The ROI of Employees

The ROI of Employees

roi of employees

Over at his blog yesterday, Chris Brogan wrote about his admiration for Gary Vaynerchuk. The post sparked quite the discussion in the comments, a lot of it about ROI (return on investment).

This stemmed from a quip Gary had made to an event attendee who was asking a few times about the ROI of social media, to which Gary replied, “What’s the ROI of your mother?”

A throwaway quip, but one I thought was indicative of why so many people are confused (or afraid) when it comes to using social media for business. I said as much in the comments, and Chris Theisen raised an interesting point with his question: “Do companies actually measure whether each employee has a positive ROI on the company?”.

If they don’t, then they should.

What’s the point in running a business and employing the folks you need if you’re not measuring their impact? Questions you should be asking (and measuring) include:

  • Does John the sales guy bring in enough sales to cover his costs? Great, he may be bringing in $100,000 worth of sales, but if they’re to 100 different customers and I need to hire more customer service advisors to handle their queries, John’s value immediately diminishes.
  • Does Karen the customer service advisor upset my customers? She may be awesome in the office, but if she’s caused 10 customers to leave in the space of twelve months, and they each spend $5,000 per year, her salary of $30,000 per year is now actually $80,000 per year.
  • Does Peter the marketing guy piss off fellow team members and lower their morale because he thinks he’s “all that”? If so, does that stop them doing their job properly and cost me sales, or quality service for my customers? Does it make my employees want to leave, costing me more money to train new hires (not to mention losing the team spirit that had been fostered before Peter’s arrival)?

These are just three examples of where you could start looking, and measuring the impact each employee has on your business. There are many more, and some that are unique to individual businesses and industries – but they’re good starter points, and a pointer for a full organizational development analysis. This can then tell you how to make sure your employees feel as valued by you as they are valuable to you.

If you’re not already measuring the ROI of your employees, then are you really measuring the success of your business?

image: TruthOut.org

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Danny Brown
Co-author Influence Marketing: How to Create, Manage and Measure Brand Influencers in Social Media Marketing. #1 marketing blog in world as per HubSpot. Husband. Father. Optimist. Pragmatist. Never says no to a good single malt. You can find me on Twitter - Google+ - LinkedIn.
128 comments
John Anderson
John Anderson

To build a brand takes time and money. Coke and Budweiser are not stupid. I had to use this in a rebuttle to a client. The right amount of investment is based on the goals. Budgets are muscles to get things done, not reward for a job done. That is commission. Sales people would love if everyone was held to roi because they are the only ones who can proudly at the end of the year put a concrete number beside thier name, but in the words of Obama and Romney, we didn't build that (on our own).

Chris Theisen
Chris Theisen

Danny somehow I just now saw this in a Google Alert, alebit months later. Glad my question inspired the post. I think most companies are horrible at actually measuring what makes them money and whats a positive return. Our company has a suite at the local minor league baseball stadium. We take clients there sometimes and employees use it sometimes. Its a nice perk and a nice thing to do for clients but whats the return on it? Id say negative at best.

Danny
Danny

Hey there Chris,

Great to see you here, mate, and yes, thanks for starting the conversation! :)

There's definitely a problem in trying to calculate the ROI of hospitality. Unless you look at who you invited, costs, and whatever projects or referrals you may get from that.

But that can take years of goodwill, and is that still measurable from that initial suite?

Who knows - but it'd be nice to, for sure. ;-)

Danny
Danny

Hey there Chris,

Great to see you here, mate, and yes, thanks for starting the conversation! :)

There's definitely a problem in trying to calculate the ROI of hospitality. Unless you look at who you invited, costs, and whatever projects or referrals you may get from that.

But that can take years of goodwill, and is that still measurable from that initial suite?

Who knows - but it'd be nice to, for sure. ;-)

Chris Theisen
Chris Theisen

Danny somehow I just now saw this in a Google Alert, alebit months later. Glad my question inspired the post. I think most companies are horrible at actually measuring what makes them money and whats a positive return. Our company has a suite at the local minor league baseball stadium. We take clients there sometimes and employees use it sometimes. Its a nice perk and a nice thing to do for clients but whats the return on it? Id say negative at best.

