There are countless blogs, videos, infographics and Slideshare presentations that all do their best to explain the return on investment for social media.
Like many social media strategists, I’ve heard the same stories in the corporate world, usually involving the inevitable line, “social media is important but how do we know if we’re getting our money’s worth?”
Many still, while accepting the importance of social, doubt the possibility of a determinable return on investment.
To this point, I offer this theory.
Understanding Social media ROI is like understanding the role of your pet cat and dog.
Anyone who owns a cat knows they really aren’t a pet; they’re more like an employee (or housemate, depending on the kind of cat) but not a pet. Whichever you decide, ultimately it is they who decide when you can cuddle them.
A dog, however, is the opposite – loyal, lovable and exist for a scratch on the tummy and a feed.
I should know – I have a cat and a dog. They’re a perfect test case; I adopted them both very young, so it is easy to see occasions of their natural instincts.
Cat: Bringing Home the…uh, bacon… mice
Since we’ve had the cat, he has brought in a regular supply of mice and rats (with the occasional bird outside his remit, but we’ll put that one down to ‘upskilling’).
In return his wage is food, a comfortable igloo, and his value is shown through cuddling. So let us say he’s brought in 10 mice and two birds in three months; the ROI can be broken down from a quantifiable perspective:
12/3 = 4 per month, balanced against cost for food/shelter/cuddles.
Dog: Can happiness be quantified in dollars?
The dog, on the other hand, is the family’s best friend, bringing happiness, joy and slobber to our lives.
But he doesn’t have a specific ROI does he?
His contribution is one that’s psychological – how do you put the price of a happy family that has a joyful experience?
What he contributes to the household doesn’t have a direct quantitative value – if you start counting licks and hugs then you’re missing the point. His presence creates opportunities for new interactions from the good experiences he creates.
Like any theory, this one isn’t fool-proof. One response to my theory (or simile?) pointed to guard dogs and seeing-eye dogs as having potential for an ROI. But can you really quantify their value? Unless you witness them ward off a threat or save someone from imminent danger, how do you know?
Cat = Product social RIO; Dog = Customer Service social ROI
If you have a determinable product that people can buy through a social channel (say iPhone) units shifted is quantifiable. If you offer a service it becomes less clear.
The question often asked is: what does attaining a social media ROI mean?
The real question should be: ‘what’ investment are you putting in to get ‘what’ result?
If you’re after community engagement, your ROI could be X amount of time + money into content development = X amount of engagement stats/percentage.
I’ll leave you on this thought: perhaps the cat represents the ROI social media can bring via a product, while the dog represents the social ROI of customer service.
Of course, like any theory, this one is open for constructive criticism – what do you think?