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The reality of social media ROI

Many businesses want ROI for social media, but don't understand that they first must invest in social media and in relationship building to get that return
Written Dec 16, 2009, read 5546 times since then.
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One of the first question I'm asked by a potential client is always, "What's the Return on Investment for using social media?" Translation: When will I make money from being on social media sites. That probably sounds a little harsh, but the fact is many businesses only want to get on social media if they think it's a sure bet that they will get clients and make money as a result of being on social media sites. The problem with that mentality is that it treats all the people on different social media sites as numbers, which is absolutely the last impression you want to give people if you want them do business with you.

The reality of Return on Investment is that before you can get a return on it, you have to be willing to invest in it. And that means investing resources, but it also means investing in relationships with the people you want to do business with. Businesses that are only concerned with getting a return on investment for using social media fail to understand that social media isn't where the sales occurs. Social media is where the networking and marketing occur, where the relationship building happens.

The sales process can only occur once you've built enough rapport in your relationship to earn the trust and recognition of the person you would do business with. It takes time to establish value, and with social media it can take even more time because many of your interactions are done in a virtual space. When the sales process does occur it will happen as a result of building your relationship with the person to the point that s/he will be ready to do business with you.

I see so many businesses treat the sales process as some kind of mysterious flirting game with a potential buyer. But sales isn't a mysterious flirting game. It also isn't social media, at least not directly. Instead social media is part of the relationship building process you engage in, in order to stay visible to other people, establish your reputation, and share information. And the value people find all of those activities is what ultimately helps them decide if they will do business with you. The recognition they have that you can solve a problem for them is what will motivate them to do business with you. And that realization won't occur automatically. It will occur because you've spent enough time getting to know them that they understand and recognize the value that you offer.

The best strategy for social media is the strategy the recognizes the limitations of the medium that social media occurs in. All of social media occurs in a virtual space, mostly in text. There's a lot of context that's missing as a result. Consequently the conversation that's engaged in needs to be done as transparently as possible, without a hidden agenda. There's also value in learning the social media behaviors that are successful and help you connect with people. Those behaviors take time to learn, just as it takes time to develop a comprehensive strategy that enables you to maximize how you use social media in your business.

Businesses want return on investment, and want sales as a way of justifying using social media. But they must first realize that in order to get all of that they need to learn what social media can help them do and what it can't do. It can help them provide better customer service, better marketing visibility, and better networking. What social media can't do is automatically line people up to do business with you. That only occurs if you are willing to invest time in building relationships with those people, and social media is integral to building those relationships will become more integral as it becomes more integrated into our lives. Business must also realize that integrating social media takes time. You can't wave a magic wand and have it all put together over night. Developing a strategy and learning the behaviors that are accepted on social media sites takes time, but once the strategy is in place and the business understands the best practices of social media behavior, the return on investment will start to occur. And hopefully in the process, you'll also build some genuine relationships.

Learn more about the author, Taylor Ellwood.

Comment on this article

  • Graphic Designer 
Sedona, Arizona 
Dan Turner
    Posted by Dan Turner, Sedona, Arizona | Dec 16, 2009

    Human beings are social creatures, but not to the extent that social media sites would have us believe.

    There are far too many business people who are being seduced into the social media vortex while letting their intelligent marketing, media and sales plans slip into oblivion. Unfortunately, there will be no ROI for them.

    Dan

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 17, 2009

    Hi Dan,

    I'd disagree. I think humans are very social in their behavior and in their expectations as to how they want to be interacted with. For ROI to occur businesses need to understand that to get to the bottom line relationships need to be cultivated.

    Taylor Ellwood http://www.imagineyourreality.com

  • Graphic Designer 
Sedona, Arizona 
Dan Turner
    Posted by Dan Turner, Sedona, Arizona | Dec 17, 2009

    People are capable of entering into relationships, business and otherwise, at the drop of a hat, we do it all the time. It is a mistake to think it will take days, weeks or months before people will do business with each other.

    Relationships need only be established to transact business. After that, they can be cultivated as required/desired.

    Social media is a poor substitute for a good, well-executed marketing plan. At most, it is an over-hyped, under-performing, still-developing component.

    Dan

  • Mortgage and Divorce Planner 
Portland, Oregon 
James Adair
    Posted by James Adair, Portland, Oregon | Dec 17, 2009

    one of my favorite marketing minds (seth godin) had a post on his blog recently that I think really sums up the social networking as marketing paradigm and why it is difficult for some (big companies in particular) http://sethgodin.typepad.com/seths_blog/2009/12/the-reason-social-media-is-so-difficult-for-most-organizations.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+typepad/sethsmainblog+(Seth's+Blog)

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 17, 2009

    James,

    I'd agree with that.