Danny
Danny

Hey there Chris, Great to see you here, mate, and yes, thanks for starting the conversation! :) There's definitely a problem in trying to calculate the ROI of hospitality. Unless you look at who you invited, costs, and whatever projects or referrals you may get from that. But that can take years of goodwill, and is that still measurable from that initial suite? Who knows - but it'd be nice to, for sure. ;-)

Mark W Schaefer
Mark W Schaefer

I am so sick of these ridiculous statements from people who have never worked in a corporation and had the pressure to produce anything, justify a budget or be responsible for P&L in a bureacratic organization.

It's easy for an small company owner or entrepreneur (like me, or Gary) to throw out a statement like this because the value of social media is intuitive and self-regulating. We can "sense" that the efforts are paying off and put more or less into it based on what we sense we are getting out of it. For this reason, small businesses may actually have a leg up on the big companies!

But there is an implied ROI to everything a company does and just "sensing it" does not cut it in front of a board of directors. Comments like this from Gary are non-productive and dangerous for those who have to face political organizational realities every day.

Danny
Danny

Hey there mate,

Exactly my point - thank you! :)

That's the thing that we're seeing a lot of recently - there are some vague ideas and coulds, ifs and potentials, without there being any actual knowledge of what's involved in the bigger picture.

And that (to me) is a very dangerous thing indeed.

Cheers, sir, always a pleasure.

Mark W Schaefer
Mark W Schaefer

I am so sick of these ridiculous statements from people who have never worked in a corporation and had the pressure to produce anything, justify a budget or be responsible for P&L in a bureacratic organization.

It's easy for an small company owner or entrepreneur (like me, or Gary) to throw out a statement like this because the value of social media is intuitive and self-regulating. We can "sense" that the efforts are paying off and put more or less into it based on what we sense we are getting out of it. For this reason, small businesses may actually have a leg up on the big companies!

But there is an implied ROI to everything a company does and just "sensing it" does not cut it in front of a board of directors. Comments like this from Gary are non-productive and dangerous for those who have to face political organizational realities every day.

Mark W Schaefer
Mark W Schaefer

I am so sick of these ridiculous statements from people who have never worked in a corporation and had the pressure to produce anything, justify a budget or be responsible for P&L in a bureacratic organization. It's easy for an small company owner or entrepreneur (like me, or Gary) to throw out a statement like this because the value of social media is intuitive and self-regulating. We can "sense" that the efforts are paying off and put more or less into it based on what we sense we are getting out of it. For this reason, small businesses may actually have a leg up on the big companies! But there is an implied ROI to everything a company does and just "sensing it" does not cut it in front of a board of directors. Comments like this from Gary are non-productive and dangerous for those who have to face political organizational realities every day.

Danny
Danny

Hey there mate, Exactly my point - thank you! :) That's the thing that we're seeing a lot of recently - there are some vague ideas and coulds, ifs and potentials, without there being any actual knowledge of what's involved in the bigger picture. And that (to me) is a very dangerous thing indeed. Cheers, sir, always a pleasure.

Vizz Media
Vizz Media

Some really helpful guidelines Danny. But we are not sure about one thing. If we talk about Social Media Marketing, its really hard to measure the ROI of each employee because most of the time they work in teams. Its also really difficult to assign each one of them a particular Social Media task. If our Social Media marketing efforts are not effective at a particular point of time, whom to blame? The entire team?

http://www.facebook.com/vizzmedia

Danny
Danny

Good question.

I'd look at it in two ways. While it's a team approach, each member usually has an allocated task (based on the strengths they bring to that project). So you might have a Facebook whiz, a Twitter whiz, a corporate blogging whiz, etc.

If you've given them project management control duties on their tasks, then it's easier to see how successful (or not) they've been and then it down at the end of the project and go over results.

