Measuring Social Media ROI is Like Mowing Grass

Written by on January 6, 2010 - 7 Comments
Categories: "Social Soup"

Some days I think if I hear one more person say “ROI” and “Social Media” in the same sentence, I think I’ll scream. But I don’t. I don’t because I get it.

  • I get that people think that social media is just another marketing channel.
  • I get that because people are there, people want to market to them
  • I get that they should, because people need things. They need good service, and good products and people that they can trust to provide those things.
  • I get that for as long as most of us can remember, there have been advertising channels telling us how ‘measurable’ their results are (even if it was BS)
  • I get that most people think traditional marketing was measurable, so social media should be.
    • I get it!

BUT! Here’s the thing…
First, marketing and advertising are not the same thing.
Second, marketing via building relationships is not new.
Third, you never really could accurately measure ‘results’.

“Many people believe that marketing is just about advertising or sales. However, marketing is everything a company does to acquire customers and maintain a relationship with them. Even the small tasks like writing thank-you letters, playing golf with a prospective client, returning calls promptly and meeting with a past client for coffee can be thought of as marketing.”
~via Investopedia

Having said that, although there are certain advertising methods, in certain industries and situations where there is a clear correlation to determine ROI (return on investment). If you have an online store for example, and you only advertise using adwords, that is quite measurable.

However, in many, if not most cases, it’s not so clear. Especially in small business.

For example, in my real estate days I spent a TON of money early on for marketing. I gave away calendars, did print ads, mailouts, etc, etc.

If someone called and wanted me to list their house and said “I got your postcard today…”, it would be easy for me to do some math and determine that mailout cost was X and I made Y. The truth is, that isn’t the way it always works. In fact, it may not have even really been so clear then. It could have been that the person calling had seen my signs, my ads, my name, etc over time and that postcard just triggered them to call. When they got that postcard, it may have been that because my name or face was familiar already, or they had heard about me from a friend or whatever was really the reason that they called.

I spent a small fortune paying Realtor.com to provide links to my listings for many years. I only had one person email me from that site and ultimately buy something. So, I could do some math and decide that I barely broke even. The truth is, I had no way of knowing how many people saw many listings over the years and sent them to their buyers agent and said “I want to see this one”.

You never knew (or know now) whether your business is up because of your new great hire, or that extra customer service which caused a bunch of people to brag about you, or whether it was really that one ad or commercial all by itself.

For long before social media, the stuff that really worked, couldn’t be measured! The networking events, chamber functions, volunteering at PTA, church activities, your great service, etc. all added up to credibility, to trust, to like-ability, to relationships. it all added up together, ultimately to sales and to referrals.

Yes, there are ways to measure this and that, but when it comes to social media, or social NETWORKING, measuring ROI is like mowing the grass.

You know that the sun helps the grass grow, you know that the fertilizer helps, the rain, the nitrogen…

You know it’s working because every week you have to mow it!

You don’t know whether it grew 10% because of the water, or 15% because of the fertilizer. You just know it’s growing!
Instead of worrying SO much about how or why, just keep up the good work!

 

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  • http://www.PaigeTodd.com PaigeTodd

    Great post Heather…was not sure from title how you were going to make the connection, but you did it beautifully…well written and point well taken!

  • http://heathero.com HeatherO

    Thanks Paige! Glad you liked it :)

  • reallifesarah

    I LOVE this post, Heather! Establishing a relationship is so important, just for the relationship. For example: I am not looking for a new house right now at all. But if a realtor in Raleigh established a relationship with me now, then in 10 years, I may be ready to move. Who am I going to call?

    I tell people that social media is a way to foster a “small town” marketing feel (doing business with your friends and neighbors) in a global market.

  • http://heathero.com HeatherO

    Thanks Sarah! Glad you liked it I always point out to Realtors (etal) that people (like you:) may not be ready for 10years, but will know a lot of people who are over the next years too!

    I also use the small town analogy. In terms of marketing and in authenticity. In a small town you can't BS anybody, they know who you really are!:)

  • http://heathero.com HeatherO

    Thanks Paige! Glad you liked it :)

  • reallifesarah

    I LOVE this post, Heather! Establishing a relationship is so important, just for the relationship. For example: I am not looking for a new house right now at all. But if a realtor in Raleigh established a relationship with me now, then in 10 years, I may be ready to move. Who am I going to call?

    I tell people that social media is a way to foster a “small town” marketing feel (doing business with your friends and neighbors) in a global market.

  • http://heathero.com HeatherO

    Thanks Sarah! Glad you liked it I always point out to Realtors (etal) that people (like you:) may not be ready for 10years, but will know a lot of people who are over the next years too!

    I also use the small town analogy. In terms of marketing and in authenticity. In a small town you can't BS anybody, they know who you really are!:)