Social Media ROI?
The biggest challenge with adoption of social media technologies and strategies is that it's taking a shot in the dark. No one knows exactly what impact an initiative will have (anyone who told you they knew in the past year or two was lying). Recently I've spoken with a few researchers who claim to have cracked the code.
In the next six months, expect a number of calculations, explanations, and definitions of social media ROI to pop up. Later this year, I'll be writing about whether the impact of social media can really be calculated, both its effect on the bottom line and on traditional CRM metrics. What are your thoughts? Can social media ROI be calculated, or will it remain as elusive as ever?
Related Entries
- Starting Out in Social Media
- Forrester's Moira Dorsey: The Future of Online Customer Experience
- Guest Blogger Martin Hayward: Supporting Social Media Engagement on Your Website
Whether Social Media ROI is easy or hard to define (or even needed where modest, focused "market tests" are concerned) companies we work with in the customer service space still seem pretty excited about Social CRM and its potential. In fact in a survey I just finished of around 30 customer service leaders in the UK and Europe, while 75% said they were cutting spending overall on CRM or customer service in 2009, 1/4 said they still were planning to increase spending on Social CRM and community tools. Ah, the power of hype!
We'll be making a download of the study Executive Summary available on our website http://www.evergance.com shortly.
Allen
I'm possible it will be possible. Take a look at last weeks post from Esteban Kolsky. The answer is in the comments.
http://ekolsky.wordpress.com/2009/06/15/measuring-up-social-media-events-for-crm/
Let me know your thoughts.
Wim Rampen
Jeremy,
Good article. There is a lot of talk about the ROI of Social Media but nothing has yet been defined clearly. To try to put thoughts on a paper (or adding to the chaos…), I pulled together a Social Media ROI spreadsheet. It is based on work by Charlene Li (Forrester) and Bill Johnston (Forum One) in that it compares online and offline benefits and costs.
The spreadsheet is downloadable at http://dagholmboe.wordpress.com.
I am a firm believer that running a business, you need to define an ROI in basically everything you do. Some people might argue that Social Media is different and that calculating and ROI is impossible. There is some justification to their arguments - after all, how do you quantify engagement or sentiment? Nevertheless, it is simply not correct that you can not define an ROI.
The problem with Social Media ROI is that it is difficult to define however Li and Johnston have done a great job defining it. My spread sheet is simply just an extension of their work.
Best,
Dag.