Or, you simply allocate responsibility for the complete project to the manager or project manager that's in charge of the team. After all, at the end of the day, a team is only as good as its leader. You can then see why certain parts worked and others didn't, and make future plans to combat this.

Danny
Danny

Good question.

I'd look at it in two ways. While it's a team approach, each member usually has an allocated task (based on the strengths they bring to that project). So you might have a Facebook whiz, a Twitter whiz, a corporate blogging whiz, etc.

If you've given them project management control duties on their tasks, then it's easier to see how successful (or not) they've been and then it down at the end of the project and go over results.

Or, you simply allocate responsibility for the complete project to the manager or project manager that's in charge of the team. After all, at the end of the day, a team is only as good as its leader. You can then see why certain parts worked and others didn't, and make future plans to combat this.

Vizz Media
Vizz Media

Some really helpful guidelines Danny. But we are not sure about one thing. If we talk about Social Media Marketing, its really hard to measure the ROI of each employee because most of the time they work in teams. Its also really difficult to assign each one of them a particular Social Media task. If our Social Media marketing efforts are not effective at a particular point of time, whom to blame? The entire team? http://www.facebook.com/vizzmedia

Danny
Danny

Good question. I'd look at it in two ways. While it's a team approach, each member usually has an allocated task (based on the strengths they bring to that project). So you might have a Facebook whiz, a Twitter whiz, a corporate blogging whiz, etc. If you've given them project management control duties on their tasks, then it's easier to see how successful (or not) they've been and then it down at the end of the project and go over results. Or, you simply allocate responsibility for the complete project to the manager or project manager that's in charge of the team. After all, at the end of the day, a team is only as good as its leader. You can then see why certain parts worked and others didn't, and make future plans to combat this.

Leon Noone
Leon Noone

G'Day Danny,
I've been preaching the virtue of measurable, identifiable and definitive performance standards for employees for years. Call it ROI if you like. People are the most expensive resource in any business. If you don't measure their contribution, how will you know that the resource investment is worthwhile?

Funnily enough, when staff know that their contribution is being measured definitively, they are far more likely to contribute willingly.

Best Wishes

Leon

Danny
Danny

Hey there Leon,

So true about people being the most expensive resource - I've seen so many companies struggle because they've been loyal to the wrong people for too long.

Like you say, often we can allow ourselves to become lax because we feel comfortable. While it doesn't mean we need to suddenly become all draconian, knowing that we're accountable would definitely stop us from being lazy.

Cheers as always, mate.

Leon Noone
Leon Noone

G'Day Danny,
I've been preaching the virtue of measurable, identifiable and definitive performance standards for employees for years. Call it ROI if you like. People are the most expensive resource in any business. If you don't measure their contribution, how will you know that the resource investment is worthwhile?

Funnily enough, when staff know that their contribution is being measured definitively, they are far more likely to contribute willingly.

Best Wishes

Leon

Leon Noone
Leon Noone

G'Day Danny, I've been preaching the virtue of measurable, identifiable and definitive performance standards for employees for years. Call it ROI if you like. People are the most expensive resource in any business. If you don't measure their contribution, how will you know that the resource investment is worthwhile? Funnily enough, when staff know that their contribution is being measured definitively, they are far more likely to contribute willingly. Best Wishes Leon

Danny
Danny

Hey there Leon, So true about people being the most expensive resource - I've seen so many companies struggle because they've been loyal to the wrong people for too long. Like you say, often we can allow ourselves to become lax because we feel comfortable. While it doesn't mean we need to suddenly become all draconian, knowing that we're accountable would definitely stop us from being lazy. Cheers as always, mate.

Business Strategies with John
Business Strategies with John

This is such a powerful post Danny, and something most business owners over look and under value.

"One bad apple, can spoil the bunch"

Enjoy your weekend :)

Danny
Danny

Cheers John,

Agree, mate - you can either have a great crop of fresh and tasty apples, or let the rot in one spread throughout the rest.

I like my apples fresh and tasty. ;-)

Have a great weekend yourself, sir!

