as high, or in other words, it’s negative brand equity. The common perception of Microsoft is that we have to use them, but we don’t really want to.

Brand equity is valuable, but largely intangible. This is why Gary likened Social Media ROI to a mother. Is a mother’s love tangible? It’s enormous, but largely intangible. Consider Einstein‘s quotation in the image above: “Not everything that counts can be counted, and not everything that can be counted counts.” Think about it for a second. Reflect on it.

Let’s move on.

I’ve purchased Gary’s book Crush It! (a New Your Times Bestseller) as a gift at one of my Social Media talks. I also bought an audiobook of Crush It! which I still listen to regularly. Okay, two small sales. So what! So what? So they add up. There are thousands of people like me. Due to Gary’s online profile, he has signed 10-book deal, and The Thank You Economy, his second book, has already been published. Now we’re talking millions. That’s real money.

There’s a word for this in the business world. It’s called Sales.

We’re all trying to sell. That’s the only reason we’re in business. Advertising is becoming way too expensive, and the value of advertising is also decreasing. Social Media is the new wave of marketing. And it’s no bubble. Don’t listen to the naysayers. Listen to those who are walking the walk. People like Gary. And Chris. I won’t include myself in that list, but hey, I’ve made some sales through Social Media. I’ve been on radio, in magazines, in newspapers, that counts as brand equity, right?

Don’t let anyone tell you there’s no value in Social Media. There is!

Photo credit

DIY in Social Media will lead to RIP

Facebook is free. Twitter is free. YouTube is free. With all these free tools, many businesses try to go the DIY route when implementing a Social Media strategy. I think this is a huge mistake. Although the Social Media tools are free, knowing how to use them takes intuition, practice, experience, and a broad knowledge of Web 2.0 and Social Media. What’s intrigues me most are the nuances in Social Media. Every platform is different. For example, frequent posts on Twitter are good, they’re not so good on Facebook, and a terrible thing on LinkedIn. I’m over-simplifying (again), but these platforms are all different. We all (including myself) have treated them as equal, and dual and triple posted to them, but that doesn’t work.

As more people try to DIY with Social Media, they’re going to realise that they need to “call in the experts” as it were. Today, Khalil Aleker posted this question to me on Facebook:

The main challenge for many Facebook users who want to create “fan” or business pages is that you have to have a personal profile in order to start a fan page, and the two are linked. As a result, business owners regularly receive “friend” requests from people who actually intended to become a “fan” of their business page. Any advice?

Yes, you do need a personal Facebook profile to create a Fan page, but thereafter the Fan page is independent. Furthermore, you can assign other people as Admins to the Fan Page. Members of the Fan page never need to know who manages the page – and several people can manage at once. This is sometimes essential, especially in a growing organisation.

So if you want to grow your Fan page, you simply market and promote it, and not your personal profile. A few months ago Facebook launched vanity URLs (they were first only allowed on Fan pages, but now they’re allowed on personal profiles as well), so place that vanity URL wherever you can – posters, email signatures, etc. Ours is facebook.com/jayzcoza – pretty neat and simple to remember.

With a Fan page also comes the skill of motivating interaction and participation, monitoring Facebook Insights, etc. To me, a Fan page is a company’s mini website within Facebook. And you have to take full advantage of that. Also, it’s not a personal profile, so personal family photos, etc are a big no-no!

It’s possible to create an event within your personal profile. But if it’s a company event and you have a Fan page, then you should create the event within the Fan page. It’s easy to miss this nuance. This way, the event will stay within the Fan page, even after the event date. It’s an automated archive of all your company events – and that is valuable for your reputation history.

My point of this post is to show that DIY does not work with Social Media. People like myself who are specialists in this area know that it takes a daily effort of analysis and research to get it right in Social Media. And things are ever-changing in the online world, so for the lay person to keep up is difficult, and sometimes even impossible.

Khalil, I hope this answers your question.

Press the flesh

I wasn’t going to write about this today, but Khalil Aleker’s comment on Facebook (see image to the left) has spurred me on. Many people ask these type of questions, and they’re valid. Are business cards still necessary? Are meetings still necessary? Are board rooms still necessary? Are books still necessary?

The answer is “yes” to all of these questions. I believe that moderation is crucial in all aspects of life. Yes, Web 2.0 and Social Media have changed industries and many business and communication fundamentals, but we need not – and should not – discard everything that worked well before.

Press the flesh is a term I picked up in a book called The Rules of Entrepreneurship by Rob Yeung. [I incorrectly referred to it as "Touch the flesh" in a recent seminar - apologies.] It refers to meeting people and shaking their hands. I believe this is vital. I try to have a few meetings every week. One per day would be great, but currently that’s just not possible with all the desk work I have to do. Meetings are great, they reveal a lot about the people that we’re doing business with (partners, associates, clients) – but even more importantly, they help build the relationship like no online activity can. It’s all about relationships, isn’t it? It’s all about people, isn’t it? I also have a policy to not have my MacBook out at a first meeting. I am surprise how rushed people are to get out their laptops and do some screen-dazzling. Nope. I want to get to know the person first. Let’s talk.

A few months ago someone who does similar work to what I do posted something on Facebook. He said that we should do away with all boardrooms and meeting rooms, and all meetings should take place online. I think that’s absurd. I’ll even go as far as to say it’ll never happen.

Throwing the baby out with the bath water is almost never a good idea. Adapt, yes. Change, yes. Grow, yes. Innovate, yes. Have blinkers on, no!

I still use business cards, even though I know that if you Google my name you will find so much information about me. Business cards still help when meeting people, and they also help in giving contact information to people who are not online all day like we are (yes, there still are many of those types of people). Meetings are irreplaceable. However, I must say this. I meet when I feel it’s a good thing to meet. I’m fully aware that many people and organisations are stuck in having-meetings-about-other-meetings syndrome, and they waste hours each month in unproductive activity. This is not a good thing. I have many online meetings (using tools such a Skype and Dimdim), and I even do coaching and seminars online – but I balance those with personal meetings and events. Boardrooms? Like books, I think they’re going to be around for a VERY long time. There’s too much value in these things for them to be replaced overnight. Maybe in 50 years things will be different, I don’t know. But we’re talking about our current situation, and perhaps the near future.

Rob Yeung says:

“Touch trumps tech every time…A single meeting a day may win you more business than hours of phone calls, letter writing, and emails combined…Secure that contact and press the flesh.”

It all about balance, I guess.