The ROI of Social

Whenever we talk to someone about adopting social for business use, one question that keeps recurring is “What is the ROI ?”. Like any investment in technology today, some sort of measurable return needs to be identified in order to justify the expenditure, so the question invariably gets asked.

The Conversation
Let’s dial the “way back machine” to 1900, when the telephone system was still in its infancy.

 “So Mr. Smith. You have witnessed the demonstration of our latest communications device. Your impression?”

    “It is truly a marvel, sir. The ability to communicate long distances by merely placing this device to my ear and speaking into this horn... truly a marvel!”

      “Indeed, sir. We envision is to be a useful addition to any business concern.”

        “Well, while it is truly a technological marvel, I hardly see it as a useful addition to my business. How many of these so-called “telephones” are there now in use?”

          “Almost 600,000, and growing!”

            “Ahh. But how many are being used for personal affairs versus transacting business? I know of none of my associates who are currently availing themselves of your services. Perhaps if I was plying my wares to the general public consumer, I might express more interest, but I am currently supplying goods to other businesses exclusively. Businesses that, to date, do not adopt technological curiosities as part of their day to day routine.”

              “Well, we predict that this device will enable faster communications, thereby shortening the time currently taken by posting correspondence, or even alleviating the high travel expenses that you currently incur to visit your business associates in person...?!”

                “Are you implying that I should transact my affairs with no written record of my business interactions? Paper has weight, man! Are you mad?”

                  “No, no sir. You misunderstand. It is just that some of your business activities could be assisted by the direct intercourse, rather than the to-and-fro of post, or expense of travel. And as for the number of subscribers, we predict that businesses will eventually adopt our system and join our exchange as a normal course of business, as common a practice as having milk and ice delivery to your home, or a stable for your horses!”

                    “Well, when that day comes, perhaps I will reconsider, but for now I have neither the time nor the inclination to change my current business practices in the hopes that my business associates will one day join in. Good day to you, sir!” 

                    Accelerating Adoption
                    Like automation for manufacturing, the telephone was eventually adopted by business, and became an indispensable communications tool. By 1905 there were 2.2 million subscribers, and by 1910 over 5 million people conversing and transacting on Bell’s telephone system. By 1948, the 30 millionth phone was added in the US.

                    While it took 50 years for the telephone to evolve into the indispensable tool that it is today, society’s adoption of new technologies has also accelerated. While web sites were a curiosity to business in the late 1990s, they are an absolute requirement for business today. Ask yourself - would you do business with a company that doesn’t have a website? No website probably means it is a scam.

                    Accelerated Adoption - Some fun facts
                    Today - 40 percent of the world’s 7 billion people go online to search, create, learn and engage in social networking each day. Facebook - 1 Billion users, Twitter - 554 Million users, LinkedIn - 225 Million users.

                    Smart devices are being introduced to business, with the resulting BYOD headaches for IT and senior management. What it also brings with it is the ability to interact at an even faster pace than merely picking up the telephone and dialing a number. Let’s compare;

                    The phone call:
                    - Find the number for the party you want to call
                    - dial it
                    - have the phone system place the call
                    - ring the phone of the party you are trying to reach
                    - wait for them to find their phone
                    - let them answer and go through your greeting exchange
                    - ask them a question
                    - wait for them to find the answer
                    - listen to the answer
                    - thank them for the answer, exchange more pleasantries
                    - eventually say your goodbyes

                    Elapsed time: anywhere from 2 minutes to 3 hours, depending on how chatty you are.

                    The instant message:
                    - start typing your question
                    - let the smart device find the actual address to send it for you based on a fragment of identifying information, like “mom” or “John”
                    - wait for the other party to respond, typically from information also on their smartdevice so it’s easy to copy and paste and hit reply
                    - read your answer.

                    Elapsed time? Seconds!

                    What’s more, if you didn’t get the answer on your first call, then you needed to start calling more people to try and get the information. With instant messaging and social, you can broadcast your question to literally millions of people who can get you your answer, or even find your question already answered on a forum with a simple search.

                    The ROI - You will still be in business in five years
                    My point? Social is fast overtaking all other forms of communication. When parents even text their kids to get them to dinner, you know the fine art of verbal discourse is fast fading into the sunset. The telephone has been pwned, and social channels are taking over.

                    Where does this leave us? For business, you need to look at it from the Innovator’s Dilemma perspective - social is disrupting traditional forms of business intercourse. When was the last time you used a telex machine (for those of you in your 50s and older!) ? When was the last time you used a fax machine (for those of you in your 30s or older) ? When was the last time you called someone to ask them a quick question versus texting them (for those of you 5 years old and older)?

                    Today, grade school children are using cloud services like Google+ for their education materials and delivery of their work, on iPads as their medium, and universities are no longer issuing email addresses since they aren’t being used anymore. That’s your workforce in the next 5-15 years. It is time to take a long hard look at who you are doing business with, and ask yourself if you aren’t already too late to the dance when it comes to social adoption? How long before email joins the ranks of the telex and fax machines?

                    Asking about the ROI of social is moot - could you do business today without a telephone or email? Social is fast joining them as required business tools.

                    Excuse me, I need to respond to this tweet...