Business Strategies with John
Business Strategies with John

This is such a powerful post Danny, and something most business owners over look and under value. "One bad apple, can spoil the bunch" Enjoy your weekend :)

Danny
Danny

Cheers John, Agree, mate - you can either have a great crop of fresh and tasty apples, or let the rot in one spread throughout the rest. I like my apples fresh and tasty. ;-) Have a great weekend yourself, sir!

Riley Harrison
Riley Harrison

Hey Danny,
My perspective on most things is philosophical as it is with the concept of ROI. My metric is selfishness (Is something in my perceived best interest).And often my criteria for self interest is how does it make me feel. There are times when my blogging objective is purely business (because I want to be successful at blogging) and other times it's for social reasons because that makes me feel good. Now this has really been a stream-of-consciousness type of comment that isn't as coherent as I would like, but it does make me feel good. And I'm not sure I fully understand what I just said, but if you do please get back to me (lol).
Riley

Danny
Danny

Haha, will do Riley! :)

I think selfishness can be good (as long as it doesn't turn into closing your ears completely). Like you say, you want what's best for you - and the best for you usually means you knowing what's not working, so jettisoning it.

Same with measurement and ROI - measure, analyze, act. Often selfishness and good business are both the same thing... ;-)

Riley Harrison
Riley Harrison

Hey Danny, My perspective on most things is philosophical as it is with the concept of ROI. My metric is selfishness (Is something in my perceived best interest).And often my criteria for self interest is how does it make me feel. There are times when my blogging objective is purely business (because I want to be successful at blogging) and other times it's for social reasons because that makes me feel good. Now this has really been a stream-of-consciousness type of comment that isn't as coherent as I would like, but it does make me feel good. And I'm not sure I fully understand what I just said, but if you do please get back to me (lol). Riley

Danny
Danny

Haha, will do Riley! :) I think selfishness can be good (as long as it doesn't turn into closing your ears completely). Like you say, you want what's best for you - and the best for you usually means you knowing what's not working, so jettisoning it. Same with measurement and ROI - measure, analyze, act. Often selfishness and good business are both the same thing... ;-)

Jack@TheJackB
Jack@TheJackB

Does John the sales guy bring in enough sales to cover his costs? Great, he may be bringing in $100,000 worth of sales, but if they’re to 100 different customers and I need to hire more customer service advisors to handle their queries, John’s value immediately diminishes.

I think that this is too simplistic a view. I understand that you prepared a quick example but I think that we need to expand it.

It is a mistake to measure salespeople strictly by the sales that they produce. It may seem counterintuitive to say that because in some ways it is the easiest thing to measure.

However your sales force is out pounding the pavement as brand evangelists and more importantly building relationships that are often invaluable.

Let's use automobiles for a moments as an example. What is the real difference between a Toyota Camry and a Honda Accord.

For the sake of the example we'll say that the models we are comparing are configured similarly.

The answer is that there are relatively few differences and often they are not substantive so prospective customers can either way.

This is where relationships come into play. People prefer to do business with people they like/trust/respect. We can apply that same example to a million different products/services.

And to Howie I would say that I disagree with viewing the world solely through a CFO perspective. Effective branding campaigns have consumers asking for particular products over another.

There is a reason why Hyundai has had to sell their cars for less and provide a more impressive warranty package than other auto manufacturers.

Not to mention the value of top of mind. People prefer to purchase items whose names they are familiar with. There may be no difference in quality/performance between JimBob Televisions and Sony but JimBob will get killed because no one knows them.

Danny
Danny

Hi Jack,

That's true - there is more than "just sales", but it all adds up to the sale. The storytelling; the relationships; the brand advocacy, etc.

The same can be said for customer service; or tech support; of the trainers that go out to retailers and make the sales guys in-store the brand advocates.

The end goal is still the same - you need to be bringing in money. And you could be the most awesome relationship builder and brand advocate in the world; but if you're costing me more than you bring in, then I have a simple decision to make: let you go or let my business go.

