Google’s Wave application is emerging as the next “shift” for enterprise social media. As part of their sales process Google has provided prospective customers with an outline to help them justify their investment in Wave. It is clear that Google foresees the “market of conversations” growing to a point that businesses will either jump in or fall out.
The way Google positions the need for enterprises to engage is in their statement which says “Bottom line: More and more business is going to transact via Twitter, LinkedIn, Facebook and other applications yet to be developed. This train is too important to miss.”
The Google ROI Pitch
Below is what Google suggest as an outline for measuring ROI from Social Media activities.
Average lifetime value of a typical account x expected new lead close% = LEAD VALUE
Next, calculate whether your social media efforts are paying off. Here’s an easy-to-use method. Choose a consistent time period for each calculation (monthly, quarterly or annual):
- Hours invested in social media activities x average hourly rate = SOCIAL MEDIA COST
- Social media cost ÷ target contribution margin% = BREAKEVEN
- Number of social media leads x lead value = SOCIAL MEDIA GENERATED REVENUE
- Social media generated revenue ÷ breakeven = SOCIAL MEDIA PAYBACK INDICATOR
If your social media payback indicator in step 4 is greater than 1.0, you are on track to experience a positive return on your investment. There are many ways to refine these calculations and tailor them to your specific needs, but at least this is a starting point.
You may still believe payback calculation is akin to the dark arts. After dealing with this admittedly imperfect science for most of my career, I can sympathize. Rest assured these calculations need to be done, not only for social media, but for any marketing activity.
Social media is here to stay. More personal communications are being sent via social media than email, which is mindboggling. Technological developments are on the horizon. Google has announced a new quasi-social media platform project called Wave which promises some interesting features. This and other intriguing tools have the potential to change the game.
And again they say :Bottom line: More and more business is going to transact via Twitter, LinkedIn, Facebook and other applications yet to be developed. This train is too important to miss.
A Game Changer…..
Business strategies are indeed a game. Who can predict where are market is going and how can your business be there before the competition. Technology has arisen as the #1 game changer for all industries. Yet, current leaders seem to be out of touch with how the game is changing. Don’t think so read this “Do Leaders Walk Or Talk The Talk”. While the market of conversation is indeed changing the game leaders are listening to the wrong conversations, their own.
Corporate leaders demand that management follow them. managers demand that employees follow them. Organizations think the consumer will follow them and their offerings. The game has changed and people are following people rather than brands and institutions. To lead the game or change it you have to hear what the market is saying. Listening to your own rhetoric is not listening to the market. The ROI from social media is called listening and responding. Get it?
What say you?