Open Doors

When you start talking about social media in the business world, you quickly begin to bump into the ROI question (and if you do, get the insight you’ll need from Olivier Blanchard and buy his book, Social Media ROI).

ROI matters. But for many individuals, consultants, entrepreneurs, small businesses – and yes, even larger businesses – that’s not the only measure of value. There’s another factor to weigh in the balance.

Is this activity likely to produce new opportunities? Potential referrals? Broader awareness? Open doors?

Much of what I – and many others – do via social networking is driven by this long-term view, which is based, not on immediate hard returns of dollars-tied-to-specific-efforts, but by what we might call natural human and marketing principles.

Building deeper human bonds with quality people will, in ways both direct and indirect, lead to increased business opportunities. Do you believe this? I do. And I think it’s true for the solopreneur as well as the biggest brand. That means networking – whether the digital/social variety, or good old-fashioned pressing the flesh (note: I believe in both, together).

An example from my own experience: #LeadershipChat on Twitter. Very little direct revenue has come to the co-hosts (Lisa Petrilli and me) for all the time and effort we’ve put in. HOWEVER – the expansion of our networks, the quality contacts with some very influential people, the collaborations that have occurred, not only for us, but among others in the community – these are worthwhile returns, and the future opportunities yet to come as a result of this initiative will, I’m quite convinced, impact business on multiple levels.

I will trade immediate resources of time and effort for open doors tomorrow and next year. Not only for me, but for others.

Speaking of LeadershipChat, this coming Tuesday (April 10), we’ll welcome John Jantsch, Mr. Duct Tape Marketing himself, talking about referrals and small-business marketing in a networked world. Join us for some new thinking, new network contacts – and, who knows?, maybe some new open doors!

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Recent posts on Connection Agent:

>> Customers Walking Past You

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Getting a GRIP on ROI

ROI and social media? It matters, of course.  It’s important to measure what a specific investment of dollars has returned by way of dollars – but ultimately, this is a post-hoc measurement, right? When people demand ROI calculations up front, what we’re really talking about is projections – and we need to project more than that.

Looking to try some new initiative? Don’t simply talk about ROI. You should talk about anticipated or estimated impact on goals for something you do or do not do. Thinking about “return” in the direct financial sense is too narrow. Ultimately, aren’t you really all about attaining specific goals?

Let’s change the conversation. Don’t we really just want to get a GRIPGoal Realization Impact Projection – on everything we consider doing?

Take a business considering the use of social media. For most for-profit entities, the goal is business growth. What we really want to know is, how will our involvement (or non-involvement) in social media impact our growth? Based on trends, case studies, market opportunities, and common sense, what do we project will occur if we invest (or fail to)? Potential ROI is part of this – but it is not the entire pie.

One reason it is important to think this way is that it is impossible, in most cases, to make direct/accurate correlations between specific activities and specific results. Why did that person call a certain realtor to list their house? Was it the billboard they saw that morning, the accumulation of ad impressions in the local paper, the business card found in a drawer, the recommendation of a friend, a 2nd level connection on Facebook, or some or all or none of the above? What’s the ROI on a radio spot at 7:48 am Thursday – or the one on Friday?

Another main difficulty with a more narrow ROI approach is the focus on short-term thinking. But many initiatives have to be designed for impact over the long haul. How many people will try Loveless Cafe in Nashville because of this – 28 years later? And while we’re at it, what about the positive (or negative) non-financial impact that occurs? See Olivier Blanchard’s very smart ROI posts for more on this theme.

On the other hand, getting a GRIP is a much more holistic and sensible approach to evaluating the relative value of any initiative. GRIP can include ROI estimates, but as generally practiced right now, viewing everything through ROI spectacles doesn’t do a great job taking into account the broader issues at play.

One way to “grid it out”:

…or something like that.

My friend Olivier Blanchard (who has been critiquing my thought process with this post) brings up a great point – what is the currency or measure that one would use in the GRIP model? My sense is: that depends (don’t you love consultants?). Because the issues and applications go beyond business and dollars, the measures can have quite a variety.

So, here’s a non-financial / non-biz example – someone wants to know if they should set up a personal Facebook page. Main goal: keeping in better touch with family/old friends. Getting a GRIP on this could be as simple as identifying the main factors (benefits/drawbacks/resources), and setting up sliders as a relative scale. What will emerge is that, while there will be a short-term extra effort learning the platform and setting up, the long-term savings of time and effort will far outweigh it.

Similarly, for business, short and long-term financial return, the PR value/risk, the internal resources, the potential direct and indirect “reach,” and other factors all can be put on scales to help figure out the potential for better realizing goals.

