What’s the ROI of answering the phone?
What’s the ROI of watering your lawn?
What’s the ROI of putting on pants?
What’s the ROI of having restrooms in your restaurant?
These are all actual lines I’ve heard, just this week, in support of ignoring the role of ROI in establishing the effectiveness of brand efforts in the social media space. There are hundreds of others. Ignoring for a second the completely arbitrary and increasing flawed notion that “social media” is distinct from the web in general at this point, each of these examples continues to point to the exuberant ignorance so many of “social media experts” flaunt on a nearly daily basis when talking about their own work and value.
A couple points I’d like to make:
1) Each one of these is used as though it were rhetorical, when in fact, businesses make judgements on these types of questions every single day. Every restaurant owner has to pay ACTUAL dollars to maintain their washroom. This is one aspect of their “I”nvestment in their business. In “R”eturn they hope this invest plays a part in people dining at their establishment. If this restaurant owner wanted to find a more solid dollar value of this investment, she could easily just block off the restroom and see the effect on her business. Whats the ROI on mowing the lawn? Ask Nike how much they spend maintaining the grounds of their WHQ campus. Then ask them how much of a factor that campus is on retention for them. Want to know the ROI on putting your pants on? Try going to work one morning without pants. Then try paying your rent once you’ve been fired. Thats ROI.
My point is this: it’s fun and cute to toss these pithy lines around, but it might be worth your time to make sure they’re based in some semblance of reality first. Your own inability to see the value in these things only proves YOU can’t measure it, it doesn’t mean there isn’t value.
2) I’d be inclined to let the purveyors of this flawed logic hang their own careers expect for this: when you devalue your work, you devalue mine too. While YOU may have to wave your hands at the notion that YOUR work has any measurable return, I don’t. But when you pedal this baloney, you make the hill steeper for all of us.
Please stop.
I not only believe the work Fight does contributes positively to the bottom line of our clients, we work very hard to prove it. When you say things like “Whats the ROI of putting on pants?” you’re basically equating the work I do to something literally any one can and does do every single day. The logical conclusion a client could draw from this is that brand activities on the social web are something that you should do, but not really consider, or worry about, or invest in. Like pants. Im not sure then how this leads to needing specialists. I don’t need to hire a special person to put my pants on me each day. If helping brands succeed on the web is the same thing, why would hire any one to help me with that?
Nice piece Justin.
It’s like if one was to describe the most important attributes of their favorite restaurant – they would most likely say food, ambience and service rather than a clean kitchen or bathrooms. These things are a given, or as some people refer to them as “greens fees.” They are the cost to play in the market in the first place.
People become obsessed with metrics because they are a tangible yardstick of measurement. Economist Robert Chambers said “quantification brings credibility.” But count the numbers and only numbers count.
We haven’t solved John Wanamaker’s conundrum yet, but we’re sure on the right track.
On a personal note, I have never seen any ROI in wearing pants.
Hey Charlie – I like your style, pants should be optional.
Any way – agreed, sometimes these things can be simply the cost of doing business, and despite the rant-y nature of the post, I do believe there is a larger context for looking at ROI. I’m the last person in the world to try to push all projects towards a DR notion of ROI. But because I do work mostly on brand level issues, and I because I believe this work to be an investment on my clients part rather than an expense, I strive to show value for my work. Mostly what I would love people in this industry to take to heart is that everything a business does costs money, and everything that costs money needs to be justified. Even if our only justification in pure self-preservation, it seems like a good idea to get all things brand related on the “investment” side of things rather than the “expense” side of things.
Justin I think you may be over-reacting just a bit here.
The ROI on the phone is actually a legitimate question. How much do you need to pay your call center/receptionist/customer service people? That’s more along the lines of where I was going with the ROI on the phone comment.
I’m a big believer in businesses holding marketers’ feet to the fire to show that they’re making money on their advertising – but it’s got to be done in the right way, asking the right questions.
Most business owners don’t know the right questions to ask, so they try to institute complex ROI formulas that they learned in business school – which they may or may not understand.
Well, given that it was among the rant-y-est of my posts, which tend towards the rant-y any way, chances are I was almost certainly over-reacting.
That said, Im curious about what aspect of ROI formulas you take exception to. I ask this honestly as I don’t have a business background, so I don’t have much experience approaching this from that point of view. Acknowledging that though, it would seem that if these formulas are not correct, we should be establishing new ones, rather than collectively (not you specifically obviously) waving our hands at the notion of ROI altogether.
uberVU - social comments // Feb 23, 2010 at 12:13 pm
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This post was mentioned on Twitter by znmeb: ROI + Pants http://meb.tw/crLLma...
Try coming up with a formula for ROI on an internal knowledge management and collaboration system.
Management – “why should be spend x dollars on a revved-up internal employee social media knowledge management system when you can’t guarantee that employees sharing and collaborating knowledge about our business and clients will grow revenues X amount next quarter”
Employee (thinking) “if I could demonstrate a provable ROI on social media, I wouldn’t be stuck working here in this place”
This blog post also makes me remember a previous employer who hired a “lean sigma guru” who came in, gave a company wide presentation and said:
guru: “what department do you work in?”
employee: “administration”
guru: “you provide no financial benefit to the company. Your ROI is zero”
guru: “what department do you work in?”
employee: “sales”
guru: “do you exceed your targets?”
employee: “yes”
guru: “you bring value and ROI to the company”
as you say, ROI perspectives are very different
Hey Mike –
Yes, they do vary widely, and often sadly.
That said, my feeling is that there isn’t a problem with the notion of ROI, after, the ROI on administration staff is pretty easy to calculate and pretty obvious. The problem, as I see it, is that on one side, you have people who only see ROI as a single step process – you do something, you make money. On the other hand, there are those who see ROI as so complex as to not be worth calculating at all.
Excellent response. Marketing is obviously the biggest area for budget and probably the area where the ROI question is asked the least!
Excellent response. Marketing is obviously the biggest area for budget and probably the area where the ROI question is asked the least!