Several months ago I contacted a certain big company. One that's been using social media very well, and that's often used as a case study for how businesses can successfully use social media. I wanted to know what was their direct bottom line impact from social media? How had sales increased or decreased? What was the ROI of their efforts in terms of dollars?
Their answer surprised me. "We have no idea."
They further clarified "My boss has never asked for the ROI, because he sees the value in our efforts."
If you'll notice, I've been asking companies when I interview them in the Social Media Mavens series about ROI.
Best Buy's Gary Koelling had this to say about how they track the return on Blue Shirt Nation:
"I could correlate half a hundred metrics we watch as indicators of how we’re doing as a business with half a hundred metrics we watch as indicators of how we’re doing as a social network and probably correlate half a billion dollars in growth or savings as a result. One reason I don’t is because I don’t care, it doesn’t interest me. In fact it makes me sleepy. The other reason is that my sponsors have never asked for it. Not only do they see the value but they understand what happens when you measure things you don’t fully understand. A machine, any machine, will tend to become its own criteria. If I measure how effective BSN was at reducing turnover, it would become a machine that reduces turnover. I’m sure it does or doesn’t have an effect on turnover. The bottom line is it’s a network of humans, a true and thriving and vibrant network and every time someone uses it, it’s more valuable to the next person that uses it."
Kodak's Tom Hoehn said this is what the company measures the effectiveness of its A Thousand Words blog:
- Reverb – That comment we noticed multiplied by the number of followers, fans, friends, BFFs, etc. the person making it has.
- We are after hearts and minds instead of eyeballs. We feel we have a good story to tell on many levels and it seems to be resonating with people.
- We of course look at table stakes measures like page views, refers, search ranking, etc. If you don’t do those things by now your head is probably swimming from all of the other information I have shared ;-)
- ROI is the holy grail we are all chasing but we like to think that return on ignoring (thanks @DavidAlston) is even worse.
PepsiCo's Bonin Bough said this about how Pepsi tracks the ROI of its social media efforts:
"All our efforts in the social media space are totally focused on ROI, and demonstrating the value of engaging with consumers on social media platforms. Measuring a program against key metrics and relationships is really important as we scale up our social media work across brands. For Trop50 specifically we are working with Ogilvy and their Conversation Impact model which tracks key metrics that ladder up to Reach, Preference and Action."
Graco's Lindsay Lebresco said this about how the company measures the effectiveness of its company blog:
"We use a variety of methods, some of them fairly standard (how many comments, how many links, how many visitors, how many clicked through to Gracobaby.com, etc) and we also look at the engagement of our readers. Are readers coming back over time?, how often are they commenting?, is the relationship with our blog readers extending to other SM platforms of ours?, etc) SEO is certainly another measure we look at."
These are some of the largest and most successful corporate social media case studies on the planet. And in re-reading these quotes, I noticed two things:
1 - None of them are mentioning the direct ROI (in terms of dollars) on their social media efforts.
2 - All of them can see the VALUE in their efforts, and apparently, so can their companies.
Some people will argue that if you mention the ROI of social media, that you have to speak in terms of dollars in, and dollars out. I'm not going to argue that point, but based on what I'm hearing from BIG companies that are having success with social media, they are getting C-suite buy-in and continued support from their efforts because they are creating something that the c-suite sees the value of for their companies. I especially thought Gary's comments about Blue Shirt Nation were interesting and not wanting to turn BSN into a 'machine' for a particular metric.
All of the above companies would likely be hard-pressed to find an ROI for their efforts that fits a pure business definition of the term. Does that mean their efforts are a failure? Or does it mean that the end goal should be that our social media efforts should generate something of value? Are we too hung up on finding the ROI of social media, or should we be focusing on value creation?
At the end of the day, should companies engaging or considering using social media ask 'What's the ROI of our efforts?' or 'What value is being created for our business via social media?'
I'm not sure, that's why I'm throwing this out to get your thoughts.