A different way to think about social media ROI

A different way to think about social media ROI

By Mark Schaefer

No matter who I am consulting with or where I am speaking, the “social media ROI” question is bound to come up.

I have a different view of the ideal role of social media in the marketing mix that might be helpful to you, whether you are just starting out, or whether you have an established program.

Before I get to my perspective, I would like to declare two caveats.

First, I am going to give you ONE view. There is no one-size-fits-all social media plan or best practice for an organization.  So consider this as one helpful suggestion.

Second, you MUST measure and continually seek to refine your measurement. Do not use the following perspective as an excuse to not measure.  Even if you cannot precisely measure the financial return on a marketing effort (which is not unusual) we need to be alert to the key non-financial indicators that demonstrate that we are contributing to stakeholder value.

OK, here we go.

The complex media world and social media ROI

I recently had the honor of speaking at a national automotive conference and learned about the incredible challenges involved in selling a car these days. Yes, buying a car is a big deal, but the purchasing decision is probably complex for any business these days.

Did you know that, on average, it takes 75 days from the point an interested consumer first visits a dealer website to the day a car is purchased? At the point where social media marketing first begins to touch a potential customer, they may be far away from making a purchase decision — maybe years! This makes it menacingly difficult to determine what ultimately led to a purchase. Was it something they saw on Twitter or Facebook a month ago, a newspaper ad, a drive-time radio spot, or a powerful recommendation from a friend? And how was that friend influenced?

Most likely it is a very complex stew of ALL these things that build up over time, and this is precisely where social media fits into the equation. It is a legitimate part of a mix of communications that leads to a customer relationship.

The importance of small, consistent interactions

We build our emotional attachments with companies and brands like the way we build our friendships — through lots of small, consistent interactions that lead to deeper forms of engagement.

nike tattooIn my social media marketing workshops and speeches, I have fun referring to a photo of a person who has actually tattooed a company logo on their body.  Isn’t that kind of like getting married to a brand?  Isn’t that the ultimate commitment?

Some marriages, like some tattoos, may occur after a night on the town that got out of control. But more likely, these events occurred after months or years of connection through lots of small interactions that lead you to believe that, yes — I am totally in love with this experience.

The drip, drip, drip of content 

The biggest measurement problem companies face is that they have been conditioned to think of social media as advertising. You put some ads out there, create attention and awareness and wait for something to happen. And, while it is possible to achieve some fast results with social media, it is unlikely.

The more accurate comparison is not to how ads work, but to personal networking initiatives. Have you ever tried to sell your products and services through networking at a trade show or local networking meeting?  It might take months or even years before you connect with people in a deep way that leads them to actually buy something from you.  You keep showing up, showing up, showing up. You liesten and learn about their wants, needs, and opportunities.  And you patiently try to be helpful over time so that when that purchasing event takes place, you are at least on the radar screen and part of the conversation.

Through our content marketing — and I use that term somewhat interchangeably with social media marketing because content makes the social world go round — we provide this constant drip, drip, drip of small provocations that create opportunities to engage. The goal is to drive that level of interest and engagement up over time until they take some action like a purchase, a registration, a call — whatever you are trying to do to support your business goals.

Think in terms of qualitative measurement

Whether you work in sales, PR, HR or service, I believe this is the most likely benefit of a social media initiative — creating relationships that lead to trust, action, and eventually loyalty. Here is a partial list of tangible benefits social media relationships have created for my business over the last two years:

    • Became a contributing columnist to my blog
    • Co-authored a book with me
    • Provided an invitation to speak at Oxford University
    • Hired me for a corporate social media workshop
    • Helped me create the Social Slam annual conference
    • Donated to my charity
    • Helped me get a government contract
    • Hired me as a keynote speaker
    • Gave a copy of my The Tao of Twitter book to will.i.am
    • Became  a regular cartoonist for {grow}
    • Became a strategic business partner
    • Assigned all of my books as required reading for his college classes
    • Contributed a positive review for my book on Amazon
    • Became an intern
    • Took a day out his time to take me on a tour of his home town of Stockholm

Some of these important and undeniable business benefits — like speaking at Oxford or a positive book review — are exceedingly difficult to record in a financial spreadsheet!  Those types of benefits are “qualitative,” not quantitative, because they are a measure of relationships, not sales. And yet, it IS a value, isn’t it?  We would be pretty dumb to ignore that and yet most companies do.

Of course, the ultimate goal is to measure true Return On Investment but that is not always practical, especially for a small business with limited resources.

And even if you CAN truly measure ROI (a strictly financial measure) to accurately demonstrate the complete value of social media, you should still establish an ability to record and acknowledge these powerful qualitative benefits or you’re going to miss the whole picture. This is why small and medium sized businesses may have an advantage in this space. If they are closer to the customer, they may have a better ability to be tuned into these benefits.

Again, this is a short blog post and of course there are many, many other values of social media and measurement strategies. This is just one idea, not a prescription for social media measurement for your business and I would really value your perspectives on this in the comment section. Thanks for reading today!

SXSW 2016 3Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant.  The Marketing Companion podcast is among the top business podcasts in the world.  Contact Mark to have him speak to your company event or conference soon.

