Tag Archives: ROI

Hang Up Your Hang-Ups: The ROI Myth Dispelled

That’s it – I’ve HAD it. For years now, I’ve paid one telecoms service provider after another for my mobile phone, month in, month out. And you know what? In all these years, I’ve never ONCE received any return on investment for this!! Can you believe it??!! I’ve been a good customer, paid on time, and have never once received a single penny back from these communications charlatans. I’m cancelling my contract – there’s simply no ROI to be had from my mobile phone.

Ludicrous? Yes. Absurd? Yes. Why? Because, quite simply, the value of a mobile phone comes from the service it provides. The fact that it doesn’t generate revenue for me is irrelevant – it’s a communications tool that makes everyday communications infinitely easier and more convenient – that’s its value.

And you know what? I’m sure more astute readers of this post will already have twigged where I’m leading with this (you’re a smart bunch) – the same can be said for Social Media.

I’ve been having an interesting discussion this week with a senior marketer in the Marketing Professionals’ Network on LinkedIn. He claims that he often has difficulties ‘selling’ Social Media to his clients because they want to see demonstrable transactional ROI before they commit to using this channel.

But, just like the humble mobile telephone, Social Media is a COMMUNICATIONS tool. @smashadv, an American copywriter / ad man I regularly converse with on Twitter, sums this up succinctly: ‘Comm-Unity’. Enough said. So why do so many people remain hung up on ROI? Is it because they, blindly, still consider Social Media as a marketing device, rather than a communications channel? I really think it is.

Sure, an e-commerce platform delivers verifiable sales – visible, accountable ROI that keeps the bean-counters happy to invest. But what drives consumers to that platform in the first place? A special offer announced on Twitter? A coupon posted on Facebook? Discounts offered to people checking-in on Foursquare? An email voucher? All of these and more?

As marketers and advertisers, we are in the communication business – plain and simple. It is our job to convey the right messages, to the right people, at the right time. And how do we do this? Through communications channels, plain and simple.

So if you still have clients hung up on ROI, take a few moments to ask them if they use a mobile phone. I guarantee that none of them could live without it, despite its lack of ‘measurable’ ROI.

JUST LIKE SOCIAL MEDIA.

Why all the hang-ups on ROI?

It genuinely, genuinely amazes me that so many marketers remain sceptical when it comes to social media. ‘Not being able to measure ROI’ is an oft cited ‘reason’; however marketers subscribing to this misguided view are in reality, missing out on real value.

It’s certainly true that social media now uses considerable marketing resource. A few years ago, many businesses considered a company blog the very height of digital innovation, and perhaps ‘Literate Linda’ from accounts was left to update it once a week with news of the company raffle. These days (thankfully) have long gone and social media is now a sprawling mass of interactions across multiple platforms.

We now have brands interacting on Twitter (the undeniable darling of the social media world), talking with consumers in forums, social network sites, mobile applications – the list grows exponentially every week. Despite the advent of social media however, the doubters are right in one thing – we don’t yet have a way to measure commercial ROI – but why should this be the yardstick by which social media’s value is determined?

From a business perspective, one of the biggest benefits of social media is the fact that it allows brands to interact with their consumers. Web 2.0 has killed off the days of one-way marketing communications – consumers no longer accept being ‘talked to’; they want to be part of the conversation – which is where social media comes in. Focus on providing excellent customer service and brand experiences and this will be replicated in social media channels again and again and again.

Similarly, social media puts faces to faceless corporations. Building relationships on a human level benefits businesses enormously – how could it not? Discussions on networking sites (such as LinkedIn) allow companies to listen to what their consumers are talking about, what their concerns are, what their needs are. What makes them tick, how your business can help them.

No ROI? I beg to differ.

The times are changing. The times have changed. And for those waiting on the sidelines, still wondering whether to get involved, you’re missing a valuable trick. Yes, we’re still waiting for a way to quantify monetary ROI for social media. But sometimes marketing isn’t about money. Worrying about social media ROI can blinker you – and ensure that you miss out on something of real value.