The model is still soft clay – what do you think of such an approach? Valuable? Useless? Tweaks? Add your thoughts in the comments…

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Holistic Common Sense and Social Networking

I enjoyed reading my friend Amber Naslund‘s post recently entitled The Taboo (but critical) Community Skill. Essentially, what Amber says is that we should not neglect the importance of selling skills – after all, all of this community engagement needs to lead us to some kind of business outcome.

As Amber put it:

When we talk about community or social media people in business roles, we talk about a lot of things.

Their ability to communicate, to interact. To be helpful. To be a diplomat and a conversationalist and a steward of the brand. But because it’s so often a taboo subject in social media, we miss talking about a pivotal skill that I think community professionals need to have. Sales skills.

Now I happen to agree with Amber. We cannot be fastidious about the reality that we are promoting, selling, seeking to grow business. I think we need to look at social media, and those who are tasked with putting it to use, under the very holistic umbrella of Business Growth. In fact, just swap out “social media” and put about anything in its place. The very broad category of Communications. A sub-category, On-line Communications. And a sub-category of that, Social Networking. How do each of these functions contribute to the things that contribute to the “Big Thing” – business growth?

Instead of overly simplistic questions like, “What’s the ROI of Social Media?“, business people should move backward from the “Big Thing” – business growth (more sales, new customer acquisition, better efficiency, great hires, etc.), and then look back to those elements that contribute to it – see the bullet points in blue above.

Now, in order to accomplish those tasks, what long-term strategies need to be in place? You can swap out Communications with IT or Management or various other disciplines – all of it should be geared toward business growth.

Now, think about social networking as part of the larger bucket of Communications. Don’t get narrowly focused in on the ROI of Social Media. Instead, use Holistic Common Sense. Will involvement in these communication approaches help create awareness, build a fan base, build a pipeline of prospective customers, sell your offering, serve customers, position you as a thought leader, influence a market, and provide marketing intelligence?

If social media (or anything else – fill in the blank) will significantly help accomplish these goals, leading to business growth, then come up with a good plan and make the commitment to employ a workable strategy. If not, then don’t.

You may be able to calculate some ROI on specific tactics and approaches over time. But look, first and foremost, at what will lead to business growth. That’s your ultimate goal – right?

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Return on…Whatever

My latest MarketingProfs Daily Fix post focuses on the compulsion to try to establish Return on Whatever (RoW). I argue that the RoW is only appropriate for a limited subset of tactics that can be directly measured as to results…many good business decisions need to be made based on doing what we believe is right.

Extract: The problem is, the RoW mindset can inhibit people from making sound business decisions for the simple reason that something is the right thing to do. The green-tinted RoW glasses can be like handcuffs, preventing businesses from implementing healthy long-term strategies because of a compulsion to show short-term tactical dollar returns. Calculating financial returns on specifics, in other words, can be a murky science at best – and a ball-and-chain at worst.

Here’s the entire post: Return on Whatever

This link brings you to all my MP DailyFix posts.

Social Media and RO__why?

A thought-provoking post by Debbie Weil on the ROI of Social Media had the effect of…well, provoking some thought.

tape-measure.jpgI’ve always had a hate-like relationship with ROI and its many first and second cousins (ROE, ROC, ROwhatever). The concept is sound at a certain level – if we invest (x), what will be our Return on that Investment? This works well in the tangible, definable, prior-track-record arena of business.

The problem is that it is a narrow, accounting-centric, and transaction-centric set of lenses. And not all decisions (both business and personal) are best viewed through the green RO__ eyeshades. Some things cannot be given proper value based on scheduled dollar returns. And some things, like Social Media, are emerging and evolving – no track record. We’re still making up the rules for crying out loud!

When it comes to Social Media and other aspects of business and life where measured returns are “squishier,” trying to do ROI calculations is a matter of undergoing artificial contortions (this has been true in the training industry, where I’ve been involved for many years). So you have to exercise judgment, faith, vision, and long-term thinking, answering this question primarily: is this likely to have a positive impact?

At the risk of oversimplifying the already obvious, I think a judgment about the value of Social Media and other such avenues can be made based on weighing these three factors, some of which don’t fit nicely into the simplistic RO__ model:

    Anticipated Positive Benefit (APB) – both long-term and short-term!
    Anticipated Potential Risk (APR)
    Anticipated Resource Allocation (ARA)

roi-borg.jpgIf the potential benefits outweigh the foreseeable risks, and there are sufficient time/people resources to move ahead – then why require make-believe ROI calculations? Just plow ahead and make things happen.

Just spewing here. What are your thoughts? I’m sure many of you are already running into the Business Borg (“ROI Resistance is futile…”) – how do you work around it?

(Image credit-tape measure)

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