A few weeks ago, I wrote a series on Social Return on Investment (ROI), which was well-received by our readers.
There is almost always someone who will challenge you, though. In this instance, that someone was friend and mentor, Jeffrey Gitomer.
If you are familiar with Jeffrey’s writing, you know he is one to speak his mind so it’s best to hear it straight from the horses’ mouth. Below is his opinion/editorial piece in response to my ROI blog series. Reprinted with permission. Copyright © 2012
#1045 Measuring the ROI of Social Media? There’s a Laugh, and a Joke.
I got an (unsolicited) email offering a webinar to teach me about how to measure, and the importance of measuring, the ROI of social media.
TOTAL JOKE. And a bad one at that.
Social media, business social media, is running wild – with or without you. Your customers and prospective customers are posting on Facebook whether you have the balls to have presence there or not.
And I am not just talking to companies – I am talking to YOU – the individual.
CONSIDER THIS: Of all the grassroots revolutions that have occurred on social media, none of them were started by companies or a governments. They were all started by people – people who were excited, people who were afraid, people who were pissed, and people who wanted change and spoke up. They spoke over CEOs, media, newspapers, government, lobbyists, and politicians.
HERE’S WHAT THEY SHOULD MEASURE: LRI otherwise known as Lost Revenue (and goodwill and customer loyalty) of Idiots.
While Macy’s and most other department stores are/were measuring ROI, Zappos is cleaning their clock, delivering value, connecting with and responding to customers one on one, and building a billion dollar empire in less time than it took Macy’s to expand to a second store 100 years ago.
Webinars on the subject of ROI of social media are likely run by the same people who thought Amazon.com wouldn’t make it. If Bezos measured the ROI at Amazon in the first five years, he would have quit. He accomplished domination while Barnes & Noble was measuring ROI, and Borders was going broke.
Amazon now has total market dominance based on leadership, vision, and technological excellence. Same with Apple. Microsoft used to laugh at them, now their employees all have iPads and iPods at home.
Measure? No, INVEST RESOURCES IN SOCIAL MEDIA WITHOUT MEASURING. NOW!
It’s way too soon to measure.
MAJOR POINT OF UNDERSTANDING: If they had measured the ROI of TV, or the computer, or the automobile, or the telephone, or the Internet after 5 years, NOBODY would have gotten involved, and we’d be in a technological bog – sinking.
Wake up and smell the opportunity!
People guarding nickels have no idea of the power or the value of business social media, much less social media. They have no idea of the lost opportunity, or the lost revenue. They have no idea of the perception and participation of customers.
My bet is people who measure the ROI of social media HAVE NEVER TWEETED. Wanna take that bet?
I define these people as the ones who still have a small rubber circle in the middle of their keyboard – completely out of touch with what’s new, and trying to prevent the unstoppable force of progress, and customers.
Wanna know who else “measured” financial return?
Blockbuster measured online movie services.
Blackberry measured smartphones.
Microsoft measured music players.
Billion-dollar MIS-MEASUREMENT: Bank of America DIDN’T measure or understand the power of Facebook. They were greedily measuring increased revenue from debit card customers. Their billion dollar loss paled in comparison to their complete loss of goodwill. I doubt they will recover in a decade.
All of those companies are/were foolish.
Here’s an easy plan to get rolling in a week or two:
1. Gather the email addresses of EVERYONE in your world.
2. Create a first-class, well tagged with key words, business page on Facebook, LinkedIn, and Twitter.
3. Start a YouTube channel by inviting your customers to film WHY they bought from you.
4. Map out a strategy, and goals for engagement, for Facebook, LinkedIn, Twitter, and YouTube.
5. Assign someone to monitor, post, and RESPOND to all who engage.
6. Create six value-based messages, two each for Facebook, LinkedIn, and Twitter.
7. Shoot 2-3 value-based (something your customers could use) videos and post them on YouTube.
8. Invite all of your customers to join you by sending examples of your value messages. I recommend one campaign per media for four weeks – but have links to all in each email.
9. Post something every day on Facebook. Tweet something every day. Link with 2-5 people every day. Post one video a week.
10. If you really want to create some buzz, convert your contacts to Ace of Sales (www.aceofsales.com) – and send emails that differentiate yourself from the competition.
10.5 Only listen to your lawyer if they tell you what you CAN do.
Jeffrey, you’ll probably find varying levels agreement in the marketing & PR community with your views. I certainly hear you. But can we sell it to the powers-that-be at companies that are still not convinced of the benefits of new media engagement and conversation? Having faith or trust in social media may not be enough, and I’m not sure we should quickly dismiss businesses still sitting on the fence because of the ROI dilemma. CFOs know what they get with pay-per-click. Sentiment value -- that’s another matter. Sure it works for companies such as Ford, Zappos, Dell and Southwest Airlines, the usual suspects when marketers extoll the virtues of social media marketing. Dell once reported it made $1 million on computer sales just from Twitter postings. That’s OK, but Dell has been around since 1983, its products already are in huge demand and "goodwill" was established long before the Internet even existed. Your average small computer company (or any business) probably will not make an instant $1 million tweeting sales deals and promo codes. Despite all of the books and posts, social media ROI remains a conundrum and it’s looking more and more like a universal measurement standard will remain an elusive goal. “It’s way too soon to measure.” You may be right in that sentiment and certainly others have said the same thing. But that’s a tough line to deliver in a competitive pitch for new business.