1. Social business is about making money

Welcome to the first installment of the Pathlight Solution's Business of Social Business series. 

 

There is sooooo much talk about metrics and KPIs to support social business design.

And metrics = good.  Business needs to be measured and monitored.  And KPIs = good so individual and group contributions can be identified so folks can be rewarded.

However, don’t be fooled by articles or professionals professing that business is really about people and culture and not money.  Or about how you should focus your business solely on creating value for your customers and then the numbers will take care of themselves.

Those are ivory tower sentiments -- and of little help to executives.

 

This article is now part of The Business of Social Business eBook, available on Pathlight Solutions, our sister site.  Click here to learn more about the eBook.

0. Introduction to the Business of Social Business eSeries

It's time to get serious about the Business of Social Business and our new Pathlight Solutions eSeries eBook will jump start your efforts.

The opt-in eSeries eBook will arm you with the insights you need to incorporate sound business fundamentals into your social business design.  At a high level, the series will focus on the topics of:

  • Social business strategy and its implications,
  • Blasting through social media ROI myths.
  • Valuation of social initiatives and solving its inherent challenges.

 

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Chatting with Paul Greenberg about social media ROI

Yesterday, I had a great chat with Paul Greenberg, Mr. Godfather of CRM and all-around nice guy, while demo’g ValueRight Social Media.

Our convo took a number of twists and turns, spanning from valuation methods that take a more traditional approach to social media like ValueRight.  We also segued into the need for new metrics that will better reflect the full value of social media.  The sort of metrics centered on Customer Lifetime Value (think V. Kumar).

Absolutely!

We both agreed, though, even innovative new metrics will still conversion into

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Why Value differs from Benefits & the impact on social media

If you want to understand how to perform valuations of corporate initiatives, including social media, then you need to understand the difference between value and benefits.

Benefits are what you get from a corporate initiative but Value is the money you receive from increased revenues or cost savings.

Benefits are intangibles and some will directly derive from specific feature functionality.  Others will be sourced by emotions.

In contrast, Value is tangible -- and it's currency.

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FREE Webinar - How To Determine Social Media and SCRM Value and ROI

Find out how to determine social media and SCRM value and ROI at a complimentary webinar sponsored by Pathlight Solutions, a subsidiary of Intellicore Design Consulting.

Date: December 10, 2009
Time: 2 pm EST (USA)
Presenters: Kathy Herrmann, partner, Pathlight Solutions (and Intellicore Design Consulting).

In the webinar, you'll discover:

  • Social media gains and costs - and the time-value of related cash flows.
    • Gains = Revenues and cost savings
    • Costs = Personnel and technology
  • The secret to managing uncertainty.
  • How to determine social media and SCRM Net Present Value and ROI.

Who should attend:  C-Level execs – as well as anyone interested in understanding how to perform a rigorous valuation of social media and its supporting technology.

 

Register today for the must-attend Social Media and SCRM Valuation and ROI webinar and focus your efforts on determining whether social media is the best customer-facing initiative for your company to undertake.

If you have any problems registering, contact me for help here.

Yes Virginia, You Do Need to Determine a Social Media ROI

I just finished an interesting article by Steve Woodruff who asked the question “ROI in Social Media – Where Does it Belong?”  He launched his article by writing:

“What’s the ROI of Social Media?” I hear that question all the time, and it drives me crazy.

Huh. I’m driven crazy by the opposite question…Why wouldn’t you expect to provide social media valuation to your executive team (just as you would for any other corporate initiative)?

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Social Media ROI course coming soon!

I’m a big believer in the value of wildcat corporate initiatives.  And I get that sometimes those buggers are hard to quantify.  It can happen when you’re blazing new trails and surrounded by unknowns.

Despite the unknowns, you still need to put a value to the opportunity.  Doesn’t matter if you’re drilling a wildcat well in a new territory, developing a new product like an iPod, or diving into social media.

Why the need to access value?  Because when it gets right down to it, most companies are opportunity rich but still resource limited (especially relative to personnel).  And rather than throw money at any old opportunity, you need to find the ones that will give you the best return. 

Soooo, segue to an article I wrote on Social Media ROI at the end of October.

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Here’s a way to determine social media ROI

Here’s a true but little known story about me....I decided to attend Virginia Tech after I visiting a family friend who was a student there.

Diane took me to a frat party and I had fun...a lot of fun...and VT zoomed up to my top college choice, thanks to my "punch"-influenced impressions. (Fortunately, the gods were with me, because VT turned out to be a great choice for me career- and otherwise.)

I bring up the story, though, because it reminds me of what's happening in social media...where execs are being asked wing social media decisions based on impressions. Social media initiatives provide real-world benefits -- but execs can and should expect to consider their economic value relative to other customer-facing initiatives.

Yes, it's hard to determine a social media ROI because of the combination of a long-term investment and unknown variables. But...

Not having a clear idea of how to determine a social media ROI doesn't mean it can't be done.

Want to know how?  Think like an upstream oil company.

Yes, really.

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