The ubiquitous Gary Vaynerchuk asked this in response to a persistent question many were asking: what’s the ROI of social media?
His question has always perfectly encapsulated both the idea of return-on-investment, and my frustration around it.
You know it’s important. It is clear that it is adding value. You know you couldn’t (or shouldn’t) do without it. So, what’s the ROI?
In this case, Gary’s point (yep, first-name basis) is that it doesn’t really matter. It’s important. It’s valuable. So do it.
The lesson isn’t a tough one. ROI isn’t always an easy thing to calculate.
The ROI of an event, a meeting, or lifestyle choices aren’t always line-items on a ledger. What’s the end game? What results were we expecting from our tactics?
What’s the ROI of the “The Big Q”?
It’s a great format. It garners traffic and creates conversation. It’s something we’re known for.
It results in new Slack community members.
Ultimately, it’s a value-add, engaging piece of fun content.
Like social media (and our Mothers), it’s a long play.
Still, be that as it may, ROI is a weird thing.
So, today’s Big Question asks:
What does ROI mean to you?
How do you define, establish, and measure it?
ROI: Not Always a Numbers Game
For Ben Froedge, you need to go beyond the numbers:
ROI isn’t always measured easily by numbers. But if you’ll spend some time looking at what is going on with a platform or investment, you’ll see it.
Why did you start using Slack? Is it doing the job you wanted it to do? Can your team or tribe communicate more easily?
Is a social media platform selling for you? Or is it possibly letting you build positive relationships with your audience?
ROI is when the thing you do moves the needle in the direction you want enough to be worth your investment and more.
And while Ben is all about moving the needle in the right direction, Jennifer Hancock focuses on value. More specifically, what has value for her:
I do things that don’t pay all the time, because whatever it is—has value to me—even if that value isn’t money.
It may be about forwarding a social agenda I have. It may be to go someplace cool. Perhaps it’s altruistic—helping someone out. Maybe it seemed like fun. All of that is valuable to me.
I am a solopreneur, so I do have to guard my time and I do ask myself all the time, “what will I get out of this?”
I rarely weigh monetary gain in making those decisions. It’s mostly: do I like doing this or not? Will this be something I enjoy? Or not? Will this make the world a better place if I do it? Or not?
That is what ROI means to me. But then—I am a Humanist and am a firm believe that business should be about more than just making money.
It should also be about making the world a better place—for individuals and for society.
And I consciously choose to consider ALL the things I value (work-life balance, social justice issues, helping people, fun and making a living) into my decision-making matrix.
The ROI of Treating People Well
What do they say? A chain is no stronger than its weakest link.
While there are many interpretations of that (just like calculating ROI), I take it to mean our team is one of our most important resources.
We have to support and nurture it to succeed.
Philip Williams agrees:
What’s the ROI of treating your employees well?
ROI means a high Alignment, low Friction team where nobody spends excess time trying to explain themselves, what they’re doing, or why they’re trying to do it.
The ROI of treating your employees better than your competition treats theirs means you don’t spend time interviewing and training replacements.
It’s a soft number, but you feel it in the work environment, and in the ease with which everything gets done.
The value of team’s collective experience solving problems together over a number of years is immense—and hard to measure!
Tip 1: Have your employees pot-luck or eat out at least once a month. Don’t talk shop, just eat. The company should pay for these meals.
Studies have shown that teams that eat together work more efficiently because it improves non-verbal communication and overall relationships.
Tip 2: Give your employees time off outside of the stated HR policy, especially when someone has been working long hours on an important project.
You’ll pay hard dollars for the added time off. But no biggy, you’ll gain it back in the form of even greater dedication and effort.
Appreciation is a two-way street.
ROI Equals Relevancy
Mike Kawula tries to focus on the intent of the actions in question and warns us not to get lost down the many rabbit holes these discussions can create:
I love this question and totally get Gary’s point, but I don’t believe many entrepreneurs get it.
They’re on Social Media, attending conferences, out at networking events, but aren’t looking at the actual potential ROI of that for their business or their brand.
You can’t just do something because others are. You need to know what the intent is, as a business owner.
I’m a huge fan of the Eisenhower Matrix, and as business owners, we need to ask ourselves daily how we’re spending our time and what that end objective is.
For instance, let’s be honest, I’m answering this in hopes of obtaining a link to my new website.
I have an intent of what this activities outcome will result in my moving up the ranks of Google.
ROI on Social Media can be measured, but what entrepreneurs need to do is not get caught in a trap of discussions that aren’t relevant to your business.
It’s very easy to go down a million rabbit holes.
If you’re on Twitter, for instance, are you intentionally pulling up Twitter lists of influencers you’re trying to connect with? Are you pulling up lists of journalists who cover your niche?
If so, that has ROI for your business.
Otherwise, if you’re just scrolling and looking at friends and industry news, that ROI might not be impactful.
Sidenote: Well played, Mike. Well played.
Do What You Need to Do
As we’ve already discussed, ROI isn’t always about the hard numbers, and it’s subjective, but it can also be painfully clear.
