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What is the ROI on Social Media?

June 5, 2009

I am often asked by people “What is the ROI on social media?”  To that I typically respond that the question is they are asking is flawed, and thus impossible to intelligently answer.  The paradigm is wrong.   How can you measure the return prior to making the investment?  The ROI is not on social media itself.  The return comes from what you do with social media, or more specifically what problem are you trying to use it to solve.   Did it help you solve a problem more quickly, more cost effectively, or in a new and better way?

“Social Media” is not the ends it is a means.  The question is like asking what is the ROI on a telephone system?  Well, it depends who you talk to, what you talk about, what you learn from the call and what you do about the things your conversations uncover?   Sure you can concoct ways to measure this generally, but to be useful you have to measure ROI based on the specifics of what you  do with social media, not on social media itself.

Well, what about web stats.  Can’t I simply measure increases in traffic or number of friends and use that as a gauge?  Maybe.  If the problem you are trying to solve is getting people to visit your web site, then absolutely that matters.  Yes, web stats are important.  Hits and views and pagerank and friends and followers matter.  They matter a lot.  Popularity has its advantages.  Still social media has power far beyond sheer volume.

Social media is not just about traffic and awareness, it is about closeness.  It is about tightening the relationship you have with the people that are most important to you.  Even if you choose to participate passively you can garner valuable insight just by listening.  You don’t need 5,000 friends or 10,000 followers to be able to listen and learn from myriad conversations that are taking place all across the web.  Conversations about you, your business, your competition, your industry, your suppliers, your city, your state, your elected officials, your biggest customers, your potential customers, strategic partners, etc… If you decide you want to communicate directly with people through social media, listening provides you with the ability to speak to them about what they are interested in as opposed to shouting at them about how awesome you are.  This is the nature of good conversation and ultimately conversations are full of rich data and insight.  Your ability to convert that data into clear and actionable information and to then make meaningful improvments to your product or service is paramount to your success and is the true measure of return on investment.

Suppose you are trying to drive innovation at your firm.  Social media can play a huge role in doing this, but to measure the return, you need to have tangible information on your business.  You could start by establishing a baseline for the number of truly successful & innovative ideas that your firm brought to market over the last 18 months.  Track the number of ideas,  where they came from, the time and resources it took to develop them, the time and resources it took to implement them, the speed and size of the adoption curve in the market, and the amount and type feedback your received from Clients.  You now have a baseline, from which you can construct a hypothesis.

Next, develop a strategy based on what you know to predict how social media will help you drive innovation.  Based on our data we believe that if we do x it will impact y by z.  This strategy  might include using social media to talk to your customers or your employees about what you need to do next.  Using social media tools to ask people about the problems they encounter and how you might solve them.  Listening to the discussions they have with and without you.  Using social media to identify thought leaders on the web, listening to their opinions, and engaging them in discussions.  Using social media to find out what your competition is planning to do.  Using social media to talk to prospective customers about what they might want.  Using social media to build trust, listen, and establish an ongoing channel for information.  Then take what you learn and do something with it.  As Goethe says ” to know and not to do is not to know.”   So if people tell you your product is awful, use their feedback to improve your product – then measure the ROI.  If people tell you that your employees are rude, train them to be more hospitable – then measure the ROI.

So how do you measure ROI on social media?  ROI on most good investments is something that builds in value over time.  Social media is no different.  Implemented strategically, managed properly, and utilized fully social media can deliver great value to any organization. Commit to it.  Give it time.  Then look at how social media and the knowledge it yields has helped you create meaningful change.  Measure the impact of that change.  Measure the increases or decreases in your key performance indicators.  Has social media helped you address key business problems?  How?  What was the change that resulted?  What does the data teach us?  If you listen, learn, and innovate based on the information you gather over time, the return on your investment is very likely to be lucrative.

Written by davidebowman · Filed Under Business & Leadership | 2 Comments 

LUCRUM Radio – Episode 11, Daniel Johnson Jr.

September 25, 2008

Daniel Johnson Jr. Daniel Johnson Jr. is one of the most prolific users of social media in the Cincinnati region.  Daniel is the founder of New Media Cincinnati, an avid blogger, podcaster, Facebook member, Twitter user, and participant in numerous other web platforms.

Daniel is successfully utilizing social media to make human connections – using the web to amplify his traditional networking activities.  In doing so, Daniel has built a loyal and large following of friends and colleagues both locally and nationally.

