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Measuring Return on Investment in Social Media Marketing is Fuzzy Math

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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.

(Photo credit)

Writer for national real estate opinion column AgentGenius.com, focusing on the improvement of the real estate industry by educating peers about technology, real estate legislation, ethics, practices and brokerage with the end result being that consumers have a better experience.

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22 Comments

22 Comments

  1. 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

  2. Sparky

    March 25, 2008 at 3:30 pm

    Ben – Thanks! You answered my question!….

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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. 😉

  9. 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.

  10. Bob

    March 26, 2008 at 1:22 pm

    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 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.

    Knowledge is a Realtor’s greatest asset,

    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.

  11. 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 😉

  12. 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.

  13. 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

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Opinion Editorials

10 tips for anyone looking to up their professional game

(OPINION / EDITORIAL) It’s easy to get bogged down by the details, procrastinate, and feel unproductive. Here are a few tips to help you stay on track and crush your professional goals.

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Self-reflection is critical to a growth mindset, which you must have if you want to grow and improve. If you are ready to take your professional game to the next level, here are some stories and tips to help you remain focused on killing your goals.

1. Don’t compare yourself to others. Comparison is the thief of joy, as the quote goes. And, in the workplace it’s bound to make you second guess yourself and your abilities. This story explains when comparison can be useful, when to avoid it, and how to change your focus if it’s sucking the life out of you.

2. Burnout is real and the harder you work, the less productive you are. It’s an inverse relationship. But, there are ways to work smarter and have better life balance. Here are some tips to prioritize your workload and find more ease.

3. Stop procrastinating and start getting sh@t done. The reason we procrastinate may be less about not wanting to do something and more about the emotions underlying the task. Ready to get going and stop hemming and hawing, you got this and here’s the way to push through.

4. Perfection is impossible and if you seek this in your work and life, it’s likely you are very frustrated. Let that desire go and learn to be happy with excellence over perfection.

5. If you think you’re really awesome and seriously deserve more money, more responsibility, more of anything and are ready to drop the knowledge on your supervisor or boss, you may want to check this story out to see if your spinning in the right direction.

6. Technology makes it so easy to get answers so quickly, it’s hard to wait around for things to happen. We like instant gratification. Yet, that is another reason procrastination is a problem for some of us, but every person has a different way/reason for procrastinating. Learn what’s up with that.

7. Making choices can be a challenge for some of us (me included) who worry we are making the wrong choice. If you’ve ever struggled with decision making, you know it can be paralyzing and then you either make no decision or choose the safest option. What we have here is the Ambiguity Effect and it can be a real time suck. Kick ambiguity to the curb.

8. If you are having trouble interacting with colleagues or wondering why you don’t hear back from contacts it could be you are creeping folks out unintentionally (we hope). Here’s how to #belesscreepy.

9. In the social media era building your brand and marketing are critical, yet, if you’re posting to the usual suspects and seeing very little engagement, you’ve got a problem. Wharton Business School even did a study on how to fix the situation and be more shareable.

10. Every time you do a presentation that one co-worker butts in and calls you out. Dang. If you aren’t earning respect on the job, you will be limited in your ability to get to the next level. Respect is critical to any leadership position, as well as to making a difference in any role you may have within an organization, but actions can be misconstrued. There are ways to take what may be negative situations and use them to your advantage, building mutual respect.

You have the tools you need, now get out there, work hard, play hard and make sh*t happen. Oh, and remember, growth requires continual reflection and action, but you got this.

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Why soft skills are even more essential in online era

(OPINION / EDITORIAL) Since many of us aren’t seeing our co-workers in person these days, our soft skills are even more important in the online working space.

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Skype video chat with person writing in notebook. Soft skills are critical online.

When did we start thinking of “soft” as bad? I mean, we’ve got soft serve (excellent), softball (good exercise), fabric soft-ener (another industry I’m enjoying killing as a millennial). And we’ve got soft skills.

Or at least… I hope we do.

The shift to non-optional remote working has been difficult for a lot of us, especially for everyone who forgets to press mute before making sure the kids behave. But it’ll take more than being hot-mic savvy to make it through the foreseeable future. Brush up on these soft skills while we’re waiting on a vaccine, and it’ll make the coming months (years?) much easier.

1. Tone mastery

Do you know the difference between “Hey, Brenda, can we have a 1:1 at 12:30pm to go over the laser-equipped yoga pants presentation details?” and “Brenda, we need to talk…”?

If not, you might not have a great grasp on how to say with your typey-words what you can no longer say with your facial expressions. You don’t need to throw an emoji or exclamation point into every sentence to get your points across, but you do have the power to keep your coworkers’ heart rates in a safe range by explaining what exactly you need from them in your initial messages.

Use that power wisely.

2. Checking in

There’s no water cooler talk if there’s no water cooler, right?

Making and maintaining connections is more important now than ever, natural introversion be damned. You wanna be a star, don’tcha? Keep up relationships with public shoutouts, inquiries, and reaction images, and you’ll keep up morale while maintaining and boosting your potential for growth in the company.

Even if you’re not a small-talk kind of person, just a drop in for updates, meeting minutes, or sharing a relevant article via appropriate chatrooms and DMs can help hone your soft skills.

“Karen, this MLM article reminded me of your anti-Scentsy tangent you forgot we could all hear, maybe send this to your pushy ex-friend.”

“Hey, Ravindra, how’s the new laptop working out? All good? No ‘Kill all Humans’ protocols like the last one?”

