The Great Debate Over Social Media ROI

There is a battle brewing between the sociajasonfallsl media “purists” and the social media “realists” as to how important measurement of social media ROI is.

This was brought up at the recent Social Media Club Seattle event when social media legend Jason Falls took the stage to argue for social media pragmatism. He made a lot of good points like how at the end of the day business success depends on whether you sell more stuff (or services). He quoted an apartment building owner who says that if a social media tactic is not resulting in new customers then he stops doing it. Falls argues that there is nothing wrong with putting call to actions in your social media, like a big call to action banner on your blog that says “Now Accepting New Clients” or a Twitter link to your product page or landing page.

But is this short-sighted thinking when it comes to a marketing medium that revolves around relationships and being social?

On the other side of the fence are thought-leaders like David Meerman Scott who argues that no one ever asks what the ROI is of a front desk receptionist or for the people who do lawn maintenance in front of your office.

Ian Lurie, from Seattle-based Portent Interactive writes the following in the book Age of Conversation 3: “Did you consider ROI before you decided to be courteous to customers?…Ponder the ROI of answering the phone?…You did it because you just knew it made sense.”

Albert Einstein makes a good point when he said “Not everything that can be counted counts, and not everything that counts can be counted.”

If Zappos based all decisions on ROI, they might not offer free return shipping, or surprise overnight shipping, or superior 24/7 customer service. These are all expensive activities that are extremely difficult to measure in relation to short-term sales. However, Zappos has a long term approach and CEO Tony Hsieh knew that having the very best service and wowing your customers was a competitive advantage, an advantage that led to their company surpassing $1 billion in sales.

I think that it makes good sense that talking to your customers, listening to their feedback, and other benefits of social media will help your business in the long run. However, if you need to support your marketing activities with data, there are definitely ways to do this like measuring sales from a call to action like Jason Falls recommends.

Here is Jason Falls’ great presentation at SMC Seattle:

Photo credit: Paul Gillin

  1. Thanks for sharing. Strangely enough, I have a similar POV on ROI to David Meerman Scott. It’s not about ROI to me, but measuring against your goals. Your goal in social media isn’t always about money, but if that’s what your CEO wants to see, then you’d better be ready to either convince him your goals weren’t dollar-oriented and here’s how great you did, or connect the dots to the dollars.

    But thanks for bringing the discussion to your audience. It’s always good to get people thinking!

  2. Great point Jason! Thanks for your presentation at SMC seattle.

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