Just ask Jamie Thomas:
ROI to us means that we’re saving the lives of animals efficiently—and doing nothing but that which is productive toward that goal.
When we first founded in 2009, we did a lot of community events and began to make great relationships with businesses in the area—especially pet stores.
It helped us get our name out there and get established. Being foster-based, we didn’t have a building people could see or go to.
We created a virtual presence by exposing people to our mission where they were.
Fast forward nine years to this point, however, where we have so many requests we are forced to turn down at least one-third of them regularly.
We are booked six-to-twelve months out and we are still in high demand. What we have learned is that we have crossed a threshold where we would easily spread ourselves too thin if we did them all.
So we have to choose based on their potential ROI.
This is not always money, however, although certainly, that is indeed a factor.
Many events in our industry do not make money, but they provide other benefits, such as giving our animals personal exposure to potential adopters—an opportunity they’d not have living in a private home.
We work around the clock as it is (unpaid), therefore everything has to bring significant value and/or reward for the animals… we’re working on their behalf.
While we work for free, the animals can’t! So we are their managers in a sense, setting up PR events and auditions that seem to be the most likely to yield a positive result.
For example, some people really want to adopt, but maybe they aren’t ready. They’ll often want us to hold the animals for them.
We simply can’t do this. That’s not what’s best for the animal in question, and it prevents another coming in to be rescued.
We can, though, offer a boarding option.
Say someone is going on vacation in two weeks. When we contact them to congratulate them on their adoption, they will take the dog home, then bring them back to us for boarding during, which ends up being a fundraising/cashflow opportunity for us.
Ultimately, we are either directly saving animals or raising money for them—and nothing in between.
This can be hard for people to understand sometimes, but when lives are on the line, we have to be firm. We can’t expend effort in vain.
ROI: Long-term and Short-term Goals
From Tonya McKenzie:
Your ROI for any project’s marketing and public relations efforts are based solely on the long-term and short-term (immediate) goals for starting the project in the first place.
If it’s a matter of drumming up excitement for an even to meet certain attendance goals, those numbers need to be calculated and compared to the amount of money infused into those marketing and public relations efforts.
The short-term immediate results should have long-term implications.
What do you do with those initial patrons of the event?
The long-term goal would be to turn them into brand loyalists and repeat attendees/customers/clients.
You can always recalculate the ROI to include the additional patronage that you got out of that initial marketing/PR/advertising campaign.
As you continue to grow your business, increase notoriety and raving fans, the ROI on all of your marketing/PR efforts will increase.
ROI Needs to Be Top-of-mind
Kim McCumber makes an important point: Knowing that you need to be thinking about ROI is more than half the battle.
I think the most important thing to remember is that ROI cannot be an afterthought.
You must be ROI-centric from the beginning.
With this mindset, you can clearly define your goals and implement a strategy for measuring success and ROI.
For example, if a company is implementing Slack or another in-house communication tool, what’s the measurable goal?
Two common goals might be reducing the number of face-to-face meetings and creating more dialogue within the company.
Around the first goal, determining ROI is easy. Over a typical month, how many meetings occur within the company and how does that change after implementation and adoption?
The second goal requires a little more strategy. Think about how you can measure the amount of dialogue/communication currently taking place (perhaps staff surveys, interviews or tracking internal calls) and compare that to the amount of communication occurring after implementation (now including your new communication tool).
To put it simply, determine why you’re thinking of doing this thing and what you hope to accomplish.
Determine how you can best measure the current state and the post-implementation state.
You might have to get creative and may even need to revisit the question of why you’re looking to implement something to understand the measurable impact you’re hoping to achieve.
The KISS of ROI
Jen Devore gets the final word because she is all about keeping ROI simple:
ROI from marketing means measurable leads. Without leads, it’s all worthless.
Need leads? Always have a compelling message and an offer.
Bam. :mic drop:
Up Next: Sign Me Up
How many of you received a slew of GDPR emails at the end of May?
Emails asking for re-permission to keep sending you more emails.
Weird, I know.
Let’s spam people to make sure they know we aren’t going to spam them.
Joking aside, it is a necessary evil to make sure we maintain the integrity of our lists and continue to add value to our audience.
With these emails in mind, I had an opportunity to reassess what newsletters I would stay subscribed to.
Those daily or weekly roundups that make it easier to know what I need to read.
During a lively Spin Sucks Community discussion, a community member called out how much they enjoyed Almost Timely, Christopher Penn’s (a Spin Sucks Community and PR Dream Team member) email newsletter.
I hadn’t signed up yet, so down the rabbit hole I went… (hint: it’s great, you should sign up).
I’m not too picky, to be honest.
It isn’t hard to win a spot in my inbox.
(Inbox Zero and I aren’t on friendly terms. Yes, I know there are two types of people in the world based on this barometer. Guess which one I am? More on that in another article.)
Others are more discerning.
Which are you? Bringing us to next week’s Big Question:
What are those favorite email subscriptions you love seeing in your inbox every day?
What criteria do you consider before signing up? At what point do you unsubscribe?
You can answer here, in our free Spin Sucks Community, or on the socials (use #SpinSucksQuestion so we can find you).