I’ve begun to wonder whether the question, “What’s the ROI on Social?” is a kind of post-modernist Zen koan. It’s one of those questions that is often asked, yet that has no rational answer.
I shared this thought the other day with Todd Wilms, one of our social media experts at SAP. “The problem with the ROI question,” he said, “is that traditional ROI formulations revolve around pretty simple questions: For every $1 I invest, what will I get back in revenue or my bottom-line? But the question misses the real value of social, which can manifest itself in a variety of ways that seldom connect directly back to a Facebook posting or forum response. Social can reduce your sales cycle times, create new opportunities for up-selling and cross-selling, increase customer loyalty, even create a sense of personal engagement with a company that might not otherwise exist in the same way.”
Indeed, what we tend to forget when we think about social networks and business is that business has always been about social and always been about networks. Put another way, it’s always been about relationships and the investments you make in those relationships.
Think about it: it really matters less what you’re selling than whether you’re meeting your customer’s needs. Sometimes what you’re selling is exactly what the customer needs; sometimes, though, you add even more value simply by listening and paying attention to your customer’s desires.
Winning with a losing bid
I know of a man who once found himself in a sales situation that he could not win. For various reasons, he knew he would not be able to underbid his competitor (who was sitting across the table from him during final negotiations). But rather than throwing in the towel and walking away, he sat at the table and diligently went through the motions of preparing a final bid.
When it came time to submit those bids, this man passed a “bid” across the table that consisted of a note politely explaining that he could not offer a lower price than he had offered previously. At the same time, he went on to explain, by making it appear that he was prepared to offer a lower bid he knew that he had forced his competitor to lower his bid even further, thus engineering a situation in which the client would be getting the best possible deal on the merchandise they were seeking.
He walked away from the table without the deal he’d flown halfway around the world to get—but his clients knew what he had done and that gambit resulted in a relationship that has led to much more business in the long run. He looked out for his clients, even though he could not meet their ostensible need, and that consideration has never been forgotten.
Paying it Forward
Investing in social involves a similar gambit, a kind of pay-it-forward approach from which rewards will accrue. Social gives you an opportunity to engage with customers, just like corner store shopkeepers used to, but this time on a global scale. You can interact with customers from around the world, to listen, get their opinions, to form a more intimate relationship with them than you might otherwise be able to.
You may not need — or even want — to sell aggressively in social. Simply by looking for ways to meet new and existing customers’ needs, to become a “friend” and trusted advisor — whatever the domain area, and without regard to whether their needs can be solved directly by your products or services — you increase the value that you deliver to your customer. They may then turn to you first with belief, loyalty, and hope that you will provide a suggestion or recommendation that meets their needs.