I’m so sick of the “what’s the ROI of social media” question. It’s asked by people who a) think it makes them sound clever, and they’re hoping to show that social media “doesn’t work,” or b) think they’re supposed to ask it, because they read an article that said they should ask it.
The problem is, we can’t answer the ROI question during out first meeting. We can answer it after your social media plan has been up and running for six months. We set goals and then measure to see whether you made them. We count how much money the social media campaign made — because we can do that — and we subtract how much money it cost.
But we can’t predict it accurately beforehand, and anyone who tells you they can is lying.
What about you and your business? What’s the ROI on the stuff and the staff at the office? Have you measured them? All of the things you buy and the people you hire have a direct impact on your bottom line. Some contribute to revenue, some take up space, and some are a drag on your bottom line. And yet, the people who are so quick to pull the “what’s the ROI of social media?” trigger haven’t asked that question about anything else in their own business.
So I’d like to see companies start measuring ROI on these things.
- Your college interns.
- Your brochures. You pay professionals to design these things. What have they gotten you?
- Your weekly staff meetings.
- Every other meeting you have to attend. They’re a big time suck and productivity killer. Yet we go to them without question. So what’s their ROI?
- The person who answers your phones. Don’t you think the voice of your company contributes to customer satisfaction?
- Your accounts receivable department. What does it do to your cash flow if they’re on time versus late with sending out invoices?
- The paintings and furniture in the front lobby.
- Your telephone hold music. People actually study this kind of thing, so it should be possible to figure out.
- That lunch meeting you had.
- Your mobile phone.
- The company mission statement that took eight people three months to write over six hour-long meetings.
- Your membership in three different trade associations. You should get valuable sales and clients from these. Are you?
- Your Chamber of Commerce membership.
- The company car. Lease costs, gas costs, maintenance. Are you making your money back on that?
- Your HR department.
- Your legal department. They’re great for keeping you out of trouble and for helping with intellectual property. How much did they make you this year?
- Your sponsorship of a Little League baseball team.
- Your fax machine. Seriously, do people still use fax machines? They have online services you can buy to send and receive faxes, instead of paying $40 a month for a separate phone line.
- Your voice mail system.
- The PR agency you hired for your latest campaign. And none of this “this is what your media coverage is worth” stuff — how much money did you actually make?
- Your office coffee machine.
- Your annual industry conference in Las Vegas.
- The business class flight you took to get to the conference. Execs need more leg room than regular staffers, apparently. So did you make more money by taking the more expensive flight?
- Your trade show display. These things are expensive. But did you make the money back?
- Your marketing department. These are the ROI experts. How much money did they make you?
- The cleaning service.
- The office Christmas party.
- Your office location. Retail stores can demonstrate how one location outperforms another. But what do you get for where you’re located? Do you really need an office downtown in the big city, when a location in the suburbs will cost less?
- The water cooler.
- The TV commercials you ran on cable TV for six months in 25 major markets.
- The IT department.
- Your CIO. Should your CIO really have the same decision-making abilities over the CMO? Should they be able to tell the CMO, “no, you cannot use social media tools to help market the company”? Hopefully they generated revenue to make up for all the lost sales they just caused.
- Staying at the conference hotel instead of a cheaper hotel a mile away.
- Your sponsorship of the local chamber event.
- The 90-minute morning networking meeting you attended. You go to this once a month. Have you gotten sales directly from going?
- The giant flat screen monitor in the conference room.
- The big table in the conference room.
- The conference room.
- Your administrative assistant.
- The company website. If you don’t sell anything on it, is it still making you money? Why did you spend $10,000 to get it designed?
- Subscriptions to all the business magazines that decorate your lobby. Did you even read them?
- Your newspaper ads.
- Your business cards.
- Casual Fridays. And while we’re at it . . .
- Appropriate business attire. There must be a reason we have to dress up for work. So how much money did you make from it?
- Your customer service department. You know how much they cost you, but do you measure how much they made you?
- The accounting department.
- The 12 books on new management ideas you bought and never had time to read.
- Your industry trade magazines.
I am not opposed to the social media ROI question. I just think it’s an easy fallback question that people use as an excuse, whether it’s out of fear or disdain. And I encourage businesspeople to ask that question. After all, you’re going to spend money on it, so you’d damn well better know how much money you’re making from it.
But you should do the same thing for some of these other things you have in your business as well.
Photo credit: duncan (Flickr)