    Dan, Maybe that's the case for you, but just about everyone I know in business usually doesn't do business at the drop of a hat.

    Taylor

  • Hardware & Software Design, Audio Recording & Mastering 
Bellevue, Washington 
Brian Willoughby
    Posted by Brian Willoughby, Bellevue, Washington | Dec 17, 2009

    Modern society has seen the advantages of the sciences, where observed behavior leads to predictions, and such predictability is incredibly useful. However, not everything is the world can be boiled down to a Natural Science. In particular, Human Action is not like gravity or chemical reactions where the results can be precisely predicted every time the conditions are carefully controlled. I suppose the distinction between the Natural Sciences and Human Action becomes even more difficult to understand in the aftermath of propaganda and other experiments with massive control of humans. But the key is that Human Action is entirely motivated by subjective considerations, individual will, and is basically unpredictable. Only limited control can be exercised over such variables. The best one can hope for is to observe trends and make a rough estimate, but changes in the market can throw any previously-observed trend into the trash.

    The question is not whether it will take time to establish relationships on a social network which result in sales, or if there will be instant connections and instant success. The real question depends upon supply and demand. Does a given business have a product that is desired? Is their target market sector actually present on any given social networking site? If the answer to both is yes, then will the company be able to establish a mutually-beneficial relationship or even just a sale? Some products may be cheap enough that impulse-buying is sufficient to result in success. Other products may represent an investment that is too significant for anyone to jump in without thorough research and an established trust. In other words, the answer is going to be different for every site and every product or company.

    Austrian Economic theory would be a good starting point for research into questions like these.

  • Graphic Designer 
Sedona, Arizona 
Dan Turner
    Posted by Dan Turner, Sedona, Arizona | Dec 17, 2009

    James, Seth's blog is the only one I read every day. No one comes close to the consistency and quality he displays every day.

    Is that level of commitment and performance typical? No. They are exceptional and not easily duplicated.

    Social media is in it's infancy and we don't know if it's going to grow up or morph into something else.

    Dan

  • Graphic Designer 
Sedona, Arizona 
Dan Turner
    Posted by Dan Turner, Sedona, Arizona | Dec 17, 2009

    Taylor, urgency drives action. People with urgent problems buy solutions very quickly.

    Dan

  • Virtual Assistant 
Statesboro, Georgia 
Gazelle Simmons
    Posted by Gazelle Simmons, Statesboro, Georgia | Dec 17, 2009

    Taylor, I think quality relationships established through social media leads to long-term commitments. Quick sales doesn't mean you have a customer for life. One sale doesn't justify treating people like numbers.

    ROI turns people into statistics instead of treating them with respect, learning more about them and how your respective businesses can work together for years, not just once.

    I'd rather have several repeat customers than one or two quick sales. Social media has been going on for years offline and now translating that into online has been hard for people who are used to getting everything now.

    Long term, I'd rather deal with someone who knows me and my business rather than someone who sells me from Hello.

    Thank you Taylor for another fabulous article and I've posted this on my Twitter and LinkedIn pages since I know plenty of people who need to realize that fast isn't always best. Take care and God bless.

  • chief technology officer and social media evangelist 
Zurich Switzerland 
Urs E Gattiker
    Posted by Urs E Gattiker, Zurich Switzerland | Dec 17, 2009

    Taylor great post. What got me thinking was your statement:

    One of the first question I'm asked by a potential client is always, "What's the Return on Investment for using social media?"

    My response would be immediately that people asking such questions may not use the right language. As I have said before, ROI comes out of the accounting/finance industry and has one meaning only:

    http://commetrics.com/articles/metrics-2/

    Social Media Marketing tools I looked at all end up tracking clicks. Unfortunately, you cannot track return on investment or ROI from social media. Not directly, anyway.

    Don't set that expectation, and smash it anywhere it shows up.

    As you point out so succinctly in your response to Dan above:

    "... to get to the bottom line relationships need to be cultivated."

    Hence, social media including relationships or having office furniture and air conditioning are mediating factors that affect your bottom line.

    Therefore, we need to focus on KPIs (or Key Performance Indicators) that provide us with the actionable metrics needed:

    http://commetrics.com/articles/implement-5-tips/

    You also say: "Considering Businesses want return on investment, and want sales as a way of justifying using social media."

