ROI is a hot topic.
Discussions surrounding the return on investment of social media have been prevalent lately, and with good reason. In a tightening economy, businesses are scrutinizing their spending and anxious to ensure that their resources are being allocated wisely.
The discussion of ROI has focused mostly on the search for the holy grail of a metric, but adapting traditional metrics to fit social media would be akin to sticking a square peg in a round hole.
But what does "return on investment" really stand for in a business? Roughly translated, it means the value we expect to get out of all the effort we put into something. It's the definition of the output (return) from an input (investment).
But here's the trick: ignoring the input, or doing nothing in social media, will surely guarantee no return at all.
So, then, what is the "Return on Ignoring" social media? Here are some perspectives from the front lines.
The following interviews were recorded at the MarketingProfs Digital Mixer in Scottsdale, AZ in fall 2008. This is the first article in a series that will explore the importance of social media in the marketing mix.
Ignoring the Need to Change?
Gary Vaynerchuk: http://www.youtube.com/watch?v=W7BQ3kf2i8Y
I love Gary Vaynerchuk's take on this. He's actually hoping the "dumb" companies don't clue into the need to stop doing the same thing they've been doing all along. He's hoping that the recession will actually scare such companies away from change, away from venturing into social media. Why? The survival of the fittest—the "smart" companies will win. Consider Gary's WineLibrary.TV and its phenomenal growth as evidence that the social-media approach works.
Sean McDonald: http://www.youtube.com/watch?v=iBAoAfIKORI
Social media tools have given consumers the ability to easily express themselves online, without filters. They are out there, actively talking about the brands they love and hate, and why. Consumers are talking to each other about their passions and problems, and they've fully embraced how accessible and transparent the Web is for communication. Businesses need to recognize, however, that consumers expect companies to do the same.
Dell has experienced a wonderful turnaround in brand advocacy since it began listening, sharing, and engaging in social media. In fact, it has built a team around just this function. And as Sean highlights, any brand can start off slowly, by listening. Assign the role to a single person who's passionate about the brand, and allow that person to participate enthusiastically in the community. Watch what happens.
Ignoring Your Customer?
You'd never intentionally ignore customers. You wouldn't turn your back on them at the counter, ignore the phone, or arbitrarily delete emails you receive from them. But customer conversations are happening online now, and ignoring the impact and influence of social media is tantamount to doing just that—ignoring customers.
They're praising products, asking questions, expressing issues, offering suggestions, expressing needs to fulfill—all in the various social media channels. These are merely new communication channels used to convey age-old concepts and deliver feedback to companies in hopes that they will listen and respond.
More importantly, social media isn't private. It's out there boldly for the entire Web to see (including the almighty Google), and a company's absence is only highlighted by such accessibility.
Frank Eliason: http://www.youtube.com/watch?v=6Da2eIw7CIs
Frank Eliason of Comcast knows the power of listening and engaging. He has seen his listening and engagement team grow from himself to a half dozen as customers embraced his use of customer service on Twitter. Frank believes it's paramount for companies to be involved in social media, asking "how can I help?" and "how can I make the brand experience better for you?"
CC Chapman: http://www.youtube.com/watch?v=nF1k6gVKPgc
For CC Chapman, a down economy should give companies even more incentive to get more engaged with their customer base. People will continue to share and recommend, even in tough times. Knowing who your advocates are and what they need to remain loyal supporters could be just the thing to separate your brand from your competitors.
Ignoring Your Future?
Connie Reece: http://www.youtube.com/watch?v=NuBqO_S0_LI
Your future customers are using social media. As Connie points out, the younger generation—those age 13 to 25—aren't using the internet and email the same way you did.
Not building solid, transparent, accessible relationships online with these consumers could very well be the death knell for your brand. And the brands that figure out how to relate on a new level and have true conversations with these consumers can earn advocates for life.
Donna Tocci: Communicating with the Next Generation through Social Media http://www.youtube.com/watch?v=WJp0H8OwrM0
It's not just about buying habits. As Donna Tocci highlights, it's also about relating to those who will work for your company. Today's employees want to believe in the brand they work for, and connecting to them through social media could be a far more compelling way to engage and recruit future members of the team.
Ignoring Isn't an Option
Social media is changing business. It's transforming and evolving processes, customer service, and communication as we know it. Exploring investment return for social media is valid and necessary within a business framework. But equally important is carefully assessing the price for not being involved.