Banks And Social Media | Vehicle Registration Blog

3rd November 2008

ROI on Social Media for Businesses

social media for businesses

A new study is showing that 93% of Americans expect companies to have a presence in social media. 85% say companies should interact with consumers via social media, according to the data released by Cone, Inc.

Specifically, those surveyed believe:

Companies should use social networks to solve my problems (43%)
Companies should solicit feedback on their products and services (41%)
Companies should develop new ways for consumers to interact with their brand (37%)
Companies should market to consumers (25%)

Men are twice as likely to interact with companies via social media than women. 33% will interact one or more times a week while only 17% of women will.

Two-thirds of households with 3 people or more and those making $75,000 or more feel a stronger connection to brands they interact with online.

What do you think about this survey? Does it change the way you think about social media as an advertising medium? Share your thoughts in the comments.

The consistent response is similar to a deer staring into the headlights of an oncoming car. Most business people think they are managing by measuring results and for “soft issues” they make up measures to satisfy themselves. Measuring business results has turned into a “counting game” without regard to the quality of the inputs, the relationships and the quality of the business which covers many aspects. (Wonder why we need an economic bailout?)

I find this whole social media ROI discussion rather sophomoric and only reflects the old school management philosophies which need to be transformed in order to survive.

ROI on Social Media

Can ROI with Social Media Be Measured?

Stephen Smith writes: “The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable.”

“To illustrate that point for all our measurement and metric geeks out there, what you are trying to do is assign multiple choice scoring to an essay question. It’s not possible.”

… “Ultimately, the key question to ask when measuring engagement is, ‘Are we getting what we want out of the conversation?’” And, as stubborn as it sounds Mr. CEO, you don’t get money out of a conversation.

“To further the discussion a bit, I sat down with Katie for an episode of SME-TV, which will be added to this post later today.”

“What Katie evangelized a bit in her session was that the conversation (comments on your content) was the best measure of a level of engagement. Avinash Kaushik says much of the same in his discussions on web analytics. This isn’t an end-around the need for ROI, it’s the answer. Or at least a big part of the answer.”

(Side note - Provided this is true, isn’t it sad that most companies haven’t even upgraded the technology used on their websites to enable commenting and conversation. Of course, it’s even more sad that if they had the technology right, they’re still afraid to use it. I digress.)

“When you ask businesses why they are participating in social media, what do they say? If they say, “to make money,” then they will fail because currency in the social web is found in both relationships and content. If they say, “to grow our business,” they’re just saying, “to make money,” in a nicer way. If they say, “to participate in the conversation,” which is the more appropriate reason to be involved in the social web, then why on earth would they not measure success by the value of the conversations they have?”

How and Why Do You Measure Relationships?

Any good sales person will tell you their number one objective is building relationships over time. Yet few if any company bothers to measure the cost of building relationships rather they measure the results of relationships. Measuring the results doesn’t tell you “how to build effective relations” or “which methods create the best relations.”

Relationships come from human experiences, not corporate spin and hyped promises. Human relationships are measured by trust, sincerity and common values. If you want a return on social media then focus on conversations that build lasting relationships based on value exchanged and create great experiences. Why is ROI so important? Because that is all you know how to manage. Get it?

via Search Engine Watch Blog on 9/29/08