In this episode of LUCRUM radio, Daniel shares his thoughts on the value of social media.  He discusses how he got started blogging, and why he has continued to stay engaged in the process of creating and participating in conversations on the web. Daniel also offers some great tips for managing time and creating content on the web, as well as his strategy for maintaining multiple sites and platforms. (He has multiple blogs and 5 Twitter accounts and keeps them all on track)

Thanks to Daniel for taking the time to share his thoughts with us. It was great fun and very enlightening.

Listen in on this episode of LUCRUM Radio…

 
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Written by davidebowman · Filed Under Podcast | 1 Comment 

LUCRUM RADIO: Episode 1, Doug Ross

June 12, 2008

Lucrum Radio is our new podcasting series. It will feature interviews and discussions with thought leaders in business and technology, providing a forum for sharing knowledge with the world.

Episode 1 of LUCRUM Radio got us off to a great start. It features an interview with Doug Ross, CTO of Western Southern Insurance. In the podcast, moderated by fellow LUCRUM employee Andy Erickson, Doug and I discuss topics such as collaboration technology, crowd-sourcing, organizational dynamics, the integration of IT and Marketing, and the role technology can play in differentiating an organization from the competition.

Give the podcast a listen, and let us know what you think…

Special Thanks to Doug Ross for his willingness to participate in the project, and for doing such an amazing job of delivering insightful, innovative thinking.

 
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Written by davidebowman · Filed Under Podcast | 3 Comments 

Marketing in the Recommendation Age

May 15, 2008

“Why on Earth would your company want a blog?” “Aren’t you afraid of what people might say?” “What about your brand?” As the guy who championed the idea of the blog at LUCRUM, and regular blogging evangelist, I am asked this question almost daily. My answer is simple. “I trust our people to do the right thing.”

My coworkers at LUCRUM are smart – much smarter than I am. I know that when they talk about technology, they are passionate about it. They speak from experience and they speak from the heart. They are sincere, and that is different. They are interesting. They are real. They are the essence of “The Brand.”

I also trust the readers of the site. They can smell disingenuous corporate speak from a mile away. Yeah, I could hire professional writers to put together a brand strategy for our blog. We could toil endlessly on the exact wording of every phrase – but why? It would not be real. It would not be different. It would invisible.

Thankfully, it is real. And… it is really fun to be involved with.

Just today, we were contacted by a talented IT Professional who was so moved by Andy Erickson’s LinkedIn profile and the honesty of the blog site that she sent in an amazing letter with her resume expressing her desire to join the LUCRUM team.

This is the result of conversation.

What we hope to achieve is not just conversation, but also recommendation. In this day and age reputation is so important. What you do is far more important than what you say you do. What you do IS the marketing. It is about customer service, employee relations, innovative thinking, and delivering real value for Clients each and every day.

We are working on building a tribe. A loyal group of eager participants, fully engaged in the experience of LUCRUM. We want to create evangelists. We aspire to deliver greatness. That aspiration lives in each of us, and thus the blog serves as the platform for sharing our honest hopes and dreams for the firm. It is a metaphor for the business as a whole. It is about being “recommendable” or perhaps more properly put “remarkable.”

Are we there yet? Nope. But we have taken the steps necessary to start the journey. Each and every day we learn. Each and every day we evolve. Hopefully, we listen, we grow, and we improve along the way.

Why blog? Well if what we do is to solve business problems by using technology, than why not embrace technology to identify those problems and uncover the solutions? Why not engage our people to drive innovation at every level of the organization? Why not give everyone, including our clients and the world at large, a voice in the conversation. Why not become recommendable?

Check out the link below for a great article about marketing in the recommendation age.

Marketing in the Recommendation Age | Small Business Solutions – TheStreet.com

Written by davidebowman · Filed Under LUCRUM News | 1 Comment 

People, Technology, and Learning

March 25, 2008

As the new marketing manager for LUCRUM, there is so much that I do not understand about what we do. Here is the good news. I know that I can learn.  I was reminded of this as I was reading one of Seth Godin’s latest posts about learning.  There has never been a time in history where knowledge has been so readily available.  The problem now becomes one of attention – picking what to learn out of the vast choices of information.  I am lucky to be surrounded by technology experts, all willing to share information about the technical aspects we deliver to our clients.  Here at LUCRUM, we regularly have employees present internally on emerging technologies through our Lunch and Learn and Brain Brew programs.  Learn by teaching is deeply engrained in our culture.  This only helps to make our consultants more effective with our clients, and our team better equipped to meet the evolving needs of business.  I know I have a lot to learn.  What is better is to know that I work somewhere where I am not only encouraged to learn, I am expected to.  Combine the culture I work in with the endless knowledge provided on the web, and there is really no excuse not to learn something of value every day.  Occasionally, I might test that knowledge here – soliciting your feedback to yield even greater understanding.  What an amazing time to be alive, and what an amazing place to be living it!