    Here my response can only be that I am so thankful that my clients are beyond that. They are realising that while air conditioning and social media are needed, we cannot directly link them to sales if we are an engineering firm or a non-profit organization. Nevertheless, it helps our efforts to engage better and improve customer service as well as retention.

    Thanks so much for sharing your insights, I look forward to your next pointer on this.

    Urs => ComMetrics.com - we build tools for benchmarking social media

  • Regional Manager 
Roanoke, Virginia 
Patrick Plummer
    Posted by Patrick Plummer, Roanoke, Virginia | Dec 17, 2009

    Taylor, most of the small merchants we work with don't have the time to do social networking. But through permission based email marketing and click throughs to their loyal customer bases facebook and twitter they can leverage their existing customers into a broader audience. It is like a friend telling a friend “Hey this is a great deal. Check it out.”

  • Strategic Marketing Consultant 
Littleton, Colorado 
Beth Boen
    Posted by Beth Boen, Littleton, Colorado | Dec 17, 2009

    The hype of social media is not telling the whole story and it is often being billed as the magic wand of marketing.

    The problem with trying to build relationships on social media, is people who are following you, connected to you or fans of yours, may not even be your target market or referral partners!

    You want to build relationships with those people and the best way to do that is with personal contact. You can never replace the effectiveness of personal contact to build relationships. So get out from behind the desk and get back to your sales and marketing plans, or sales will drop if you put all your eggs into the one basket of social media.

    There are other reasons why social media may not work: http://creativexchangemarketing.com/blog/when-social-media-doesn-t-work/

  • Digital Marketing 
London, Greater London United Kingdom 
Aaron Savage
    Posted by Aaron Savage, London, Greater London United Kingdom | Dec 17, 2009

    The issue I have with a lot of social media campaigns is that there is a complete and utter lack of strategy attached to them. What I mean by that is that before you even start you should decide what the business needs. Is it more customers, is it higher spend per customer, is it more frequent purchase, is it retaining existing customers and reducing the number of defections, or is it to harness your existing customer base to attain referrals. Once you select your strategy and attach a number to it you have defined what success will look like and how to measure it.

    At that point its time to look at social media tactics like Twitter or Facebook or linked in etc and see how you can apply them to reach your goals.

    Far too much social media ploughs straight in with Twitter in some kind of directionless hippy love in that achieves nothing and leaves the business owner wondering what all the fuss was about.

    All marketing is designed to create demand and if it doesn't create demand it isn't marketing.

    Social media is all about being brave enough to have a one to one relationship with your customers. The analogy of the ma and pa store where the owners welcome you by name every time you go in is extremely appropriate, but Ma and Pa are not running a coffee morning to get everybody in to gossip they are running a business and they know that maintaining the relationship is essential to their strategy of creating demand and selling things.

    Far too often so called Social Media Gurus know how a tool works but have no idea how to turn it into sales. If you are interested in seeing how we apply this our agency blog regularly updates to talk about digital marketing strategy and why it is important to offer a joined up solution to your marketplace. Only when you do that will you see the return on investment that you are looking for.

  • Speaker, Black Belt Mindset Master, media personality and author of Think Like a Black Belt 
Brunswick, Maine 
Jim Bouchard
    Posted by Jim Bouchard, Brunswick, Maine | Dec 17, 2009

    The problem with social media is that too many people who use it don't know how to be social!

    1) Too many go straight for the kill! I can't tell you how many times I've received a friend or contact request that started with the same old "Like to learn more about you (your business...)" and then WHAM!..."How would you like to earn a million dollars doing nothing?"

    The same people who use these tactics are the same folks at the local networking group who shake your hand and immediately start blabbering about how great they feel since they started drinking the latest weird fruit drink.

    Knock it off! Take your time to develop your audience, offer meaningful advice or information and let the relationship develop organically.

    2) Too many people take the "friend" thing too literally!

    I have actually developed authentic friendships and serious business partnerships through social media, still, I know that most of my online "friends" are people I don't know and never will.

    You have different expectations from friends than you do from someone on your mailing list. When you're marketing online your "friends" are your mailing list until you take it to the next level.

    Particularly when you're running groups; be a good host, be likeable and let the trust develop.

    3) It's only a tool...you should have more than one tool in your toolbox!

    To develop authentic trust and build a buying relationship you need to get people to a place where they can get to know you better. Use social media to introduce yourself; then invite them to your blog, your videos, your webinars and teleseminars. Introduce them to your published articles, books and media appearances and (hold on Flintstone fans!) LIVE events and face to face meetings!

    Not doing most of those? You've got work to do!

