Using Social ROI to measure relationships is just wrong
By Tshwaraganang Tshikedi, Digital Analyst at NATIVE VML

While many may agree that social media is not for everyone, the bandwagon of
businesses in the social space continues to gain momentum. And with social
referrals increasing in the last quarter of 2013 according to the
AdobeDigital Index, it is not unreasonable to hear more businesses asking
about being on some social network or the other.

However, as with the adoption of any new medium or service, the question of
Return on Investment (ROI) is soon to arise, seeing as the decision of which
medium to adopt hinges on whether it will bring in any positive returns. The
problem here is that often these returns are measured solely in monetary
terms, even when the reasons for taking up the medium are tied directly to
some other business objective. For many online businesses these returns
translate to leads generated, in order to maximize their Revenue per Visit
(RPV).

For instance, a business will provide some customer support services on
social media in order to cut call centre costs. The costs considered are
often around infrastructure, including telephones, rent, etc, without
considering the costs of hiring the right personnel. The returns expected
are meant to be reflected in the financial statements. As such, more
businesses get onto the social bandwagon expecting to literally see money
generated without considering all possible costs incurred.

Often the social function of the business lies solely with the marketing
department, even when the business objective is linked directly to the sales
or customer services department. The expectation to generate leads then lies
completely with someone who is not equipped to do so. Obvious as it may
seem, this is not the biggest problem in this scenario. The problem lies
with the expectation to generate sales through social media.

In fact, according to Monetate’s Q4 e-commerce report email outperforms
social in terms of conversion rates. This was made evident by the number of
sales driven by social media during America’s Black Friday. This is because
by nature social media are meant to facilitate leads, not to generate them,
often referred to as lead nurturing – which is the process of building a
relationship with potential clients, even though they might not be looking
to make an immediate purchase. The idea is to leverage the relationship that
already exists rather than seeking to immediately create one, acknowledging
that the need to make a purchase may not be immediate, yet availing yourself
to be top of mind when it does.

Most businesses tend to believe that the relationship they form with their
customers ends when a sale is made. On the flip side, for most customers the
relationship with a business is started when the sale is made. By blurring
the lines of where the relationship starts or ends it becomes easier for you
to nurture the relationship from infancy and thus nurture the lead from
consideration.
Much like with your friends, Facebook allows you to manage your
relationships. And while new ones may be created through it, it is still a
tool to manage such relationship. Similarly, Twitter allows you to monitor
and influence conversations that may involve you. In your influence you may
start new conversations but it is still only a tool to start the
conversation. It is in understanding what each medium allows you to do that
you can understand the sort of relationship you have formed with your
potentials and how to leverage it to make conversions.

And so, unless you can really tie some monetary value to a relationship, it
would be very difficult to calculate ROI from social media from a monetary
perspective, and wrong. As a business you need to stop being preoccupied by
the rands-and-cents of the medium and be more concerned by how you make it
work for you and your customers.

The marketing relationship is as different to the sales relationship as it
is to the after-sales relationship. Your approach then, to social media
should not hinge so much on the ROI as it should on the relationships you
build. This goes beyond calculating variables as fleeting as “the value of a
like or follow.”

Once you have the right people nurturing the right relationships with the
right audience, then you may measure ROI the right way.

COMPILED ON BEHALF OF NATIVE VML BY CATHY FINDLEY PUBLIC RELATIONS
MEDIA QUERIES CONTACT NICOLLE KAIRUZ ON 0114636372 OR
NICOLLE@FINDLEYPR.CO.ZA.

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