ROI, or return on investment, is a pretty important calculation in business. It gives you a metric on whether a project or task is giving back more than what you’re spending on it. Social Media ROI can be a bit tricky to calculate. There are soft numbers like followers, retweets, etc. and there’s a more direct calculation of actual sales or leads (conversions) from social media activities. While all these metrics are important, social media ROI isn’t always so directly measureable. How do you assign value to a conversation?
Much of the value (and eventual ROI) of social media is in having great conversations – with customers, with potential customers, industry colleagues, influencers – people in general. These conversations can lead to long term ROI in the form of eventual purchases and referrals.
Just as most business people would agree that networking in person is important because of the people you meet and the conversations you have, so to is networking online. Connecting with people on social networks online can extend relationships you’ve started in person or start relationships with people you wouldn’t otherwise get a chance to meet in person.
While conversations with customers and potential customers are important, conversations with influencers in your network (or potential influencers) can extend your reach and amplify your message online, leading to future sales opportunities.
As an advocate of measurement of social media and other online activities, I also believe there is value in certain online activities which are very hard to measure or put a number on. That doesn’t mean that these activities aren’t valuable. Sometimes activities lead to very valuable long term ROI. So don’t ignore conversations, networking and socializing just because there’s a not direct ROI measurement to boost your (short term) numbers.
What do you think? How do you value conversations online (and off)?
(photo by Ian Sane)