One question that consistently comes up in social media discussions is the one about ROI on social media activities or lack thereof. Social media practitioners across companies seem to be struggling to justify their company’s investment in social media and many even question the value of doing social media.
Donald Bulmer, VP of Industry and Influencer Relations at SAP hit the nail right on the head at a panel discussion recently where he evangelized “purpose-driven” social media as the key to successful social engagement.
When planning a new marketing or customer engagement activity, the critical first step is to define the objective for that activity and tie to a desired business outcome. However, this critical step is missing in many social media activities and is often an after-thought.
Social media enthusiasts find it challenging to determine social media ROI is because there’s no clear purpose to their social media activity or the purpose is very fuzzy. Without a clear purpose, it’s challenging to gauge what resources will be needed for that social media activity and worst of all, it’s nearly impossible to measure if that activity generated any value.
On the other hand, social media activities that are touted as successful are tied to some specific business need. Two great examples are Ford with its Social Media PR strategy or Dell with the exclusive discounts (lead generation) via Twitter. Both these companies identified a specific need and used social media to solve that need and drive results.
Many social media enthusiasts justify the lack of purpose or goal by saying that they don’t know what to expect since it’s a new media and they don’t want to be associated with failure. Unfortunately, failure comes with the territory when testing any new media or channel, and without a clear purpose, it’s tough to build support for social media within any organization especially to get executive buy in.
Moreover, it’s challenging to justify resources for social media within any company, if you can’t articulate the business need that will be solved by doing the said activity, which takes us back to the point that Bulmer made about “purpose-driven’ social media. The era of doing social media because it’s cool is coming to an end, it’s no longer acceptable to engage in social media just because “everyone else is doing it”.
Like any other media, social media practitioners will have to build a solid business case for their social media activity and demonstrate how it can be used to drive real business outcomes. Starting on the social media quest without any clear direction is a primary reason why social media practitioners find their projects floundering. As Yogi Berra once famously said, “You got to be careful if you don’t know where you’re going, because you might not get there.”