Seth’s Blog: Things you don’t understand

Written by davidebowman · Filed Under LUCRUM News | 2 Comments 

Blog Training at LUCRUM

March 25, 2008

Today, I was given the distinct privilege of presenting to my fellow LUCRUM employees on blogging. More specifically, I was tasked with teaching them how to blog. I was given 90 minutes, which is a long time to talk about something that is really quite easy to do. I spent some time discussing why it is important to blog.  I touched on the changing state of marketing from that of a dialog to an interactive monologue, and stressed that their voices matter.  I then went on to talk about ways to construct posts, do’s and don’ts of blogging, and then showed them just how simple it is to use WordPress.  We touched on tools like RSS, digital cameras, Google Blog Search, and plain old note cards as ways to develop content.  We even got into some emerging tools like Alltop and Snipshot.  Overall, I think that everyone was interested.  It is tough to present to such a diverse group – especially when many are far more versed in technology than I.  The true test of the presentation will be very easy to measure.  If you see more posts from more people, it worked.  If not, I will go back to the white board.  I am convinced that the people here at LUCRUM are some of the best and brightest in the world.  My challenge is convincing them to share that brilliance with the rest of the world.  If I can, what an amazing experiment this will turn out to be.  Hopefully today was the first step in making that happen.  Thanks to everyone who attended.  You were a great audience.

Written by davidebowman · Filed Under LUCRUM News | Leave a Comment 

So You Think You Have What It Takes

February 28, 2008

I work with this amazing marketing guy, Dave Bowman. I call him Mr. Dayton because he knows, well, everybody in Dayton. He changed my life in about 1/2 an hour teaching me the farther reaching concepts of social media and how to market myself. Anyway, Dave is looking for 2 undergraduate students to fill Marketing Coordinator positions at our offices in Downtown Cincinnati. If this can grow into an internship or a co-op position for you, let’s talk and determine how we might be able to do this.

Let me tell you a bit about the position. Our Marketing Coordinator will fill a critical role in the execution of integrated marketing campaigns. Okay, what the heck does that mean? The Marketing Coordinator adds to the success of the LUCRUM’s Sales and Marketing team. You’ll support our sales and marketing efforts. How? You’ll assist with items direct mail, marketing fulfillment, database management, web management, blogging, social network development, market research, proposal development, event coordination, sales support, and more. Imagine that. You get paid to blog. In fact, it will be part of your job description.

If you have great communication skills and are looking for a cutting edge marketing opportunity, please apply. Really. We’re looking for folks with “can do” attitudes and a hunger for learning by doing. If you are the right person, LUCRUM will work around your schedule needs to make this fit for you. And I can promise you that you’ll walk away from LUCRUM with an amazing ability and some astonishing new skills to market yourself when you’re done.

You’ll be communicating with a broad range of individuals from co-workers to CIOs, so you’ll need to write well and have a solid phone and speaking presence. You’ll manage small projects from start to finish, so you’ll need to have command of your personal time management habits along with a demonstratably strong work ethic. Don’t get me wrong. This is no cushy job. We’re going to squeeze 8 hours of work out of you during your 4 hours here. You’ll also leave with bleeding-edge personal marketing skills and business relationships that could help you land your dream job out of college.

LUCRUM is not constrained to Business or Marketing majors. If you think you have what it takes – and you’ll want to really think about that first – please take the time to introduce yourself to us. We are looking for 2 great people that we can employ, and in return offer some cutting edge skills to help further your career. If you want to give this a shot, complete the contact form behind the Contact LUCRUM link at the top of this page and let us know how to get in touch with you.

As stated earlier, the position offers tremendous schedule flexibility. Each of the 2 candidates will be expected to work 2 to 3 days per week for approximately 4 hours per day. Ideally we will find one candidate to work on Monday & Wednesday, and another for Tuesday & Thursday – with Friday being used as needed.

LUCRUM will pay $10/hour and reimburse downtown parking costs.

You can find additional information about LUCRUM at our website, www.lucruminc.com, and more information about the people of LUCRUM right here on these pages.

Written by AndyErickson · Filed Under LUCRUM News | 1 Comment