Try Return on Engagement instead
Dustin and Rob have an interesting conversation going on about measuring ROI in Social Media. I’m increasingly perplexed by this concept.
How do you measure “investment” in social media? A wordpress.com, blogger.com or ActiveRain blog costs exactly $0. Let’s say you get one deal per year by blogging. A facebook profile costs you exactly $0. Let’s say you convert one lead from your facebook network into a deal per year. Let’s see, anything divided by zero is… Infinity, I guess. That’s one hell of an ROI!
Okay, so there’s the time factor. Sure it takes time to write a blog or do the social networking thing. You can do this during unproductive times of the day. Nobody at the open house? Type. Waiting for a client to show up for a meeting. Type. Kids gone to bed and the spousal unit is watching a boring TV show? Type.
Consider the opportunity costs
Now, consider the opportunity costs of not sharing your expertise. If you don’t write about what you know, the only people who benefit from your knowledge are you and your current clients. Knowledge is a Realtor’s greatest asset and to not share it is to squander it. Basically, to not share your expertise widely is like holding your expertise in inventory, and everyone knows that holding inventory costs money.
I’m going to go out on a limb and say that the net cost of blogging is effectively zero dollars. Some will quibble with this, but remember to consider the opportunity costs of holding your knowledge closely.
How do you measure “return”?
Okay, now how do you measure “return”? Well, let’s consider the more conventional marketing avenues: Can you ever say for certain that you converted a lead into a client BECAUSE of the newspaper ad, or BECAUSE of the calendar, or BECAUSE of the church pot-luck dinner? Not likely. It was probably a combination of factors that helped you convert them. There is no silver bullet. So to which activity do you attribute the return?
I’m in the habit of saying that in order to be successful in any business, you need to be able to do a bunch of things well, not just one. So it is in real estate: You need to figure out which bunch of things you’re going to be good at, and ignore the others. If you hate cold-calling and you can get leads by blogging instead of cold-calling, why would you spend your time doing what you hate? It shouldn’t take a psychologist to tell you that you’ll get better results by doing what you love.
A squiggly line
Based on my personal experience, I’m also fond of saying that I can’t draw a straight line between my blogging efforts and any success I’ve had in business. But I can draw a squiggly line. 2007 was the most remarkable year of my career, and I attribute it in large part to social media. Did I get a new job just by blogging? Nope! I networked in real life. Did I get the freelancing and public speaking gigs just by blogging? Nope! I got papers published and spoke for free. Did I just blog my way into a photo shoot and get my picture taken for the cover of my professional society’s national magazine? Nope! I volunteered for committees, showed up for events, and followed through on commitments.
Could I have done all of the above without blogging? Maybe one, but definitely not all three.
We’re so convinced that we can measure everything! I think that in some ways, the social web renders certain bedrock business equations, like return on investment, null and void. If small is the new big and free is a business model, we certainly have a paradigm shift to deal with. Are you comfortable with ambiguity? Are you willing to try a less objective measure?
I offer a different equation
So I offer a different equation: Return on Engagement. Instead of thinking about return on investment, consider how you can engage your social media farm. The extent to which they’re engaged with you is the extent to which they’re likely to think of you when they need to move. And because referrals will come when there’s trust and engagement, even though you may NEVER convert someone in your social media farm into a client, they will be more likely to think of you to the extent you’ve engaged them through social media.
This concept won’t resonate with everyone, but I know many genius agents understand this intuitively.
Rob Hahn
March 25, 2008 at 3:10 pm
Interesting points, Ben. But even your shifted metric has no data available, no proof in the pudding.
Return on Engagement still connotes a return on an activity. In the marketing world, the key isn’t the result per se (the transaction) but “lift over control”. Meaning, holding all other factors equal, does Activity X result in a significant, measurable improvement over not doing Activity X?
You can draw a squiggly line — you networked in real life. You got papers published, etc. etc. Would another person who also networked, who also got papers published, etc. have had the same success you did without blogging or social networking?
If the answer is Yes, then all of your blogging and social networking had zero return on engagement as well.
I’ll post more over at Notorious, as your well-considered post deserves an equally well-considered response. 🙂
-rsh
Sparky
March 25, 2008 at 3:30 pm
Ben – Thanks! You answered my question!….
Todd Carpenter
March 25, 2008 at 3:31 pm
I totally see your point Ben, but for me, there’s no such thing as spare time. The monetary cost of social media may be very low, but the time it takes is considerable. That same time could be used to cold call, or send out a newsletter, or even kick back and watch hockey. No matter what, it’s not free.
