Being vs. Using “Social” Creates ROI

by Jay Deragon on 01/06/2010

Everywhere we turn those who proclaim to understand social media are talking about measurement and ROI from social marketing. The market sentiment for this year is starting off with a focus on such things and the market is buying what the market is saying about all things social. But exactly what are they buying?

It seems that everyone is trying to justify the time, effort and expense of using social media by creating measures that are centric to financial results.  OK, determining a return on cost and aiming to produce results is rational.  However just maybe the organizations demanding such things miss the real issues that actually produce results and need to be measured.

And Those Issues Are?

Being social and using social media a two totally different things. You can use social media to raise awareness of your proposition and hope to “catch” buyers. You can use social media to engage people with your organization and hope to move them to a transaction. You can use social media to sell more stuff because people are looking to buy stuff.  However, in the long run social media could back fire on you if your organizations culture is not designed to “be social“.

In a recent Business Week article titled “Zappos Retails Its CultureChristopher Palmeri writes “Customer service reps are given plenty of freedom. They may chat for hours with customers, write thank-you notes, send flowers, and even direct shoppers to rival Web sites if an item is out of stock. In a tough year for retail, sales are up by double digits.

Zappos rep Michelle Robles recently showed a reporter how the approach works. She offers coupons and free shipping to one unhappy customer while grabbing a returned pair of shearling boots for another. Robles knows her top priority is to establish an emotional connection. More than 95% of Zappos’ transactions take place over the Web, so each actual phone call is a special opportunity. “They may only call once in their life, but that is our chance to wow them,” Hsieh says.

David Brautigan, who runs a family heating and air-conditioning repair business indicates what he has learned from Zappos saying “The nicer we are to people,” he says, “better things are happening.” Tony Hsieh, CEO of Zappos, appears pleased to spread that message: “Sharing is how we build our brand.

Zappos brand and subsequent sales were enhanced because Tony focused on creating an organization that was “social” internally (culture) and whose aim was to serve the customer beyond expectations. 95% of Zappos sales were transacted online. Most of the population goes online to find what they want before they decide what to purchase.  What they find about the product, the organization and the market sentiment about experiences other buyers have had with the organization influences buyer decisions.

While focusing on measures and ROI for use of social media seems rational the fact is that social media is nothing more than a new and powerful “communications channel“.  As stated, you may catch buyers by using social media but the buyers intent is not to become friends with your organization unless of course your organization is truly social.  Being social is the root cause of sales (revenue) online and off line. To ignore this means your likely to measure the wrong things just to justify use of social media. 

It is much harder to create an organization that is social than it is to use social media. Being social is an organizational intent. Using social media is the intent of marketers.  See the difference?

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Sarah Reigstad January 8, 2010 at 8:32 am

Being vs. Using "Social" Creates ROI

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