Everyone knows that before Social Media can be integrated into the DNA of the business world we have to deal with the ROI question. It seems as though the search for the holy grail of Social Media ROI has been going on forever (including a post on this blog almost two years ago) and yet we are no closer to reaching consensus. The conversation is being generated by some of the smartest people in the business and it ranges from simple formulas to complex templates, from “hard to measure” to “must be related to a dollars“. Unfortunately I have no brilliant insights to add other than to suggest that if we haven’t figured it out by now then the magic bullet probably doesn’t exist. The CEO at my previous gig used to say that the only reason he would spend a dollar on I.T was if it either increased revenue, decreased costs or improved communication. I know social media is not I.T but my point is that every client has their own idea of value and we should align our ROI discussion with whatever that may be.
I’ve always had a strange sense of deja vu about this conversation and when this post popped into my reader it all came flooding back. I HAVE seen and lived through this before. Fifteen years ago I got into Business Intelligence when slick sales people were running around selling even slicker dashboards with lots of blinky lights. Then, as now, there were a small percentage of evangelists who were passionate about it and the ROI discussion was rampant even though we didn’t have the social networks to amplify the discussion. Unlike social media, a BI project would typically cost hundreds of thousands of dollars and management’s response was usually…”for a report?”.
As the BI world continued the search for the ROI magic bullet the technology was slowly evolving. The early adopters were able to learn from their mistakes. Reporting, no matter how slick, was just a look back at what we did last week/month/year and by the time it was produced the client usually already knew what the results were. We learned that the real value was in producing information that was current, accurate, relevant, timely and most important , actionable. As the information started driving business critical decisions the timelines started shrinking and vendors started looking at real-time BI. My last project integrated real-time queries into an automated process and drove decisions based on pre-defined thresholds. The value of BI had been proven beyond doubt, the ROI discussion has been put to rest forever at this company.
At the end of the day we never did find the magic formula for ROI but instead were able to deflect the debate by focusing on adding the value the business was looking for. At my previous job it took eight years, for me personally it took thirteen. I don’t believe social media is dead, I believe it’s still evolving and if we look back and learn from the BI experience we shouldn’t have to wait thirteen years for maturity. So what are the lessons we should take from BI? These are the three that I think are most relevant to social media.
- always focus on adding value. ROI is about efficiency and if business sees the value, they’ll find a way to achieve the efficiency.
- listen to your clients, they may not always “get” social media, but they know what their business needs
- measure, analyze, plan, execute, repeat daily/weekly/monthly or as often as you can afford