Steven Groves is founder of Social Marketing Conversations and co-author of 'ROI of Social Media', publishing around the world by Wiley & Sons. Subscribe to my blog feed for stuff I decide to blog about.

I shared two posts that caught my eye today in my shared posts from my Google Reader on different topics, but I saw the most appropriate connect between them.

Urs Gattiker wrote a post at Social Media Today on “Measuring Social Media ROI: Why It Fails” and Seth Godin wrote a post on “Embracing Lifetime Value”.  I found them in that order and interestingly, in my comment to Urs I suggested that the challenge he (we) might be having is in trying to calculate an ROI of Social Media on a campaign basis, whereas Seth’s post was about the short-sightedness of companies in estimating the value of an customer and what it is worth or acquire and maintain the relationship with any given customer.

messagesThe crux of my comment to Urs wad that social media is still being thought of in many circles as YAMC (yet another media channel) for a brand.  My point is that it is not YAMC and for brands that continue to attempt to treat it as such, they are very likely to have continuing frustration at the investment and failure surrounding their efforts.  I am not going to pretend to have all the answers here.  For me it is still a topic in motion, but I do think we are beginning to surround the ROI question with better and better tools and, in forward thinking companies, I think they are beginning to get a better level set as to what can actually being attempted when an engagement in social media is undertaken.

To corporations and brands – if all you want to do is sell something and increase this quarters revenue, a social media effort will be fraught with a great deal of frustration.  Why?  because the audience really does not care about you or your brand, especially if the attempt is all about just trying to sell them something.  I am sure that a percentage of the audience will respond, but I think a brand who does that is missing of what a strategic social presence can really do for you.

If on the other hand, you are attempting to gain a customer for life, an advocate and a brand ambassador, social media is just the tool and tactic for you.  If you want to have an interactive relationship, connect a lifetime of interactions and effort to a dollar figure, from what I have seen, I can suggest you are pretty darn close to being able to right now.

It may be somewhat labor intensive effort today, but the automation is coming and in the very near future I predict that when a customer connects to the organization via whatever mechanism (blog post, micro-blog post, phone, social network comment, email, conference attendance, etc.), the company representative will be able to perfectly understand the ROI of the relationship with that customer and management will be able to understand what media tactics and tool can reap the best result.

Social media is dying as a separate category of media; media as we know it is passing into the dust as well and what is emerging is a media channel that is social at it’s core.  It will govern the lifetime value of the relationship with the customer and it will be measureable to a single tweet, blog post and social network interaction.

  • http://afpr.com AndyFinkle

    I will cautiously disagree … I get your point (and agree) that social media will be woven into ALL media going forward – don't disagree. At the same time however SoMe will ALWAYS be it's own separate channel at the same time. I will also argue that SoMe ROI can be very easily measured. As just one example, think of a brand using a SoMe chanel PRO-Actively (not *listening* to their customer as all the SoMe pundits tell them – but actually using SoMe to sell a product (demonstrable ROI). It is not only easy, but HIGHLY recommended IMO to offer the customer something of value, that they can not get anywhere else. The pundits can say whatever they want, but what people REALLY want from a brand using SoMe is a deal! Offer them a coupon, a special, something that has monetary value that they can not get anywhere else when shopping for your brand (or considering your brand's competition). That my friend is what get's you (the brand) a highly demonstrable, and accurate ROI.

    Separately, as it relates to Seth Godin's *cough* comment – This is an entirely SEPARATE and DIFFERENT use of the same SoMe channel. Best example I can think of as it relates to the 'lifetime' value of a customer is Zappos. Zappos's culture is (was?) embedded in SoMe. So much so that you could not differentiate the two. Many customers of Zappos developed a relationship with the brand as a result = customer loyalty.

    Happy Steve? I wrote something :-) @A_F

  • http://www.StevenGroves.com Steven Groves

    Andy, I’m always happy when I get to talk / reply / interact with you.

    The connection of the two; Seth’s post and Urs, provided the spark for me to expand my thinking on the subject. Thanks for your input!

  • http://afpr.com AndyFinkle

    I will cautiously disagree … I get your point (and agree) that social media will be woven into ALL media going forward – don't disagree. At the same time however SoMe will ALWAYS be it's own separate channel at the same time. I will also argue that SoMe ROI can be very easily measured. As just one example, think of a brand using a SoMe chanel PRO-Actively (not *listening* to their customer as all the SoMe pundits tell them – but actually using SoMe to sell a product (demonstrable ROI). It is not only easy, but HIGHLY recommended IMO to offer the customer something of value, that they can not get anywhere else. The pundits can say whatever they want, but what people REALLY want from a brand using SoMe is a deal! Offer them a coupon, a special, something that has monetary value that they can not get anywhere else when shopping for your brand (or considering your brand's competition). That my friend is what get's you (the brand) a highly demonstrable, and accurate ROI.

    Separately, as it relates to Seth Godin's *cough* comment – This is an entirely SEPARATE and DIFFERENT use of the same SoMe channel. Best example I can think of as it relates to the 'lifetime' value of a customer is Zappos. Zappos's culture is (was?) embedded in SoMe. So much so that you could not differentiate the two. Many customers of Zappos developed a relationship with the brand as a result = customer loyalty.

    Happy Steve? I wrote something :-) @A_F