Has there ever been a more confusing and mirky topic then defining what is a companies or individuals Return on Investment then with Social Media. Defining how to measure success, clarifying what is success and even more confusing what tools and metrics to use to get these answers has everyone scratching their head and coming up with 300 different ways to do it.
Lets consider first that using Social Media sites is FREE. This aspect changes the game completely when calculating ROI, as traditional methodology will have you calculate money invested to money returned, fairly straight forward but how can this work with Social Media. The major investment (aside from creative that you may wish to do or video production etc) is time.
So do we work out how many hours we spend on Social Media sites, our hourly pay rate and the value and then try and work out if we are getting a return on that. Hell No. No matter what it is you are doing, time is key to being successful. Be it time on the phone, time in the office, time spent in front of clients, this metric is always there, very important yes, but Social Media really shouldn’t be valued this way. Time is money of course but time is a constant and a given.
Earlier this week I joined Bill Boorman on his Blog Talk Radio show discussing ROI for Social Media and Bill insightfully suggested that ROI for Social Media should be Return on Implementation. Whilst we didn’t get a lot of time to explore this and Bill’s thinking, I have no doubt there will be some merit to it.
It got me thinking though, what is the right terminology for ROI and social media. Is there one? Probably not, but given that your aim should be to build an engaging community and repeat communication and interaction, Repetition of Interest/Interaction feels right for me.
How often is your community responding to your posts and others posts, be it blog, micro-blogging, video’s etc. how often are they getting involved, and what is the repeat engagement and volume of engagement from your community. If you have 2000 followers and only 20 consistently engage, is this a good ROI (Repetition of Interaction)?
What’s your thoughts? Is traditional ROI really trackable or relevant to Social Media or is Return on Implementation or Repetition of Interest/Interaction more in line with Social Media expectations. Or is it still to early to really say that anything that we track is proof of success?
I’m unfortunately not inclined to think that social media is time-neutral compared with time spent on activities elsewhere. Social media is a massive time-sink if you want to do it properly.
People are very aware of entities who use social media purely as a megaphone and are less interested in them — treating them almost like spammers, which isn’t far from what they are.
To be successful with social media, one needs to … you know, be social. This means at least feigning interest in what’s going on in the lives of your contacts. Taking the time to engage and respond to them. This is extremely draining time-wise.
I’m very pro social media, but I think businesses have to engage in it at several levels for it to work effectively. Key figures whose time is extremely valuable need only make rare appearances, as long as there’s someone much cheaper maintaining the interaction on a daily basis. Some one cheaper, but with a decent amount of access to information so they can engage in a meaningful way about what the business does.
Given that, I think costing the time spent is extremely important. It should allow key figures to capitalise on maximum exposure generated by a small number (one or two tops) of people whose job description includes a massive chunk of social networking time.
I may be a bit old-fashioned, but if you pay someone a salary, regardless of whether they’re talking on phones or exchanging tweets, the value of their existence must be measured in dollars.
Measuring good will, loyalty and the effectiveness/reachability of customer service, in terms of overall dollar value, isn’t anything new. These methods need not be adjusted for social media (regardless of all the electronic stats collecting that people allow themselves to be mislead by). One uses social media as a marketing and customer service tool and so the same metrics apply as they do for anything else.