I know which decision I'm going to make... ;-)

Jack@TheJackB
Jack@TheJackB

Does John the sales guy bring in enough sales to cover his costs? Great, he may be bringing in $100,000 worth of sales, but if they’re to 100 different customers and I need to hire more customer service advisors to handle their queries, John’s value immediately diminishes.

I think that this is too simplistic a view. I understand that you prepared a quick example but I think that we need to expand it.

It is a mistake to measure salespeople strictly by the sales that they produce. It may seem counterintuitive to say that because in some ways it is the easiest thing to measure.

However your sales force is out pounding the pavement as brand evangelists and more importantly building relationships that are often invaluable.

Let's use automobiles for a moments as an example. What is the real difference between a Toyota Camry and a Honda Accord.

For the sake of the example we'll say that the models we are comparing are configured similarly.

The answer is that there are relatively few differences and often they are not substantive so prospective customers can either way.

This is where relationships come into play. People prefer to do business with people they like/trust/respect. We can apply that same example to a million different products/services.

And to Howie I would say that I disagree with viewing the world solely through a CFO perspective. Effective branding campaigns have consumers asking for particular products over another.

There is a reason why Hyundai has had to sell their cars for less and provide a more impressive warranty package than other auto manufacturers.

Not to mention the value of top of mind. People prefer to purchase items whose names they are familiar with. There may be no difference in quality/performance between JimBob Televisions and Sony but JimBob will get killed because no one knows them.

Jack@TheJackB
Jack@TheJackB

Does John the sales guy bring in enough sales to cover his costs? Great, he may be bringing in $100,000 worth of sales, but if they’re to 100 different customers and I need to hire more customer service advisors to handle their queries, John’s value immediately diminishes. I think that this is too simplistic a view. I understand that you prepared a quick example but I think that we need to expand it. It is a mistake to measure salespeople strictly by the sales that they produce. It may seem counterintuitive to say that because in some ways it is the easiest thing to measure. However your sales force is out pounding the pavement as brand evangelists and more importantly building relationships that are often invaluable. Let's use automobiles for a moments as an example. What is the real difference between a Toyota Camry and a Honda Accord. For the sake of the example we'll say that the models we are comparing are configured similarly. The answer is that there are relatively few differences and often they are not substantive so prospective customers can either way. This is where relationships come into play. People prefer to do business with people they like/trust/respect. We can apply that same example to a million different products/services. And to Howie I would say that I disagree with viewing the world solely through a CFO perspective. Effective branding campaigns have consumers asking for particular products over another. There is a reason why Hyundai has had to sell their cars for less and provide a more impressive warranty package than other auto manufacturers. Not to mention the value of top of mind. People prefer to purchase items whose names they are familiar with. There may be no difference in quality/performance between JimBob Televisions and Sony but JimBob will get killed because no one knows them.

Danny
Danny

Hi Jack, That's true - there is more than "just sales", but it all adds up to the sale. The storytelling; the relationships; the brand advocacy, etc. The same can be said for customer service; or tech support; of the trainers that go out to retailers and make the sales guys in-store the brand advocates. The end goal is still the same - you need to be bringing in money. And you could be the most awesome relationship builder and brand advocate in the world; but if you're costing me more than you bring in, then I have a simple decision to make: let you go or let my business go. I know which decision I'm going to make... ;-)

Danny @ Firepole Marketing
Danny @ Firepole Marketing

Amen, Danny. I think not nearly enough measuring and tracking gets done in business, especially in small business. It is absolutely vital that everybody contribute more value than they're costing, and while there are lots of different ways to measure that, the key for businesses is to find one that matters, and make sure it works!

Danny
Danny

Hey there Danny,

For sure, mate, and like you say, it doesn't matter what size the business is - if you're continuously putting more money out than you're bringing in, eventually you'll go out of business.

And who wants that? ;-)

Danny @ Firepole Marketing
Danny @ Firepole Marketing

Amen, Danny. I think not nearly enough measuring and tracking gets done in business, especially in small business. It is absolutely vital that everybody contribute more value than they're costing, and while there are lots of different ways to measure that, the key for businesses is to find one that matters, and make sure it works!