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  • Steve Woodruff

    Mark, you’re dead-on about the “stew” of influences (including social media), and the long-term view of how decisions get made. This is exactly how and why it went down when I finally bought a Ford Fusion last year: http://brandimpact.wordpress.com/2012/09/17/four-reasons-bought-ford/
    ROI narrow-ists want to have, as much as possible, direct and immediate measures. This has merit for short-term tactical campaigns, but it’s just a wrong mindset when applied to long-term customer relationship-building. I might be able to influence my kid to take a specific action through a specific directive on my part (directly measurable), but that’s not the same as growth and maturity…

  • I was amazed the first time I saw a Harley Davidson tattoo on someone, years ago before social became ingrained in our lives, a first for me but certainly not the first brand tattooing. That was the utlimate show of a brand advocacy. I thought, how could someone be such a brand loyalist? After some study I realized, it was the brand that was delivering…the “drip, drip, drip,” of listening and delivering an identifiable affinity. You are so right Mark, today more than ever, create relationships that lead to loyalty.

  • Yes, that is exactly right. That is precisely what I teach in my classes. This is how social media fits in the marketing mix and most people miss that.

  • So true Mark. I see the same thing happening in digital marketing outside of social, and I think they are both happening because of the same reason:

    As marketers, we are confusing the overwhelming volume of data digital and social media create with complete data.

    Just because someone follows us on Twitter doesn’t mean they are actually paying attention to us. Just because someone liked us on Facebook or clicked to our site doesn’t mean we then made a positive impression. Just because someone recommended us doesn’t mean their recommendation carried weight (I believe you flagged once the case of Chris Brogan recommending a leather jacket…). Just because they pinged us a question on Twitter before purchasing doesn’t mean Twitter was the source; clearly they were already thinking about us, what made that happen?

    The data we have is often, in reality, about a subset of total activity (and if your a stats guy, it isn’t a nice random sampling) and without most of the context for the reason behind the activity.

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  • Good stuff Mark! I really like this, “the most likely benefit of a social media initiative — creating relationships that lead to trust, action, and eventually loyalty”

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  • Bookmarked to read, and comment ASAP Mark! (My plate runneth over)

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  • You are a wise man Eric Wittlake. Thanks for adding your superb perspective!

  • It works! : )

  • Frances Archer

    What works best in presenting qualitative benefits of social media to clients? I’m working with entrepreneurs and small businesses and I often see qualitative results getting overlooked in favor of the quantitative results.

  • Great post, Mark — I love the marriage metaphor when it comes to building relationships with customers online.

    The advantage I believe small businesses have in social media is the opportunity to show their humanity — easier as you said since they’re closer to the customer — and make social a very personal experience for their customers, which was the original intent behind social networking before businesses jumped in to take advantage of the space.

    The most personal, relevant and valuable online experiences (and those happen over time) will also be the most sustainable and profitable.

  • Tim

    A gentle approach to ROI in social media seems to be the best route I feel and your post sums this up nicely.

    I did bumped into this BBH review of their approach to a campaign to lift the profile of a UK organic dairy company a couple of years ago.

    I thought the graphic displaying “bought” “owned” and “earned” media was a great way to relay to a C suite / manager the objectives and goals in using a broader media campaign in the 21st century. How often do managers think that bought is all there is? And how often do SMEs fail to appreciate the benefits of telling a good story as you pointed out. SMEs even if they don’t follow the above Total plan (!) can remain fleet of foot in social realms.

  • Amen Sarah. So great of you to take the time to leave a comment today. Thank you!

  • Quantitative results are comfortable. They’re known. They’re comparable. They make pretty graphs for charts and presentations. But the best companies are starting to look beyond the numbers for other real business value and those are the companies who “get it.” : )

  • “ROI Narrowists.” love that. WIll probably steal that one Steve. It’s how I roll baby. : )

    There are exceptions, but I think you’re right, social media is for the long-term and I can see how a company would hate that!

  • Ah, Mark, this post came just in time. I am preparing for several short, small group meetings with members of our system Board and other leaders to discuss some of these qualitative benefits of blogging and social media. You have helped me immeasurably, as usual. And don’t worry, I will have copies of all your books on the table for these “chats.”

    Some people still think I am “wasting time” and money (how much could I generate for the organization if I saw and billed two patients for every hour I spend blogging?), so the CEO asked me to do this. When I show them how many page views and comments I received on my latest post on Nurses Week, or how complete strangers write me notes about how they WANT to support the good works we are doing, I know I am succeeding at building “trust, action, and eventually loyalty.” And building trust was what I was focused on from the very beginning!
    It all goes back to one’s original focus, strategic goal for the blog or one’s presence on any social media platform. That’s why so many cannot do the qualitative measures–they don’t know how to measure success because they didn’t define it at the outset.

  • I just realized that I did not answer your question in my first response below. There are a variety of techniques of course. One big company i work with is actually having customer service people record the “stories” that indicate benefits. One time, I even used video to record customer responses to a project. Even creating a list like I have here makes sense. The most important thing, I think, is to begin to condition executives to look for these kind benefits as legitimate bonuses for the business.

  • Really, there is no greater goal for a healthcare facility than building trust so you could argue that there is no great communication tool available than the opportunity for personal connection through social media, right? Good luck with your meetings!

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  • Frances Archer

    Thank you. Love the idea of recording stories.

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  • Mark,

    This was written over 2
    years ago and is still very relevant. We will realise the ROI of social media
    only if we are in for the long run. We have to keep showing up with useful
    information and be on the radar of our audience. Ultimately be present in their
    mind when they are ready to take action.

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