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Wednesday, April 15, 2009

ROI on Social Media? Not so fast...

A friend of mine sent me this link. The article is about whether or not social media improves the bottom line. Does it increase sales and productivity or does it ultimately become a time-trap? Having spent most of my career in sales and business development, it immediately piqued my interest. Have a look:

http://snurl.com/fyzzc

The opening of the article is "... companies are struggling to locate enough social-media-generated revenue to justify the time and resources expended on them...". This sort of pragmatic approach doesn't really work when it comes to social media and the business 3.0 paradigm we're moving in to. The whole premise of the article assumes that engaging in social media is an option. I think we're going to see that in coming months and years, it will become a pre-requisite to many, if not most new business relationships.

Here's my take: social media is a by-product of GenX/Yers hungering for more authenticity. The line between our personal lives and professional roles has become permanently blurred. With social media, it's less about the polished image and scripted messaging, and more about the true grit of what someone is bring to the table. Good, bad or ugly, at least you know what you're getting.

Social media personalizes and legitimizes your marketing and branding efforts. Someone has to actually care what you have to say, for your messaging to have impact. Things have changed. There's too much noise for simple TOMA strategies or old skool sales 101 alone. People now want a more personal experience and it begins with social media (and face-time).

Stein makes a great point though, as it relates to sales success. "The challenge is, once a connection has been made through channels such as LinkedIn or Twitter, salespeople still need to have the knowledge and resources to follow through to conversion...If I don't have the skills, the tools, or [the] people...then that sale will never happen," Stein is right, social media doesn't somehow negate the need for good salesmanship or technical ability. Social media is simply the setting in which credibility is established and trust is created.

So there's an insurance guy's take. Social media doesn't sell insurance policies. Social media simply provides a powerful and authentic medium for new relationships, and relationships are where all good sales are made.
Posted by Chris Nordyke at 5:46 PM

3 comments:

  1. I like your take on this subject. I think that the lines definitely have been blurred between personal connections and business connections. As a group, Gen X/Yers have grown accustom to instant results, searching for what they want and finding it with little or no work.

    As consumers we're expected to use these technologies to find what we're looking for and to help us make decisions, and it's the responsibility of businesses to engage with us. If they don't, they will be left in the dust.
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  2. I make my living with web technology, and as such I am also critical of it. I think "experts" have been rushing to say social media is the panacea of relationship building. Yes it can remove barriers and provides access to sources in ways not achieved before. However, are we seeing actual impact?

    What does success look like with social media efforts? I think it can complement other sales and business relationship building, but does not replace them. But again, the social media revolution is just beginning. We do not know what the successful business models are yet.

    Think about the popularity of YouTube. It's the 3rd most visited site on the Internet (Alexa rankings), yet it lost $400 million!

    Just because it has the 'social media' label doesn't mean it's a sustainable business practice.
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  3. I knew you would have some good thoughts on this topic Chris. Thanks for delivering.
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