Most students of any business course are taught constantly about the importance of having a good Return on Investment. Whether that "investment" is measure in dollars or in time that you or your employees spend trying to do something, we are taught that the benefit must be tangible when it comes back to your business. The problem that many businesses have when it comes to social media is that the ROI is not as simple to measure as putting a discount code into a print ad and then counting the redemptions.
Last week at the World Business Forum Charlene Li, bestselling author of Groundswell as well as the brilliant new business book Open Leadership and a leading mind in how social technologies can be used for business, talked about this in her short presentation to a global audience of business people. At one point she asked all the members of the audience to shake hands with the person next to them. Then she asked them to describe the ROI of that handshake. It was a nice example of where the measurement problem lies because most of us are not used to quantifying the value of social relationships and conversations.
The irony is that most small business people know this inherently, and the process of trying to emulate big businesses is what drives them to forget. You know that if your customer is the President of the local PTA and you do a good job for him or her, that they will help drive word of mouth about your business to other parents. You KNOW that having a positive review or endorsement of your business in the local paper will add to your credibility and increase consideration. In some cases, you may already be tracking the value of these instances in hard terms. But most of these sorts of activities don't fit neatly into a spreadsheet.
In fact, this situation is what creates the most skepticism about the value of social media for small business owners and whether or not to engage in using it. The solution is surprisingly simple. Stop comparing what you might do in social media and how you might measure it to something as tangible as a radio advertisement or sponsoring an event with a booth.
Instead, start thinking about the value of social media how you think about whether or not to attend a networking event. Or in the realm of customer service or loyalty for how you encourage your current customers to talk about you or come back to you over and over again. The ROI of focusing on these activities is huge, but it may not fit neatly into your spreadsheet.
Does that mean you stop attending events? Of course not. The ROI of a conversation may not appear for years, or it may happen tomorrow, or it may never happen. That is the way that relationships go. But the more of them you can create, the more you can increase your chances for positive outcomes. You KNOW this already – just trust your instinct and start doing more of it.
Rohit Bhargava is the author of the best selling marketing book Personality Not Included, a guide to how to use personality as a secret weapon to promote your business. He believes strongly in the often quoted wisdom that sometimes the most important things in business are exactly the same ones that we cannot often measure in hard numbers.