I’d love to have a follow up post to this on the technical problems with measuring social media ROI, so if you’d like to somehow contribute to that please let me know (since I’m not a very technical person). I’m not going to go over every single business challenge, just the major ones that I believe I true obstacles for large organizations.
CMO Lifespan
The average lifespan of a CMO is around 2 years. This means that by the time a social media strategy is researched, developed, created, launched, and measured; that the CMO may not even be around to see results; therefore why fund it? Many CMOs would much rather focus on investing dollars where they can see a return while they are still employed at their company.
No Metrics
Lots of companies still don’t know what the average price per transaction is, what the customer purchase cycle is, how much time support people spend on the phone, etc. This means that for a lot of companies there is no place to start benchmarking from. So, before you can even start a social media strategy you have to worry about getting benchmark numbers and data. A lot of companies are lacking in the tools and approach to measuring ROI and any sort of impact from social media. This makes it virtually impossible for someone such as myself to come in and help an organization. Neither myself nor any other consultant or agency is going to be able to measure any type of ROI for you unless you know where you are starting from.
Corporate Culture
Some companies love social media and other companies fear it. A lot of companies want social media but they don’t know why they want it or what it will mean for their organization. Companies need to have realistic expectations and time frames for social media; companies also need to realize what social media means in terms of making their organization social, transparent, and authentic. Legal departments and many senior level executives fear social media because it means they are losing control of their brand and their image. Other senior level employees believe that social media is a waste of time and that their employees should not be spending their time on sites such as facebook or twitter. Addressing the issue of corporate culture means looking at all of these issues and more to see how the company views social media and what changes need to be made before the company can adopt it.
Focus on Social Media and not on the Product or Service
It doesn’t matter how much money you spend on marketing, if you don’t have a great product to market that people want then you’re just wasting your time and your money. I think at this point a lot of consultants are just taking on any and every project they can get their hands on, regardless of the quality of the product or service. This isn’t helping anyone. Companies have money to spend on marketing and many consultants have money they want to take regardless of the project; this is a lose lose situation for the company, the consultant, and the industry.
Corporate Fragmentation
Among executives and senior level employees there is still a very big gap in terms of understanding and expectations from social media. There is a lack of communication and collaboration for social media efforts. Ownership, budgeting, leadership, accountability, and data/metrics are things that a lot of execs and senior level folks can’t seem to agree on or talk about. Changing your company into a social organization is going to take time, I’m talking 1 year+ (if you’re lucky); you’re literally changing the way you do business and that’s not going to happen in a month or two.
Semantics
A big problem I see today is that we have way to many definitions, acronyms, and jargon to describe things in the social media space. We’ve all heard at least 3-4 definitions for ROI, and we keep making up more on a daily basis. We have influence scores, sentiment scores, indexes for influences and engagement; and a plethora of other things. The problem is that instead of us speaking in business terms we are speaking in social media terms (which are oftentimes made up) which don’t make sense to executives that are the ones funding these initiatives.
Tools
I think it’s great that we have a few tools out there such as Techrigy and Radian6 that are helping companies measure and monitor the social media space but they are still not near being able to show or understand how companies can measure ROI. Right now the focus is on sentiment, brand mentions, conversations, etc which is great; but we need to tie in all these things to a dollar amount at the end of the process.
These are some of the big business issues I see in the social media space that are really hindering our ability to understand and to measure social media ROI; I’m sure you can think of a few others out there so please share them in the comments!
