Is social media just a customer service play? Is social media appropriate for B2B (define)? What's the ROI (define) of social media? These are just a few of the questions that many are wrestling with when it comes to social media.
What Is the ROI of Social Media? Your Company's Survival
When I'm asked about the ROI of social media, a few of my favorite replies are: a) what's the ROI of your phone? and b) the ROI of social media is that you will exist in five years. These rejoinders are designed to get attention as well as change the mindset of how we think about social media. However, as we probe deeper into these difficult social media questions, it's often helpful to let history serve as a guide. After all, history repeats itself because nobody listens the first time.
As we travel back several years to when search engines started to appear on companies' radar screens, we see a similar pattern to what we see in social media today:
Similarity: Today we see many companies dragging their feet when it comes to social media.
Similarity: Many feel that social media is simply a B2C play; this thought will be laughable in the near future.
Similarity: Companies set aside a small and set budget to run paid advertisement on YouTube, Facebook, Twitter, etc. and measured them just like their other channel programs. Investing in social media is a step in the right direction, but the "paid" side is really only a tiny portion of the much larger social media opportunity. You are doing a great disservice to your company and customer if this is your only social media play and treat it like just another channel.
Companies that invested early in SEO to rank high organically for major terms like "cheap travel" and "home loans" saw the fruits of their labor in increased revenue. They didn't restrict paid search campaigns with budgets; rather they took on an "all you can eat" approach in relation to their goals (leads, cost per acquisition, cost per sale, etc.). They also understood that the first click might not result in an immediate sale, rather that it was the start of a fruitful sales process. They understood that even if the search ad wasn't clicked on, the fact users saw them listed was worth something (brand impression) and studies later confirmed this. They also did innovative things like listing 800 numbers in their search results so they wouldn't have to pay for a click (search engines quickly figured out ways to combat this "freebie"). Later on they figured out things like the long tail, contextual placement, etc.
Similarity: Companies like Pepsi, Dell, Zappos, Ford, JetBlue, Bazaarvoice, and many others are jumping in with both feet in terms of shifting resources and efforts toward social media. They would love to see other companies remain on the sidelines.
So, the question is, will your company learn from history? Will you skeptically sit in the back of the room with your arms folded like many did when it came to search? Or will you be a pioneer and let your social media efforts propel you from good to great? Will you FEAR some of the associated ambiguity (think SEO) or embrace it?
Still, there is at least one main difference between search and social. In regards to search, we as companies had the choice on whether to get involved with search or not. That is the case even today, simply Google "running shoes" and you will see that Nike and Adidas don't come up on the first page in the natural/organic listings, signaling they haven't invested in SEO. The stakes are much higher this time around. Companies don't have a choice on whether they do social media, the choice is how well they do it. So, what are you waiting for?
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Called a Digital Dale Carnegie, Erik Qualman is the author of best sellers Socialnomics (2009) and Digital Leader (2011). Socialnomics made the #1 Best Sellers List in seven countries and was a finalist for "Book of the Year." Fast Company Magazine lists Qualman as a Top 100 Digital Influencer. He is a frequently requested international speaker and has visited 42 countries. He produced the world's most viewed social media video series and it has been used by NASA to the National Guard.
He has been fortunate to share the stage with Julie Andrews, Al Gore, Tony Hawk, Sarah Palin, Jose Socrates (Prime Minister of Portugal), Alan Mulally, and many others. For the past 17 years Qualman has helped grow the digital capabilities of many companies including Cadillac, EarthLink, EF Education, Yahoo, Travelzoo, and AT&T. He is also an MBA Professor at the Hult International Business School. Qualman holds a BA from Michigan State University and an MBA from The University of Texas. He was Academic All-Big Ten in basketball at Michigan State University and recently gave the commencement address at the University of Texas. He lives in Boston with his wife and daughter.
December 12, 2013
1:00pm ET / 10:00am PT