If you are not focusing on achieving business goals with your social media efforts it is not worth doing social media for your business at all. Do you know that 50% of the projects done in Social CRM do not provide a worthwhile return or that 57% of the companies are still struggling with even measuring ROI (let alone achieving it!). So half of the companies doing something with social media are just burning money and not earning money. That is concerning, since if you more burn than you earn, you will end up bankrupt on the long run. Let me help you to first of all identify why it could be that your social media efforts and then finish with the most important bit: how to ensure that you can make money with your Social Media efforts and to make it a sustainable component in your organisation. There are three reasons why your current efforts are not worth doing at all:
- You have no clue why you are doing it.
- You are not measuring returns or you are settling for very little.
- You are not investing in it.
Let me explain these three points a bit more:
Why it is not worth your efforts
The Qualman argument
“The ROI of social media is that your business will still exist in 5 years.” - Erik Qualman
Fear based arguments are great, we humans are a sucker for it. And if you think you don’t fell for fear based arguments: you are using tooth paste, right? And you would hate it if you teeth would yellow, right? Tooth paste is born from fear based marketing, the fear of not fitting in a group of white teeth humans. Even if we are not aware of it, we just act upon such triggers. Back to Qualman. If you happen to work in company that will stop existing in the next five years, what is causing this? Trust me, it is not the lack of Facebook page, or not having a tweet button on your site. If you have no clue what is causing it, or if it is very clear that you will be around in the next five years than you would have no reason to do anything with social media according to Qualman. Which just feels weird…
If you happen to work in a dying company and you have discovered the reason why the company is dying, change the company in a different and more future proof direction. Most often your customers are moving elsewhere, competition is better and prices elsewhere are lower. Social Media doesn’t solve this issue on itself (according to Qualman’s oneliner it would). You have to fix the basis and see how social media can help. It is not a holy grail. You have to drive change and to transform your business and if you are social media in this, you have to make sure it has an impact.
In short: only do social media if you can make an impact. If you have no clue why you are doing it, just don’t do it.
Our returns are not substantial, but it is better than nothing…
Nobody can spend more money than he or she earns. At least not forever. You might have some reserves, some savings. However in the end if you spend more than you earn, you’ll end up bankrupt. There has to be a good return from your social media activities, otherwise you can better invest your time and money in something else. Better than nothing is just a poor man excuse, just go the casino, your chances on a higher return might be better and you are more honest on the fact that you are just wasting money.
You have to make sure that the things you are doing with social media are getting you a higher return than other activities you could deploy with the same investments. Returns that are little are often a sign that you either are not trying hard enough (or you are doing it just plain wrong) or that something else might be more worthwhile doing. Perseverance is a great skill, however if you are just doing the wrong thing it is stupid.
In short: Measure what you do and don’t be afraid to kill your darlings. If it isn’t worthwhile doing, find something that is. Perseverance alone doesn’t make you money.
We minimize investments (aka: the interns are running Social Media)
If ‘Return’ is an important theme in your organisation, then why cut down the ‘Investment’. It is Return on Investment which implies that if you lower the investment, you automatically get a lower return. The fact that interns are millenials doesn’t automatically imply that they know social media better than you do let alone social media in an enterprise setting.
You can learn a lot from interns, since they bring a new perspective, however you cannot expect that an intern will be the one who guides your company to a million dollar opportunity with social media activities. Of course it can happen, just like you can win the lottery: if you are lucky. Interns have a lot learn and if you are lucky they have a lot of questions that in the end will help you in getting things more clear.
In short: If Return on Investment is important, don’t limit your investments by default.
How to make it worthwhile and make money and make it sustainable
If you have read why your efforts might not have been worthwhile, it could be rather obvious what you have to do. However let me elaborate a bit more on this points:
Business goals, business goals, business goals
The only reason to deploy an activity within an organisation it to reach certain goals. If it doesn’t have a goal it is just wasting money and since money is a limited resource in most organisation you’d better not waste too much of it. Social Media can only be effective if it serves a business goal. This can be: increasing revenue, increasing margin, attracting highly competent people, reducing marketing spend. However don’t confuse a vague term such as engagement as a goal. Engagement is a process, not a goal. Business goals are often already set on a strategic level, what you should do it so how social media can contribute to this business goal.
Real Metrics, not vanity metrics
Nobody cares how many tweets you’ve sent out, how many likes you have received or what your Klout score is. If you don’t make money there will be a moment in time that somebody will notice and requires you to start making money. I have written about this topic on this page: How to Measure ROI in Social Business Projects, please read this, since it provides you with good insights in what not to measure, what you should measure and an example business case.
Knowing what investments have for effect
Money and time are limited resources within any organisation. Spending all your money on Social Media will not provide you with the best return perse, you might be able to achieve that with spending less money or spending less time. However you should know what the difference a certain investment makes. Therefore it is important to have the real metrics in place as mentioned before and to know how your social media activities relate to the business goals and what their impact. If you know how much one extra dollar of budget (investment) would deliver as business value (contribution to a business goal), then you can calculate what you require to achieve a goal within a certain time frame and how much time it would require to start earning more than you are spending.
To keep things really simple:
There are three things you have to do to start making your social media efforts worthwhile:
- You have are achieving (or helping to achieve) a business goal with Social Media.
- You are constantly measuring and adjusting based on real metrics.
- You know what happens if you invest more or when you lower your investments.
To test if you have all these three points, try to formulate what you are doing (or going to do) in a way like this:
- When will you start delivering value
- What is it you are doing
- What is your company or your customers able to do
- What are the business improvements
- What is the investment
- What is the payback period
- How will you document your delivered value.
By the beginning of next year, as a result of our web care efforts, customers will be able to get better answers more quickly resulting in an increase in the NPS and a reduction of 40% the number of calls on the service desk. We need to have two FTE and an additional 50k to achieve these goals and the payback period for this is six months. We will document the delivered value by measuring the call reduction on our service desk, measuring the sentiment online about our service and by surveying our clients to measure the NPS.
As final thought: please realize that social media (or better phrased: social business transformation) is a specific competence, a skill that requires training, experience and knowledge. A check list is not the thing that helps you solving issues, you need to involve people who have done this over and over again, who have a proven track record and who can commit to certain targets and deliver on time. Yes those people might cost you money, however as mentioned before: if you want results, you know there has to be an investment.