    Taylor, thanks for instigating such a stimulating conversation!

    Best thoughts! Jim

  • Internet Marketing, Social Media 
Highland Park, Illinois 
Noah Weiner
    Posted by Noah Weiner, Highland Park, Illinois | Dec 17, 2009

    Thanks for the provocative piece, Taylor.

    We are all toiling through this infancy stage of Social Media, and those of us who are called on to help businesses tackle the challenge face the ultimate question of Social Media ROI all the time.

    Right now, the easiest way to justify any company digging into Social Media is to draw the obvious connection to traditional SEO. With all the major engines now working with "universal search" there is no blurriness or hype around a company making use of every possible way to reach an audience through organic search channels.

    Blogs rank. Video ranks. Twitter ranks. Photos rank. And all of it can help you demonstrate to searchers (and the engines) that you are an authority in your space.

    That said, I completely agree that many companies fail to understand human nature of social media. Yet understandably, they will never stop wanting to connect it to the bottom line. For businesses in social media, it will always be business.

    Noah Weiner http://www.webnewpoint0.com

  • educator 
 London United Kingdom 
Shibley Rahman
    Posted by Shibley Rahman, London United Kingdom | Dec 17, 2009

    Yes.

    What I think is important is the quality of individual relationships not just as quantity, otherwise it's a case of "easy come, easy go", I'm afraid.

  • Discover - Create- Share 
Olympia, Washington 
Joan Hitchens
    Posted by Joan Hitchens, Olympia, Washington | Dec 17, 2009

    Social Media creates dialogue!

    People do business with people they know. If the use of social media only informs the potential customer that the sale is the writer's goal, it shows. If genuine information and thought (perhaps even personality!?) are behind the messages, then relationships build.

    Nice work on the article. And what a great dialogue. Thanks.

  • management consultant 
Atlanta, Georgia 
Carla Keaton
    Posted by Carla Keaton, Atlanta, Georgia | Dec 17, 2009

    Taylor,

    I completely agree, and many clients want to be involved with social media in some way, but are not willing to make the time investment needed, or do not understand the true cost involved. I think what is really needed is road map for businesses on how to use social media wisely and not get inundated with the all the extras. I find pieces here and there, but I have not found one single resource I can rely on for myself or my clients.

  • Dog Trainer 
bensalem, Pennsylvania 
Michael Badial
    Posted by Michael Badial, bensalem, Pennsylvania | Dec 17, 2009

    I like Taylors take on social media and she is right time is required to build trust on this invisible medium.

    I also believe social media is not for everyone. Another big component of social media that is not widely touched is age.

    For those of us who grew up with computers and never without them. We speak a language that people in their mid 30's and up barely even understand. The very way we communicate is different more advantageous to using social media. Was it not college kids who developed facebook?

    How is a 55 yr old businessman who has lost touch with anything remotely cool going to be able to keep up? Sure there are sites that are a little more "professional" But you still need to be cool, fun and up beat for people to want to hear what you have to say.

    And from my point of view. If the sale of your product/service does happen on line. Like Taylor said 100% transparency is required. Other wise too much is left to interpretation.

    Social media sites will always be geared toward youth. Where the rules of the land are much different than those of adult structured all business and no fun land. Being cool is where it is at on social media sites. Or be prepared to be EXTREMELY helpful.

  • Web Developer and Analyst 
San Jose, California 
Robert Campbell
    Posted by Robert Campbell, San Jose, California | Dec 17, 2009

    Excellent post! I'm not a SM expert, but I try to explain to my clients in a similar fashion. I often use the example of hosting a live event. They know the event will not bring in dollar one today, but they continue to do it to build credibility, visibility, and to hopefully get that new account down the road.

  • Adult Boutique Owner/Fantasy Developer 
San Jose, California 
Piat Orendain
    Posted by Piat Orendain, San Jose, California | Dec 17, 2009

    I really like this article because reiterates the idea that social media is about Connection, and true, genuine connection takes the investment of time and reality to that link. It may be a different medium, but it's simply the cultivation between client & vendor and/or vendor to consumer. Either way, am reminded by something I heard that haunts me: people want to support and engage with real people that HAVE a business NOT a business that has a representative to sling about it's slogan or wheel and deal with random Sales. Because ultimately in the end it's YOU they are supporting and not your biz.

    ROI is tricky on this because it whether or not you have influence on your network, page, site, etc. The social barometer of having a ton of friends or contacts isn't enough. It's whether or not you can take that group and tell do something and they do it, or if they take up a cause or feel like something is important because you've put it out there!!!! That's the real scale, and even that I am having a little trouble quantifying!

