Social media ROI? It's easy just look at the sales trend

12/11/09 01:20 AM Filed in: Social Media

Razorfish, an interactive agency, recently released a white paper on measuring social media that was, to say the least, a bit complicated. A client recently asked me what I thought about different ROI calculations for social media and I told him “at the end of the day it’s about defining your objectives and measuring your ROI against those objectives” to which he replied “right, and my objectives start and end with my weekly sales report”. We both had a good laugh over that but as we talked a little bit more he agreed that awareness today means nothing as does “intent”.

While I believe can help a company reach its objectives way to many “social media experts” deliver overly complicated models that disguise the real objective for most companies, and that is to sell product. “Why should you spend money to have a relationship with a prospect if that prospect has no intention of becoming a customer ?

Consumers are not going to spend a lot of time researching items like soap or pasta sauce via social media or any other website, but big ticket items items like electronics usually require more thought and thus consumers want some idea that their dollars are going to go to a brand that delivers on their promises.

I believe that there is no such thing as a social media expert.

The Internet is evolving quickly and frankly very few companies have implemented programs that have produced and ROI. Dell, for example, is saying that social media has helped them sell more PC’s but I’m not sure that offering people ,on Twitter, additional incentives is providing a great ROI. This tactic is more promotional and that leads to an erosion of brand equity as Dell has found out with margins going downhill fast.

Burger King’s Facebook page has been heralded as a social media success but they continue to lose share to Mc D’s. Coke’s page has a hell of a lot of people but does that mean that these people are going to buy more coke? Hell, do people even want to have a relationship with a soft drink?

Businesses are in business to make money and the reason that a lot of corporate America has not embraced social media is that they don’t understand the channel and, more importantly, they are not convinced that it can help them meet their business objectives. Talking with your customers and prospects is nice, according to most SM experts, but the reality is that it takes time and money to implement and deploy a SM strategy.

So when a client asks me “what can we do with social media?” My response is always going to be “what are your objectives” and provide a solution that meets those objectives but more importantly provide a measurement that the client says “wow, this is working”.