To be even thinking of ROI when speaking with someone will almost certainly kill off any chances of something coming from it. Your attention needs to be focused on them rather than what benefit you may or may not get from the discussion.
To assume that you cannot measure the ROI of social interactions, however, is not totally true. Some things are hard to measure but that does not mean they cannot be measured.
Measuring one tiny feather may be difficult. Measuring a large collection of feathers, however, is much easier. It’s like the old joke ‘How much does a ton of feathers weigh?!’ A single conversation, when selling services, will rarely lead to a sale. Several conversations over time – maybe days, weeks, or even years – could be totally different. Which conversation made the difference? The first? the last? who can tell? Grouping the interactions together over time makes measurement much easier.
Social interactions on platforms like Twitter are harder but still possible. The key is to track results over time. Change your approach and start tracking. You probably will want to give it a reasonable period of time, such as a couple of months, but you should be able to compare cost of time invested with results back. You may measure in terms of cash, hits to website, or some other way. What matters is that over time you can see results that originated from your Twitter activity. You can then compare them with the previous results over a similar period.
A top door-to-door sales person I once modelled would change her pitch slightly every day and compare the results to her previous average. If it were better she would keep the new pitch. If less she would go back to the previous one. One use of the new pitch would not mean anything. After knocking on 100 doors she started to get the picture.
I am currently doing work with a big marketing team, helping them to measure the ROI of various forms of marketing activity. The process is actually very simple. You set up a campaign, do the activity, and then measure the leads generated and resulting sales compared to the costs. As long as you have the mechanisms to capture the information the maths is easy! If you were doing an email marketing campaign you could even measure the average ROI of each email sent.
The point is that if working out the ROI is important to you, it can be done but you have to do it in hindsight and you have to start tracking results and comparing them with the activity and costs invested.
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on Oct 17th, 2009 at 2:47 pm
Hi Richard,
Thanks for the blog.
People have conversations face-to-face, over the telephone, using email and online too. These are not always sales pitches. These are not always part of campaigns. They are just conversations about all sorts of things and at all sorts of times.
How can a company operating at the moment say “Hey. Lets measure our ROI for our communications over the telephone?”. They can’t. Not unless they are measuring a specific campaign which would not actually include all other telephone conversations that had taken place during that period of time.
A company may try and measure the RIO on an email campaign but results would not take into account all the other emails conversations taking place by staff within the company.
Try measuring face-to-face conversations. How can you keep track of what all your staff are saying and who they are speaking to all of the time.
Social Media is another form of communication. It is massive. Trying to work out ROI with baseline figures is not possible and is not accurate.
Face-to-face, telephone, email and online are all general forms of communication. Measuring specific actions within them may, at a push, be possible but measuring the overall ROI of a communication channel is not.
I don’t believe a single company in the world can accurately measure ROI for a communication channel. What we do know is that online communications is more than just a fad – companies are recognising that this is a massive communication tool and a massive opportunity to engage.
Does anyone reading this know of a company that has measured their ROI on every single telephone conversation anyone within their company has made or received? Have they then summarised this and then used this information to compare RIO on emails too? Are budgets then split accordingly?
Rob – @robertpickstone
on Oct 17th, 2009 at 3:24 pm
Hi Rob
Thanks for the post. I am not suggesting that we measure each conversation. Sorry I did not make that clear in the blog. I am suggesting that when we change and do something different that over time we can measure the effects of the change. We do have to ask when we generate a lead what prompted them to make the enquiry…but we ought to be doing that anyway.
Twitter is so much harder if we are using it to socialise and hang out.
You would focus on the results and not the activity. I am not convinced its worth the effort but I was responding to the challenge that it could not be done. Many people struggle to demonstrate ROI on sales training but it can be done if you measure activity before and after the training.
If I go to a new networking group offline I have a series of conversations. By asking I can track back things to people I have met – sometimes only once.
As a management accountant for 20 years (in a former life!) I can tell you that there is no such thing as accurate numbers. Even audited accounts can be easily altered by looking at things is 2 different ways. When calculating ROI we may not get an accurate result but we can give us an approximate result from which to base a decision – ‘is it worth it?’
It would be interesting if anyone has gone to the trouble of trying to actually measure it.
on Jan 17th, 2010 at 5:05 pm
Hi Richard
This is an interesting topic and I tend to agree with you particularly about keeping a record of some kind which can over time build up a picture of potential outcomes from any form of communications we undertake.
I am also of the opinion that the initial value of your observation lies in raising awareness for any business owner to consider ROI in the process. Many owners fall into the trap of engaging in their marketing activity without thinking about the longer term outcomes they would like to achieve.
Broadly, I feel there is sufficient evidence to prove a value in the maintenance of relationships and the development of new ones through ongoing dialogue.
Keeping a simple chart of activity, contacts made and maintained and outomes over a period of time is a useful tool for determining this. As you so rightly point out about interpretation of numbers it may never be absolutely provable. I too would be interested to learn if anyone has measured it.