  • Business Association Events 
Portland, Oregon 
Bridget Bayer
    Posted by Bridget Bayer, Portland, Oregon | Dec 17, 2009

    Great discussion. What hasn't been mentioned is the type of customer your business is marketing to. If they're not on Twitter, that's not the social media to use. Whatever form of social media they are using, you better be using it too or your marketing plan is not up to date. Knowing who your target market is the first step to creating a great marketing plan. Learning and using new opportunities to reach your customers, priceless!

  • Digital Marketing 
London, Greater London United Kingdom 
Aaron Savage
    Posted by Aaron Savage, London, Greater London United Kingdom | Dec 17, 2009

    @Michael Badial

    I’m not sure I can agree with your sweeping comment about anyone over 35 being out of touch. The internet was built and formed by people like myself in their mid forties and an awful lot of Facebook is made up of code from blogging communities that are considerably older. Back in 98 I was building what we called community sites for clients but today would be termed as social media sites.

    I can also report that my 70 year old mother is very keen on both Facebook and Twitter and so I wouldn't be so quick to dismiss anyone. People older tend to have more disposable income and a more discerning mind. They might very well have an impressive LP collection as well and everybody knows that is what truly makes you cool :-)

    Aaron

  • Adult Boutique Owner/Fantasy Developer 
San Jose, California 
Piat Orendain
    Posted by Piat Orendain, San Jose, California | Dec 17, 2009

    @Bridget Bayer: Too True! I found this out after trying to be on ALL major platforms and found myself baffled by MySpace contribution to my campaign and promptly dropped it. The judges are still on Twitter though....I know its powerful, but I don't have the right audience to compel....so not sure if it's worth it!

  • Speaker, Black Belt Mindset Master, media personality and author of Think Like a Black Belt 
Brunswick, Maine 
Jim Bouchard
    Posted by Jim Bouchard, Brunswick, Maine | Dec 17, 2009

    @Michael Bidail

    Hey Michael...some of us weren't cool UNTIL we were past 45!!! :)

    I do seminars and coaching for elderly business folks in their 40s, 50s and even older who are finding social media to be powerful tools...and a lot of fun!

    And remember: every wave of new technology is built on the backs and bank accounts of old folks who have the resources to produce it!

    Best thoughts! Jim

  • Account Executive 
Portland, Oregon 
Natalie Cromartie
    Posted by Natalie Cromartie, Portland, Oregon | Dec 17, 2009

    Taylor

    I'm sorry I missed it. I hope you have another one soon. Please keep me in the loop. I know this is an essential part of our business. I'm sure it was very useful.

    Thanks

  • Consultant, Speaker and Virtual Engagement Expert 
Denver, Colorado 
Trina Hoefling
    Posted by Trina Hoefling, Denver, Colorado | Dec 17, 2009

    One of the best articles and follow-on conversations I've found recently, Thanks, Taylor and all posters for such a rich discussion! I agree with almost everything said. I work extensively with creating and building structured trust in business relationships, especially virtually. Expanding emotional bandwidth in our online relationships is as - if not more - important than digital broadband. I have struck long standing business and personal relationships with people I've never met F2F, AND I've deleted worlds of connection attempts that are like the drive-by networking tactics that fail-fail-fail in the long run. Thanks for feeding my day!

  • zzzzz 
Washington, D.C. 
zzzzz zzzzz
    Posted by zzzzz zzzzz, Washington, D.C. | Dec 17, 2009

    I would have to agree with Joan.

    If you are in the business for creating one-on-one relationships.....simple marketing basics will always be the best way to attract and retain clients.

    Key is not to spread yourself so thin with the various marketing methods, that none of them are effective. Plans should be implemented so that you are covering your short- and long-term goals. Of the marketing programs selected, establish the amount of effort you need to apply to each towards achieving desired results. In tracking the results from any given marketing plan, you can 'tweak' the individual processes for improving on the results.

    Networking, newspapers ads, social media forms of marketing are effective, yet to put into statistical tracking is nearly impossible. I believe the key to using these methods, is to generate an awareness of your business presence and staying on top of it.

  • Creative Director 
Olympia, Washington 
David Muller
    Posted by David Muller, Olympia, Washington | Dec 17, 2009

    Taylor,

    Great article. I find it amazing that many "marketing Experts" don't understand social media. It is a paradigm shift that is taking place.

