I’ve spent a lot of time recently obsessing about the ROI of Social Media. Not just because current and prospective clients want to see some kind of a return on the services Renegade provides (although that’s a damn good reason in and of itself) but also because it’s a fabulously complex Kobayashi Maru-like challenge.
Consider for a moment all the roles that social media can perform for a company including customer service, recruitment, research, product development, awareness building, crowd sourcing content, referral/lead generation, and yes, even direct sales in a few cases. Now try to unbundle those roles and show straight line ROI for any of them with the exception of the last one. Good luck to you. (By the way, smarter minds that mine like Lux Narayan of Unmetric have concluded http://onforb.es/14mn0NX it’s just not possible.)
Thinking that social media could be my route to the answer, I sent out this tweet:
Rob Moore, CEO of Internet Media Labs and a fellow IBM #SmarterCommerce VIP Influencer (which has become an invaluable micro-social network!) was kind enough to respond leading to the conversation below. Rob offered a terrific example of “Non-Linear ROI” which brought us both some comfort that all the social networking stuff we do actually does pay out! If you have similar tales to share, let me know.
Drew Neisser: First, can you provide a short description of Internet Media Lab?
Rob Moore: Internet Media Labs is a NYC based new media & technology company. We build technology to help businesses and brands build and manage social relationships more effectively. We also run a cool co-working space and produce a web show, #InTheLab.
Drew Neisser: Talk to me about how you measure social ROI in terms of your own business?
Rob Moore: Social ROI for us takes many forms, and it is important for businesses to recognize that there are many forms of Social ROI that can be quantified and measured. Of course, there is the obvious – we make a social connection that becomes a buyer of one of our products or services. But there is also tangible ROI that comes in different forms: from connectors – people that introduce you to others that ultimately buy – and amplifiers, people that share our message about our products.
It has to be noted, however, that none of this happens without a significant investment in relationship building. We have amazing social relationships and networks that will have significant impact on our bottom line for years to come.
Drew Neisser: ROI in your case seems like a very non-linear non-direct marketing process. Is that a fair assessment?
Rob Moore: Absolutely. Up to this point, I would say that most of our ROI would qualify as originating from non-linear connections, i.e. someone that introduced you to someone else, that invited you to speak at a conference, that resulted in a business opportunity. That is pretty non-linear!
One important thing to recognize as well is that many of those originating relationships happen as the result of seemingly “random” intersections – the serendipity of social.
Drew Neisser: So you met Linda Bernstein (@wordwhacker), who is clearly an influencer and she has been evangelizing on your behalf which lead to various leads which you will close at some point. That sounds like ROI to me. Do you think it’s possible to actually create a model that puts a value on your nurturing of people like Linda?
Rob Moore: First of all, I need to state for the record that it would be impossible for me to put a “value” on my relationship with Linda, she falls into the PRICELESS category! But that said, you can absolutely model and attribute value to your social relationships, especially when you apply what I call “social forensics” to the analysis: mapping and identifying the true origin of that revenue you just booked.
When you are able to do that, every social relationship can be assigned a potential future value.
I want to be clear that I don’t look every person I meet on Twitter with dollar signs in my eyes. Rather, I look every new social relationship as an opportunity for mutual discovery, networking and advocacy. By being authentic and agenda free, trust is formed and friendships are created, the by-product of which is magic!!!
This works both ways for IML, by the way. We have sponsored many an event, used services, or paid commissions to people and businesses that we have met through social media. As a matter of fact, our social media ROI balance sheet is a little in the red right now – we need to do something about that!
Drew Neisser: Is this kind of networking / relationship building with influencers scalable? If so, any thoughts on how?
Rob Moore: It is scalable, but it doesn’t happen without a plan and significant commitment. My friend Angela Maiers (@AngleaMaiers) coined the phrase “Tactical Serendipity”, which I love. Tactical Serendipity means putting your self in position to take advantage of the random intersections that happen every second in social. If you can identify where you best social relationships have come from, put yourself in a position to attract more of them – you can scale great relationships if you know where to find them.
Drew Neisser: Also, you’re a seasoned vet with a proven track record which makes it a lot easier for you to network with other influencers like Linda. Could a junior person at your company have done this? Is this sort of networking something you can teach people?
Rob Moore: Yes I believe this type of networking can be taught to and mastered by almost anyone. Surely my depth of business experience has been an advantage to me as I have engaged in social, but there was a massive learning curve for me as well. I think that learning curve can be compressed, though, to accelerate success and positive outcomes. For junior people, this can be achieved through coaching and mentoring, for senior people new to social it is often just a matter applying existing skills sets and knowledge to well defined social relationship building strategy.
FINAL NOTE: This is just my opening salvo on Social ROI. Expect a lot more on this subject in the near future. There are folks out there (like Syncapse) working of formulas to calculate Social ROI and I can’t wait to dig into those…