Simple blips like this can add up like couch change. If you’re an admin, make a general chats section, and work in enough time in meetings to allow everyone to have a bit of a chat before getting down to business.

3. Make yourself available

This was important before the pandemic, honestly, but it bears repeating now, especially for everyone in a leadership position. If you’re not making time for check-ins, constantly cancelling meetings, or just generally enjoying being gone when people need you…figure out a way to not. Delegate what you can, bring on a VA, shorten that vacation, whatever you have to do. Everyone’s struggling, and being captain means your crew is looking to you. Don’t let the general air of desperation lull you into thinking a metaphorical keelhauling is out of the question—that extra power still comes with extra responsibility.

Keep yourself from double-bookings, cancellations, and absences as much as possible, and things will continue to improve internally… Even if they don’t in the outside world.

Aesop had a fable about an oak tree and a little river reed. When a storm came, the hardened oak tree fell and died, while the flexible reed bent with the wind and lived. We’re in the storm now, and everyone’s doing their best not to break. Keep yourself rooted friends, but the moral here is to soften up.

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Opinion Editorials

Before you quit your job, ask yourself these 5 questions

(OPINION / EDITORIAL) Frustrated at work? Here are 5 ideas utilizing design thinking and exploration tactics to assess if you really are ready to quit your job.

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Man reclining on beanbag with laptop, thoughtful. Considering tactics before you quit your job.

We have all been there. We are in a job that just doesn’t feel right for us. Maybe we strongly dislike our manager or even our day to day work responsibilities. We find it easy to blame everyone else for everything we dislike. We question life and ask “Is this what life is all about? Shouldn’t I be spending my time doing something I am more passionate about?” But, we probably like the regular paycheck… Thus, we stay there and possibly become more miserable by the day. Some of us may even start to feel physical symptoms of headaches, stomach aches, and possibly depression. We also may go to the internet like this person seeking answers and hoping someone else can tell us what to do:

“I feel conflicted but I want to quit my job. What should I do?

I was thinking of quitting my job because I dislike what I do, and I feel I am underpaid.

However last week my colleague tendered her resignation too. Needless to say, if I leave too, my whole department will fall into a larger mess and that causes some feelings of conflict within me.

Should my colleague quitting affect when I want to leave too? How do I go about quitting now?”

We can definitely empathize with this – it’s really uncomfortable, sometimes sad, and hard to be in a position where we feel we are underpaid and we aren’t happy.

So, how can you navigate a situation like this? How do you figure out if you should just quit your job? How can you be an adult about this?

Here are some exploratory questions, ideas, and some design thinking activities to help you answer this question for yourself.

  • Before you up and quit, assuming you don’t yet have your next opportunity lined up, have you considered asking for a raise – or better yet, figure out how you add value to the organization? Would your supervisor be willing to move you in to a new role or offer additional compensation?
  • If you don’t have a job lined up, do you have the recommended AT LEAST six months of living expenses in your savings account? Some would recommend that you have even more during a global pandemic where unemployment is at an all-time high – it may take longer to find a new position.
  • Do you have a safety net of family or friends that are willing and able to help you with your bills if you don’t have your regular paycheck? Would you be willing to put that burden on them so you can quit your job?
  • Why aren’t you job searching if you are unhappy? Is it because the task seems daunting and the idea of interviewing right now makes you want to puke?
  • What would your ideal job be and what would it take for you to go for it?

Many people claim they don’t like their job but they don’t know what to do next or even worse, don’t know what they WANT to do. To offer a little bit of tough love here: Well, then, that’s your job to figure it out. You can go on Reddit all you want, but no one else can tell you what is right for you.

Here are some ways to explore what may be an exciting career move for you or help you identify some areas that you need to learn more about in order to figure out where work will align with your skills, interests, and passions.

  1. Consider ordering the Design Your Life Workbook that provides writing prompts to help you figure out what it is that you are looking for in a job/career. You may also like the book Designing Your Work Life which is about “How to Thrive and Change and Find Happiness at Work”.
  2. Utilize design thinking to answer some of your questions. Make a diamond shape and in each of the four corners, write out the “Who” you want to be working with, “What” you’d like to be doing, “Where” you’d like to be, and “Why” you want to be there or doing that kind of work.
  3. Conduct informational interviews with people doing work that you think you might be interested in. Usually these conversations give you lots of interesting insights and either a green light to pursue something or validation that maybe that role isn’t right for you either.
  4. Get your resume updated. Sometimes just dusting off your resume, updating it, and making it ready gives you a feeling of relief that if you did really want to pursue a new job, you are almost ready. Consider updating your LinkedIn profile as well.
  5. Explore what you can do differently. A lot of what we can be frustrated about can be related to things out of our control. Consider exploring ways to work better with your team or how to grow to become invaluable. Tune in to Lindsey Pollak’s podcast, The Work Remix, where she gives great ideas on how to navigate working in current times where there are five generations in the workplace. There may be ways you need to adjust your communication style or tune in to emotional intelligence on how to better work with your supervisor or employees. Again, focus on what is within your control.

You may decide that you need to quit your job to be able to focus your energy on finding a better fit for you. But at the same time, be realistic. Most of us have to work to live. Everyone has bills, so you may continue working while you sort out some of the other factors to help you find a more exciting prospect. Either way, wishing you all the best on this journey, and the time and patience to allow you to figure it out.

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