Upping Your Social Media ROI

Recently, I spoke at a conference on a panel titled, "How to Measure Social Media ROI." One of the things I noticed, both at this conference and in my career, is that everyone is fixated on the return part of the ROI equation, but nobody wants to talk about the investment. When it comes to collecting the return, we're ready to roll out the red carpet, but what about the investment that makes the return possible? What are you willing to invest to get the return you say you want?

Why We Become Disillusioned
Social media is a flexible and customizable medium for businesses to leverage, but it's been the unfortunate subject of mainstream media hype. I'm sure you've read stories of businesses achieving seemingly overnight success via MySpace or some other social media tool, but social media isn't flat-out magic. "No one really sees the 90 percent that you put into your social media efforts," says Scott Ginsberg of HELLOmynameisSCOTT. "They only see the 10 percent--the results."

Ginsberg should know. He started his blog, HELLOmynameisBLOG, in October 2004, and for the first six months, he had hardly any comments or feedback. But he persevered and in August 2005, one blog post led to an invitation to speak at a marketing conference, which helped him meet more than a dozen new clients--and get a $100,000 contract. Now that's ROI.

Unfortunately many companies don't persevere. One study, from the book Naked Conversations, showed that about one out of three blogs are abandoned within a year. "Social media has created an ADD-like generation of people who don't want to wait for the return," says Ginsberg. "There's a lie being spread that tells people to work smart, not hard. Working smart is possible when you've built your business up, but initially you have to work hard and long."

Between the ultra-hyped stories of social media coups and the declining focus on the overall investment, it's very easy to see why entrepreneurs become confused and impatient. To avoid disillusionment, it's vital to consider the two elements of ROI--the return and the investment.

The Return
The return is what you hope to gain from social media, both in dollars and intangibles, like increased speaking engagements, better conversations with target markets, more fruitful connections, increased revenues, increased visibility and buzz.

Taking the time to determine what you'd like to gain from social media before delving in could keep you focused while ramping up sales. Once you've set goals for your return, the next question is: What are you willing to invest to generate those results?

The Investment
In the same way that currency is not solely monetary, neither is your investment. You should consider what kind of energy, organizational staff and other resources you're willing to invest to get the desired return.

Lest it be forgotten, a good portion of your investment is also your message--having something unique and interesting to say about what's going on in your industry instead of rehashing the same material over and over.

But what if you don't have the resources necessary to make a strong investment?

No Resources + Substantial Expected Results = Major Let Down
Recently, a client came to us because they wanted to start using social media to increase their thought leadership and generate more speaking opportunities for their CEO, but they didn't want to invest a lot of money or time. Our response was, "If you don't have access to resources that you can leverage to make this project a success, then we suggest that you buy an ad in a trade publication and call it a day."

One of the golden rules of social media is: If you don't have time, you need money or other additional resources; if you have no money, you need to have time and energy. You can't be strapped for both cash and time and expect a grand result. That just isn't realistic.