Ignore the ROI of Social Media

That’s right. Ignore it completely.

It’s stupid. It’s a stall tactic. “What’s the ROI?” is often a cop-out question asked by people who don’t really want to do or understand social media. If you’re asked this question when you first start talking to someone about social media, distract them. Jingle your keys in front of them or something.

I heard Scott Stratten (@unmarketing) speak at the Social Media Club Chicago this past week, and he said something that made me want to pump my fist and shout “F— YEAH!!!”

Photo of Patrick Roy

No, no, I meant R-O-I, not Patrick Roy (wah).

“The next someone asks you about the ROI of Twitter,” Scott said, “substitute Twitter with the word ‘talking.’

“What’s the ROI of ‘talking?’ How much money do you make with this new ‘talking’ business? I don’t understand why you’re ‘talking’ to customers all the time.”

F— YEAH!!! </fistpump>

Twitter, Facebook, LinkedIn, blogging — they’re all tools for communication, just like talking. But we don’t measure the ROI of talking. We measure total results, usually as a sales figure.

I love networking. I go to networking meetings, and I talk to people. I meet those people later for coffee, and talk some more. My cost is the driving, the time, and the coffee (medium decaf mocha, extra hot, please). The ROI — which I have never been asked about — comes when I close a deal, get a speaking gig, get a referral for a new client, or even get a book deal. That’s something I can measure after the fact. But I can never figure it out beforehand.

An example: the first time I ever met my good friend and writing partner, Kyle Lacy (@kyleplacy), for coffee was nearly three years ago. I think I bought my own coffee, but I could be wrong. (I probably am.)

Total cost? $4.20 (mochas ain’t cheap, Chester).

But what did I get out of it? Over the last three years, several speaking opportunities, collaborating on a couple projects, a little business passed back and forth, and two book deals. And he’s bought lunch a couple times. So the ROI is pretty damn high, especially if he did buy the coffee. [Update: I checked with Kyle. He bought the coffee. He always buys coffee for first meetings. Looks like I owe him a cup.]

I’ve never had to justify the ROI of talking. No one does. So why should we justify the ROI of Twitter and Facebook? They’re tools that let us talk. If we have to explain their ROI, then show me the ROI of your cell phone. Or your desk phone. Or your laptop and email. Show me the ROI on a handshake.

Otherwise, stop asking me about it until you start using it. Then we’ll figure it out.

(Note: This is NOT to say that social media should not be measured. It absolutely should. But if you ask about ROI at the beginning of your efforts, you’re setting up for failure, because you don’t know what you’re trying to measure. Instead, try it, use it, jump into it. Get good at it. Then measure how much money you’ve made on it. I’ll talk more about how — and why — to measure the ROI of social media next week.)

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    About Erik Deckers

    Erik Deckers is the President of Pro Blog Service, a content marketing and social media marketing agency in Indianapolis, IN. He co-authored three social media books, including No Bullshit Social Media with Jason Falls (2011, Que Biz-Tech), and Branding Yourself with Kyle Lacy (2nd ed., 2012; Que Biz-Tech), and The Owned Media Doctrine (2013, Archway Publishing). Erik has written a weekly newspaper humor column for 10 papers around Indiana since 1995. He was also the Spring 2016 writer-in-residence at the Jack Kerouac House in Orlando, FL.

    Comments

    1. I agree, but also, it seems to me quite easy to measure the ROI of social media so long as you can measure the ROI of any marketing system. So, you send out a mailshot and measure the ROI of that but it’s not real, those who enquire are probably not seeing you for the first time, they are probably responding having seen one of your ads, browsed past your website and seen you with a crowd around you at an exhibition. If we attribute the mailshot with the enquiry and all the income that flows from that too, then act on that we will only ever send mailshots. But the mailshot is the call to action. It’s the rest of it that set up your brand in the customers’ eyes and made them want to respond when the next opportunity arose. That seems the bigger problem to me. If that’s solved, attributing ROI to social media just seems like saying “Ah, Geoff, he spends 2 hours a day on social media .. how many sales leads has Geoff brought in .. oh look, quite a few”. Either that or let Geoff do his thing, if it works it works and just like if you put two people in a room, one may get a sale and the other nothing, the ROI of social media is .. like the ROI of conversation .. all down to the person.

    2. Paul Lorinczi says:

      I agree with Scott’s premise that people use ROI as the excuse not to do something.

      The beautiful thing about web projects. You can apply a small amount of budget to test some things out and then measure, adjust and find out what works. The risk is far lower than some think.

      My takeaway was the replace “social media” with “talking”. We don’t there is an ROI on “talking” with our customers. Excellent advice.

    3. Chuck Gose says:

      And, ironically enough, here we have Mashable with a post about Social Media ROI. How timely of them.

      http://mashable.com/2010/11/05/calculate-roi-social-media/

    4. Chuck Gose says:

      I think sometimes the confusion is that many expect ROI to be a data calculation when in fact, as you’ve pointed out, it can be largely anecdotal. Maybe the return is solving problems more quickly than you have before. Maybe it’s building out or strengthening your network. So there will always be ROI groupies, but they need to learn it’s not all about numbers.

    Trackbacks

    1. […] week, I talked about why it’s important that — at least in early discussions — you ignore the question of “what’s the ROI of social media?”. That’s because, as Scott Stratten said, you can substitute words like “Twitter” […]

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      […] This post was mentioned on Twitter by Lorraine Ball, Despi Ross. Despi Ross said: RT @roundpeg: Next someone asks you about ROI of Twitter, …What’s the ROI of ‘talking? http://problogservice.com/2010/11/05/ignore-roi-of-social-media/#ixzz14mfLAhk3 (via @edeckers) […]

    3. Tweets that mention Ignore the ROI of Social Media | Professional Blog Service -- Topsy.com says:

      […] This post was mentioned on Twitter by Erik Deckers, Jeb Banner and problogservice, kelly hendricks. kelly hendricks said: RT @jebbanner: “@edeckers: New post: Ignore the ROI of Social Media http://bit.ly/9a6BL6” great post and true. […]