Danny
Danny

Hey there Danny, For sure, mate, and like you say, it doesn't matter what size the business is - if you're continuously putting more money out than you're bringing in, eventually you'll go out of business. And who wants that? ;-)

Howie at Sky Pulse Media
Howie at Sky Pulse Media

You hit something HUGE Danny. And Gary he can go flip himself.

The CEO, CFO, COO all have measures they are judged on when it comes to bonus pay and keeping their job. Everyone in manufacturing and sales and warehousing all have measures and are measured when it comes to how well they are doing.

Then comes CMO which says 'Trust me we are spending and marketing the right way'. CFO well prove it! CMO sorry I can't. CFO but we spent $50mil on Advertising what if this year we spend $35mil instead? CMO that scares me. CFO Why? CMO I think we will lose sales. Hold on. Let me get our AOR on the phone. AOR - if you decrease our billings by $15mil your sales will crash. CFO - Prove it? AOR/CMO we can't.

NOW even worse. Social Media is even more murky and even less measurable than Advertising and the overall Marketing. I have zero pity on the fools who say You can't measure this. Or You shouldn't think about ROI. Because that is arrogant and in my opinion the person should be fired.

NOW I am not saying it can be measured properly. But the attitude must be there because the CFO who's shirt is on the line if your budget item doesn't look like a payoff can't support the investment. If the CFO knows spending $100k on a direct sales person brings in $1mil and spending $100k on Social gives them a non-concrete return. Sorry Social go away and come back when you can prove yourself.

I have a Finance Degree and my view is always the CFO. I don't believe in branding unless it leads to sales. I don't believe Social moves needles for big companies or possibly ever will. And that is my position. Anyone who says I am wrong...Prove it!

Wow danny you have me riled before 9:30am. And BTW I believe in Social Media as a Revolution in Interpersonal Communication Technology...not as a revolution in Marketing. Was the Phone a revolution in Marketing? No. It really just created a telemarketing industry which was just a small part of B2C marketing. Social is like a Phone. It is a technology platform. Marketing forced its way just like telemarketers forced and annoyed us into that sphere. Just like spam mail invaded email. They were not asked to come by the people using the technology.

Danny
Danny

Man, I do love it when you go off on one, mate, because you bring such passion behind some solid points. :)

I definitely think social is far harder to scale at corporations than a small business. Is social media really going to make a huge difference at a Fortune 50 company in the same way it could at a mom and pop business?

I'm not convinced. I think social can be a great service platform, or extra promotional aspect, at organizations. But when you're already making $100 million a year in sales and social media brings in an extra $500k, while it's great it's not as influential as a small business making a million a year and they bring in an extra $100k.

And yes - we can talk all about relationships, having bigger ears and more, and there's absolutely nothing wrong with these approaches. But if there are no sales at the end of all that, then there won't be any relationships, or ears, or whatever.

Cheers as always, mate. :)

Howie at Sky Pulse Media
Howie at Sky Pulse Media

I have to believe a big chunk of the $50bil Facebook valuation is the feeling it will be a big massive sales driver for Fortune 50 companies. Because if not. Then aren't they more like a Social Version of EBay/Etsy?

I just think Brands, VC's, the platforms like Facebook forget the basis of their existence is communication like a phone or email. Not Marketing. Which was my point with John above.

BTW good job on getting me riled LOL

Howie at Sky Pulse Media
Howie at Sky Pulse Media

I have to believe a big chunk of the $50bil Facebook valuation is the feeling it will be a big massive sales driver for Fortune 50 companies. Because if not. Then aren't they more like a Social Version of EBay/Etsy?

I just think Brands, VC's, the platforms like Facebook forget the basis of their existence is communication like a phone or email. Not Marketing. Which was my point with John above.

BTW good job on getting me riled LOL

Howie at Sky Pulse Media
Howie at Sky Pulse Media

OH! But yes everything employee should be measured for ROI and even for Social Media Tasks some sort of agreement of goals can be set and then reached. Even if this isn't something with Sales directly related to it. So great post even if I went off LOL

Howie at Sky Pulse Media
Howie at Sky Pulse Media

You hit something HUGE Danny. And Gary he can go flip himself.