    I use current technology to bring "marketing" back to basics. Word of mouth. I heard somewhere that your social media content should be 70% personal and 30% business or message. This makes a lot of sense to me. People will do business with you if they like you and trust you. I use it to expand my social circle. I could not manage the number of relationships that I do know without the current technology.

    I don't really consider it marketing as much as socializing. But everyone knows what I do.

    Anyway, I've rambled enough. Thanks again for this great article.

    -David

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 17, 2009

    Wow, lots of comments. Thank you everyone.

    @Brian I think those are good questions to ask, but I also think those questions are based in a classic approach to economics and the fact is that social media provides me so many choices that it seems to me that it comes down to the relationships you build as much as it comes down to needs being met.

    @Dan I think we'll just have to agree to disagree.

    @Gazelle, Thanks for posting it on linkedin and twitter. I agree that focusing on a quick sale isn't as helpful as gaining some long-term loyal clients.

    @urs I think the KPIS are an excellent way of tracking social media thanks for sharing.

    Taylor Ellwood http://www.imagineyourreality.com http://www.twitter.com/teriel

  • Web Designer and Social Media Consultant 
Vancouver, Washington 
Dotty Scott
    Posted by Dotty Scott, Vancouver, Washington | Dec 17, 2009

    Hi Taylor, I have never quite figured out how to measure ROI for social media. I have had a few transactions occur directly from participating in Social Media - but I have also found some power partners that provide me outsourcing opportunities for jobs that I would have previously turned down. Being able to accept work and outsource the part that is outside my realm of expertise has to have some value - but it is hard to measure. I have also found referral partners from Social Media - they too have some value. Since my only investment was time I feel my ROI is quite high - I just cant put a dollar value on it. Dotty

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 17, 2009

    @patrick, I can see how that could work, thus facebook ads for example. I'll be honest, I wouldn't be inclined to really check those businesses out.

    @beth That's a good point and I would agree. Social media should complement your existing marketing, not replace it. That said it is possible to take a targeted approach to connecting with prospects on social media.

    @aaron having strategies for social media does help. For example I have different strategies I use for different social media sites and I do see an ROI on those strategies, but all it boils down to being willing to invest in the relationships I build using those strategies.

    Taylor Ellwood http://www.imagineyourreality.com http://www.twitter.com/teriel

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 17, 2009

    @jim Excellent points. I agree with you on them and I like your approach to using social media.

    @noah It's true that businesses will ultimately think of the bottom line and to some degree they have to...I just think sometimes they emphasize it to their own detriment.

    @ Joan and Shibley Thanks for commenting. I agree with both of you.

    @Carla What businesses need to do before they get started is figure out a basic strategy and also policy for how they will use social media. Check out this article I wrote. It may be helpful. http://biznik.com/members/taylor-ellwood/articles/the-five-elements-of-basic-social-media-strategy

    Taylor Ellwood http://www.imagineyourreality.com http://www.twitter.com/teriel

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 17, 2009

    @michael Actually a lot of baby boomers are getting involved in social media. I wouldn't discount their activity or say they couldn't keep up. What I would say is they bring their own culture and understanding to social media. Typically its the boomers who ask about ROI and also tend to treat social media as an advertising platform, which really hurts some of their efforts.

    @robert that's a good way to explain it.

    @piat that's pretty much it. It's very hard to quantify social media The problem really is that the emphasis of ROI is based on numbers and on trying to objectively prove something...how do you objectively prove the efficacy of a relationship? You can't.

    @bridget that's a good point to make. Thanks for sharing.

    @Trina Thank you for the high praise. Glad you like the article.

    @kathy you are absolutely correct. You've got to stay on top of it...which today means, for me writing a lot of responses...but its also so fun!

    @David I like word of mouth myself and it's how I get most of my business. Relationships matter when it comes to business decisions.

    @Dotty I think its better not to put a dollar value to it. The ROI you describe is the kind I tend to notice in social media as being successful.

    Taylor Ellwood http://www.twitter.com/teriel

  • Financial Services Professional 
Bellevue, Washington 
MC Hunter
    Posted by MC Hunter, Bellevue, Washington | Dec 18, 2009

    I do believe I've learned quite a lot from the discussion post article. The genuine interactions of well-thought-out opinions, hypothesis, treatises is incredible.

    @Taylor, any author who can encourage this kind of discussion should be commended and so I do.

    If I may add my $.02, I enjoy Bizniks and Biznik events so thoroughly because it IS truly business networking that doesn't suck! The articles, events, seminars, and training offered here is outstanding for the most part.