Ben Martin
March 25, 2008 at 3:47 pm
@tcar I never once mentioned spare or free time. I called it unproductive time.
I’d be curious to hear your feedback on the analogy of knowledge as inventory.
Todd Carpenter
March 25, 2008 at 3:57 pm
I see unproductive and spare as the same thing. Time is time, and If I’m going to devote it to work, it has to pay off. My blogging efforts have definitely paid off, but if the time was better spent doing some outside of the web, I’d drop blogging in an instant.
I totally agree with you knowledge analogy. Websites tell customers that “I’m the expert”. Blogs prove it.
Sparky
March 25, 2008 at 4:08 pm
Time is still money, regardless of whether it’s unproductive time or otherwise. So in some sense, you probably could measure/gauge the ROI on your social networking time. But for me, I don’t see the value of qualifying something that I already know if working effectively.
Wade Young
March 25, 2008 at 8:59 pm
I don’t have any unproductive time. At work I am busy from the time I arrive until the time I force myself to depart. At home I have a wife and a 5 year old — enough said. The fact that the social media isn’t paying off in real dollars for so many people is disconcerting to me. I know that some people hit home runs, but most bloggers fail to produce results in the dollars category, at least as far as I can tell. I agree that people should blog if it works versus doing something they hate — such as making cold calls. I like networking, so I spend a lot of time at that. Blogging isn’t a zero cost endeavor. The cost is extremely high. Doing it right requires a lot of time, and time is the most valuable thing any of us has. I think it also requires a tremendous amount of patience as those who do see results in terms of dollars often do not see them until they have been blogging for quite some time.
Ben Martin
March 26, 2008 at 12:02 pm
Wade, wow, we lead very similar lives. I have a demanding job, a wife and a five year old, too! I will disagree that time is the most valuable thing. Expertise is more valuable in my view. If time were more valuable than expertise, Realtors would charge by the hour. I don’t have anything else to argue with you about. 😉
Laura S Flournoy
March 26, 2008 at 12:09 pm
Ben,
Never has it been so obvious to me that while for some the cup is half full…. to others it is half empty. Social media does seem to have played a very important role in your life and career. But I would be willing to bet that your disposition has added the immeasurable successes to your career, and would no matter what field you were in. Great writing.
Bob
March 26, 2008 at 1:22 pm
i like this paragraph. I think it is the crux of the value of blogging. I don’t write trivia, I seek to write what engages the reader in such a way as to meet a need. As a result, what I have written about over the last 6 months has engaged hundreds and is now generating several listings a week. By June 1st, it will easily be a listing a day.
What I don’t do is write for the sake of writing. I’m not that good a writer and not that interesting a read.
It’s that principle that is the Achilles heel for many agents who blog with no results because they have little knowledge to bring to the table and it shows in what what they write about.
Andy Kaufman
March 26, 2008 at 3:57 pm
I’ve thought about this for a while and what I’ve determined is that your ROI from Social Media Marketing is closely aligned with how much you’ve embraced it as a way of life.
Social Media Marketing is MUCH bigger than blogging. It’s commenting, it’s twittering, it’s facebooking, it’s flickring photos, it’s digging & stumbling articles. We use these tools to connect and to help each other out which in turn it helps us. My network is my personal community. I’m continually looking to build it and interact with it in ways that provide value so that when I need something, I’ve already built a reserve of social capital to draw upon.
Another thing…Online friends are great, but crossing that digital divide and connecting offline makes those bonds that much stronger. That’s the reason why SXSW rocked so much. There were great panels and great parties, but getting the chance to connect with so many of my online friends in real life was what really made it so special.
Plus you get to learn things like… Benn really doesn’t have a perpetual coffee mug in front of his face 24/7 😉
ines
March 26, 2008 at 9:39 pm
Putting everything aside – to think of all the friends that would welcome me into their cities all around the nation that I wouldn’t have known if it weren’t for social networking is truly amazing. I received 3 referrals this week through social networking. To me it’s a no-brainer – but it does take time. If I wouldn’t enjoy it, it would be a totally different conversation.
Jacob Morgan
March 29, 2008 at 7:37 pm
right on Andy, we definitely have the same point of view on this (thanks for the blog comment by the way). Social media is all about crossing the digital divide and connecting with people offline!
Looking forward to the barcamp, sounds like an awesome time
Jacob