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I’ll be direct – there are some people you want to have around AFTER the Social Media Bubble Pops. (And it will…more on that in the weeks to come.) Olivier Blanchard is one such individual – and I think I set off a Facebook Firestorm yesterday, when I shared with him an interesting piece: 101 Examples of Social Business ROI. That blog post was authored by a chap named Peter Kim.
Peter Kim may be the smartest man on the planet, may have cured cancer in laboratory animals, may have launched unmanned spacecraft that are headed toward Mars. Or maybe not – that’s not what we’re discussing here.
What we are discussing here is ROI. “Return on Investment.” Especially in the context of Social Media; so we can say this is a post on Social Media ROI, which happens to be the name of Olivier’s book. (NOTE: I live in Illinois and we can’t get Amazon Affiliate Credits…so there’s no Affiliate Link here.)
In order to get a Return on Investment, you must have an INVESTMENT. Here’s an example from Peter’s blog post.
“AT&T. Community: 21,000 customer issues resolved, driving 16% improvement in call deflections year/year. (Lithium Technologies, 2011)”
This is like one of the Wonderlic tests where you’re missing some really key data. For instance, a test question on Social Media ROI using the above example could be phrased like this.
Assume the following phrases are true: 1. All companies that invest in social media will see a Return on Investment. 2. AT&T invests in Social Media through its Community, and the company resolved 21,000 customer issues and drove a 16% improvement in call deflections year/year.
Question: AT&T’s Return on Investment from its Social Media is:
A) 21,000 customer issues
B) 16% improvement in call deflections
C) We don’t have enough information to make that determination
If you answered “C,” give yourself a Gold Star.
The list from Peter Kim is filled with examples like that. More sales, less complaints. More Facebook friends, less emails sent over the wall to customer service. Etc., etc.
ROI means Return on Investment. Investment means Spending Dollars.
Now, there are other metrics that may be really important to your business. Measure those. Measure them some more. But, for the love of Mike, do NOT, repeat, do NOT confuse “Social Media” with “Return on Investment.” It’s not that easy.
Marketers (which, these days, and especially in the Post-Social Media Bubble economy, will be just about everyone) need to understand the hard- and soft-dollar costs behind what it is that they are spending time on BEFORE they can actually quantify the Return on Investment. Just saying “we have a Twitter account” and “we get leads from Twitter” doesn’t mean that “we have a positive ROI from Twitter.”
Measure Everything. Manage What You Measure. But Don’t Casually Throw Around “ROI of Social Media” and Expect Management to “Get It.”