    The true ROI for me is the f2f connections I enjoin after meeting/commenting in a "safe" environment first. The BEST part of all this discourse, while connecting us from all parts of the globe, is that it pushes us to meet f2f. It gives us some sense of knowing another ahead of time--a platform of at least some solidity on which we can stand to reach out and do the sometimes scary thing of connecting to another.

    Mitch

  • Herbalist Astrologer Tarot Reiki Master Flower Essences 
San Diego, California 
Lisa Allen, MH
    Posted by Lisa Allen, MH, San Diego, California | Dec 18, 2009

    Congrats Taylor for having Biznik's Featured Article of the Week! I find social media sites to be really different from each other, and even though I maintain presence at most, I do need to be careful with my time. Automation tools like Ping.fm help (even if I can't get it to work on my Ning sites yet). I find for myself that social media brings me about 5% of my new clients, or less. Most new clients are direct referrals or from personally meeting folks through (as an example) a class or presentation. But I wouldn't entirely discount having it. I believe you are right, in that it is still developing. We don't really know the true impact, and I decided I didn't want to be out of the loop! Thanks again Taylor - you are awesome!

  • Dental Office Business Mgr 
Bellevue, Washington 
Gil Pauley
    Posted by Gil Pauley, Bellevue, Washington | Dec 18, 2009

    Taylor,

    Very interesting article and what an amazing discussion and reader response to it. It seems that most people only want to measure ROI from social media in a very tangible monetary way. If you have a good tracking system and can know exactly where your customers and business are derived then ROI for this should work. Most people just won't have that in place is my thought based on the things I see in the social media.

    My own ROI from social media is different and it is two fold. First, I am looking for things that help me with my business to attract new dentistry patients. On twitter, I look for URLs that might have something of use to me in business. I do have some I follow just for fun, like the sports lady because I am a big sport fan. A lot of the comments I see are not worth reading, but then someone must like them. I also like seeing what is highly viewed on some of the major social media, such as Digg, Delicious, Stumbleupon and Mixx--which are my favorite sights. Just plain old interest and you can't measure the ROI on that! Second, when I send things into the social media sites I am looking for a back link to one of my websites. This is very easily measured when you do a back link check. These are one-way back links which will help raise your Google rank and that rank in other search engines. I try to avoid any social sites that use the "no-follow" on links because they have no value to your ranking. This is not the only method that I use to secure back links, but it is one that I have been using very successfully this past year. If this helps keep your website high in the organic search then there is some ROI, but actual finite or tangible measurement of it is not easy other than to say I got "x" number of back links from this submission.

    When submitting things, I try to send in things that I think are interesting and have some value. I also send in things of interest to me that are unrelated to dentistry. I hope other people will find them interesting and in turn may read some of the various dentistry related articles that I post, such as a recent blog article I posted on the relationship between gum disease and heart disease.

    Gil http://www.brooksidedental.com http://bellevuedentist-cosmetic.blogspot.com

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 18, 2009

    @MC Hunter Thank you very much. I'll admit I'm pleasantly surprised at the amount of commentary this article has already gotten. I agree with about the F2F aspects of Biznik. It brings it closer so people can meet and get to know each other.

    @ Lisa Thanks so much. I'm looking forward to seeing what will happen with social media in the years to come.

    @Gil The problem with the monetary approach is that it can be very hard to track that in social media. What interaction produces that result of somebody wanting to do business with you?

    I think you have a good approach to what you are doing. It sounds like its working for you and I would note that it's a very targeted approach with a definite strategy.

    Thanks for sharing

    Taylor Ellwood http://www.imagineyourreality.com http://www.twitter.com/teriel

  • Marketing 
New Albany, Indiana 
Jason Gaya
    Posted by Jason Gaya, New Albany, Indiana | Dec 18, 2009

    Dear Taylor,

    I agree with your view point of building personal relationship before thinking of jumping into some sort of business venture on the social web. Human beings create, manage and run business. Mutual understanding and trust strengthen human bonding and this bonding creates business alliances. Once a strong bond is formed it will surely drive business on the social web.

    Jason Gaya

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 18, 2009

    Hello Jason,

    Thank you very much. I agree. It's the strength of our connections that bring us business, as much as it is the need people have.

    Taylor

  • Dog Trainer 
bensalem, Pennsylvania 
Michael Badial
    Posted by Michael Badial, bensalem, Pennsylvania | Dec 18, 2009

    @ Aaron, your right its not an age thing at all. From your post I get it. Its more a personality type. My fiance was a software engineer for 15 yrs. And 95% of the people I met who were engineers, would not even be able to write socially like you do. Knowing how to communicate and connect with other beings is important. And it does not surprise me that your grandma can use social media sites efficiently. I am sure you had something to do with that. You seem to be a stand up guy. And as far as music and cool goes. I dont know these days. The LPs you have are probably cool. But not a lot of whats coming out today is.

