ROI is often a dirty word when used in the context of social CRM. But, as Laurence Buchanan explains, whether it is measurable or valid may not be the key question.
For some reason ROI is often a dirty word when used in the context of a social CRM initiative. Metrics are abundant but dollars are often harder to find. It’s easy to point to a metric like number of followers, page impressions, percentage of positive sentiment, etc. but ultimately all of these are just leading indicators. Every boardroom I have been in to have asked the tough questions:
- How much is this going to cost me?
- What cash flows will I get in return?
- How will this enable me to achieve my strategic objectives?
- What are the risks?
- How does the proposed course of action compare against other (viable) alternatives that I have?
I couldn’t imagine facing off to a hard-nosed exec without having answers to these questions and responses like "we need to join the conversation" simply don’t cut the mustard. Kathy Herrmann nails this point in her webinar on "How to determine Social Media and SCRM value and ROI":
"There are folks who seem to view social media initiatives as a special class of corporate initiative that’s exempt from Business 101 fundamentals. That astounds me, especially when you consider how the costs for social media can climb... It is unrealistic not to expect execs to demand an ROI on any major corporate initiative. Companies run on money, not on tweets or the number of friends they have."
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