ROI Is Not Money
I recently talked about the ways social advertising and investing in a new form of marketing – engagement marketing via social media – can enhance your business in an economic downturn. Everything we know about return on investment (ROI) is changing. Engagement marketing is certainly a hot topic, and it can help revamp a strained marketing budget, but what does it mean for the enterprise or entrepreneur?
In order to truly tap the new possibilities that the social web offers for your business, you need to turn the way you think of ROI on its head. In the past, ROI has been a direct effort-to-money correlation. Marketers and companies could predict how many real and direct dollars would result from a certain off line ad campaign based on known factors like seasonal shopping habits, location, target markets and more.
The New Capitol
What sets ROI in a social media environment apart is the change in capitol. Where old ROI used to be direct money returned on invested time or budget, the new ROI is not money. The new capitol for any business is human capitol. Human capitol is abundant on both the enterprise side of the fence and the customer side of the fence. Instead of thinking of every thing you do as making money, think of it as cultivating people.
Engage and Listen
Ideally, you want to think of everything you do for your business in terms of engagement and listening. Marketing is no longer a soapbox with a captive audience. Now that your audience can find (and share) the information they need anywhere, anytime, the customer no longer believes everything they are told by a company. They talk to each other, to perfect strangers, to friends and family. They have access to reviews and product information, both good and bad, 24 hours a day, 7 days a week. Your success depends on the information they choose to filter out and how they filter it.
First, learn to listen to your customer. Customers you have or customers you have yet to earn, they are communicating with each other and with you right now. Use the tools of social media to find out what they are saying about you, your products, your customer service levels, and everything else related to your brand. Don’t defend or excuse while you listen. At first, just take notes, pay attention, absorb the good and the bad.
Once you have a feel for your brand perception, you have a better idea of how to enhance the positive and embrace the negative. That’s right – embrace the negative. Instead of worrying about how to control what people are saying about your brand, use the negative feedback as a way to address problems. Fuel your growth by letting go of control and harnessing the power of people as the new ROI.
Everything The Goes Around, Comes Around
In order to get involvement, engagement, interaction, innovation, conversation, community, feedback, and the other benefits of the new ROI, including indirect revenue, you must give back to the community you are building online. People don’t exist in a vacuum. Give back more than you plan to take. Be accessible. Listen, and when you speak, offer value. Let your customers become personally involved with your brand and reap the benefits of human capital as ROI.
Social media users reject outright being sold to online. To think you can make a FaceBook account or start using Twitter solely for the purpose of trying to direct sell or spam your customers would be a mistake. A better use of your social media time is to find out how to give your customers what they need and want by interacting with them. Toss your ideas out and get real time feedback. Ask for their ideas, and listen.
The new ROI is reshaping what it means to do business. Companies that don’t innovate will be left behind in this new economy. I’ll be talking in more detail about tapping and measuring the new ROI at Jeff Pulver’s Social Media Jungle on November 13th in Melville, NY. Check back next week – I’ll be posting the full details of the discussion as well as my slide deck and links to any footage of the event.