    @Jim Bouchard, First I want to thank you for the work your doing. I can see you are doing big work for humanity. Thank you. And your right. Cool goes hand in hand with knowledge. I have always hung out with people older than me. I cant even begin to list all the benefits that come with that. I am 26 and my friends range in age from 26-65. (that I actually hang out with.) And this is what social media does it combines youth with elderly. Social Media sounds like People+time invested in relationships = a more fulfilled life and business. So trying to track ROI would look like a spider web. EXAMPLE: I made friends with Bob. Bob did not use my services. 3 people from bobs network did. And 1 sent me a client. Even though Bob did not pay you. He was the gateway to an abundance of income. This really makes investing in everyone important. Not just the "Good looking prospects". So rather than having the situation of the Big Ceo who sits way up there and nobody knows him. (Why buy from him anyway?) You have Jim and his kids, you know the guy who wrote "Think like a black belt". "His book helped me with xyz." So not only is it personal, its now proof of results. A much more personal and friendly approach. In sales, bringing pictures of your family is widely practiced. This establishes you as a human being who can be trusted in the minds of prospective clients. Social media sites are the pictures. With more power!

    @ Taylor, I believe happiness extends life and attracts abundance. So I can see how this would really benefit baby boomers. Staying connected and up to date with the important people in ones life, would benefit every aspect of their own lives. Advertising does stink.

  • Digital Marketing 
London, Greater London United Kingdom 
Aaron Savage
    Posted by Aaron Savage, London, Greater London United Kingdom | Dec 18, 2009

    @MIchael Badial I agree with you completely that it is a personality type, but also think that these things can be learned as social skills in the same way a family unit learns skills off of each other. We try and accommodate both requirements with our agency and so we run social media campaigns but also offer to train clients how to run them as well. I am glad you found the post useful and thanks for replying. Oh and yes you are absolutely right that a lot of today's music is absolute rubbish but if you fancy looking at something eclectic and diverse have a look at FAADA. They are a client and we are about to launch a campaign for them but I think they are a great label with some very cool artists. See what you think and apologies to everyone for promoting an organisation that I am involved with.

  • web design and easy update tools 
Seattle, Washington 
Susan Jackson
    Posted by Susan Jackson, Seattle, Washington | Dec 18, 2009

    Thank you, Taylor, for your great article and the stimulating dialogue it inspired!

    I agree with your point. Often, people get so caught up in the social media buzz, that they forget what its really about. Personal connection and relationship building, even in this modern day, is essential in business. So many small business owners work in isolation that maybe we forget how to actually interact with real people.

    Social media can really help break this sense of working in isolation, but it shouldn't replace your other efforts at communication and networking.

    Its important to remember that social media is just a tool in your marketing armament, and its ROI is indirect. Doing business is still, and I believe, will always be about creating or selling something of value to people who trust who they're buying from.

    www.bizango.com

  • Holistic Business Coach 
Portland, Oregon 
Taylor Ellwood
    Posted by Taylor Ellwood, Portland, Oregon | Dec 18, 2009

    Hi Susan,

    Good points. I agree. Social media is just one piece of the puzzle, albeit a very new piece.

    Taylor Ellwood http://www.imagineyourreality.com

  • Dental Office Business Mgr 
Bellevue, Washington 
Gil Pauley
    Posted by Gil Pauley, Bellevue, Washington | Dec 18, 2009

    Susan,

    I agree with you. I think that we think very much alike as to the ROI value of social media. It is a tool and the ROI is indirect for the most part.

    Taylor thanks again for such a stimulating article!

    Gil http://www.brooksidedental.com http://bellevuedentist-cosmetic.blogspot.com

  • artist 
York, Pennsylvania 
Judith Orcutt
    Posted by Judith Orcutt, York, Pennsylvania | Dec 19, 2009

    Taylor, Another excellent article. I am so proud of your ability to express yourself. Now-from your Mom's point of view: I see SM as an adjunct to my regular marketing plan. It is an excellent tool. As you know, my art is very graphic and therefore the visual represtation of it is my selling point. So I am hoping that by sharing that visual representation along with some astute friendly words with others that referrals will also happen. I am looking forward to learning more at Christmas. Love, Mom
    http://www.quilligraphy.com

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