important notice: this is the unabridged version of a post published at Bnet.co.uk
One is often told that getting the buy-in for a Social Media initiative requires some solid ROI calculation. One would have to weigh the pros and cons, how much it costs, try and evaluate the effort which is required, measure it and translate it into pounds, shillings and pence. And profit should also come into play, since it is deemed inappropriate for a new project to be set up without a clear definition of how much revenue it brings.
It is indeed a well known fact of Corporate culture that no IT project has ever been implemented without delivering great benefits… well, maybe not. And another well known fact is that, similarly, all systems which have led to losses in productivity should be banned… well, maybe not either.
Let’s take email as an example. We have already described at length the pitfalls in which many corporate email users are falling and how to preserve your productivity and lifestyle by better using email. Yet, email is also responsible for stress, and waste of time and money and effort. On average, Managers spend 40% of their time doing email according to the authors of the Hamster Revolution. I’m not mentioning examples of those who spend 100% of their time on this but I know a few who do. Yet, despite all these productivity issues, the requirement for email is not questioned, barring a few exceptions such as IBM’s 2.0 expert Luis Suarez who declared war on e-mail and almost succeeded (lucky him!).
So is ROI a valid way of showing how useful Social Media can be?
My take is the following:
- One doesn’t engage in a Social Media project because it brings profit but because it enables one to do things in different ways and that these ways – listening, adapting, innovation – are beneficial to the brand, to your ecosystem, your image, and above all, the well-being of your clients, partners etc.
- One doesn’t need to spend too much time on understanding how much Social Media will cost because the fact is that it doesn’t cost that much, and it may even cost too little (I have seen many a project valued because of the cash it sank, not the one it never generated),
- It is very difficult to measure precisely what tangible profits can be achieved from using Social Media, although there has been examples with many SMBC members,
- User generated content is also a major source of production of high quality content which can then be used in many instances such as client-facing meetings and lead generation. And God knows content is expensive. Any one video could cost from €1,000 to €15,000 but I have seen some instances in which a very talented consultant generated 8 videos worth at least €6,000 each for… nothing. Thousands of views later, he helped the company save approximately €50,000. In the past 12 months, my assessment of the money that was saved by fostering user generated content (UGC) in the past twelve months is in the regions of €200,000 if I include all the top quality articles which all our users have produced and the 1000+ comments which they have generated, some of which have even helped us improve dramatically some of our services,
- Eventually, my prime advice to those who’d like to spread the word about how Social Media can help a brand engage in passionate discussions would be to suggest to them that they speak to their boss about it and ask him/her to write things for the company blog. I did this and guess what: I never had the ROI question anymore because he understood immediately that he too could spread the word across about his own pet subject (Green IT) and that was – as he himself admitted – invaluable.
Maybe the final reason for not falling into the ROI trap is that ROI is often used by execs to get rid of subjects they don’t like even though there may be no other rational reasons for them to do so.