The CEO, CFO, COO all have measures they are judged on when it comes to bonus pay and keeping their job. Everyone in manufacturing and sales and warehousing all have measures and are measured when it comes to how well they are doing.

Then comes CMO which says 'Trust me we are spending and marketing the right way'. CFO well prove it! CMO sorry I can't. CFO but we spent $50mil on Advertising what if this year we spend $35mil instead? CMO that scares me. CFO Why? CMO I think we will lose sales. Hold on. Let me get our AOR on the phone. AOR - if you decrease our billings by $15mil your sales will crash. CFO - Prove it? AOR/CMO we can't.

NOW even worse. Social Media is even more murky and even less measurable than Advertising and the overall Marketing. I have zero pity on the fools who say You can't measure this. Or You shouldn't think about ROI. Because that is arrogant and in my opinion the person should be fired.

NOW I am not saying it can be measured properly. But the attitude must be there because the CFO who's shirt is on the line if your budget item doesn't look like a payoff can't support the investment. If the CFO knows spending $100k on a direct sales person brings in $1mil and spending $100k on Social gives them a non-concrete return. Sorry Social go away and come back when you can prove yourself.

I have a Finance Degree and my view is always the CFO. I don't believe in branding unless it leads to sales. I don't believe Social moves needles for big companies or possibly ever will. And that is my position. Anyone who says I am wrong...Prove it!

Wow danny you have me riled before 9:30am. And BTW I believe in Social Media as a Revolution in Interpersonal Communication Technology...not as a revolution in Marketing. Was the Phone a revolution in Marketing? No. It really just created a telemarketing industry which was just a small part of B2C marketing. Social is like a Phone. It is a technology platform. Marketing forced its way just like telemarketers forced and annoyed us into that sphere. Just like spam mail invaded email. They were not asked to come by the people using the technology.

Howie at Sky Pulse Media
Howie at Sky Pulse Media

You hit something HUGE Danny. And Gary he can go flip himself. The CEO, CFO, COO all have measures they are judged on when it comes to bonus pay and keeping their job. Everyone in manufacturing and sales and warehousing all have measures and are measured when it comes to how well they are doing. Then comes CMO which says 'Trust me we are spending and marketing the right way'. CFO well prove it! CMO sorry I can't. CFO but we spent $50mil on Advertising what if this year we spend $35mil instead? CMO that scares me. CFO Why? CMO I think we will lose sales. Hold on. Let me get our AOR on the phone. AOR - if you decrease our billings by $15mil your sales will crash. CFO - Prove it? AOR/CMO we can't. NOW even worse. Social Media is even more murky and even less measurable than Advertising and the overall Marketing. I have zero pity on the fools who say You can't measure this. Or You shouldn't think about ROI. Because that is arrogant and in my opinion the person should be fired. NOW I am not saying it can be measured properly. But the attitude must be there because the CFO who's shirt is on the line if your budget item doesn't look like a payoff can't support the investment. If the CFO knows spending $100k on a direct sales person brings in $1mil and spending $100k on Social gives them a non-concrete return. Sorry Social go away and come back when you can prove yourself. I have a Finance Degree and my view is always the CFO. I don't believe in branding unless it leads to sales. I don't believe Social moves needles for big companies or possibly ever will. And that is my position. Anyone who says I am wrong...Prove it! Wow danny you have me riled before 9:30am. And BTW I believe in Social Media as a Revolution in Interpersonal Communication Technology...not as a revolution in Marketing. Was the Phone a revolution in Marketing? No. It really just created a telemarketing industry which was just a small part of B2C marketing. Social is like a Phone. It is a technology platform. Marketing forced its way just like telemarketers forced and annoyed us into that sphere. Just like spam mail invaded email. They were not asked to come by the people using the technology.

Danny
Danny

Man, I do love it when you go off on one, mate, because you bring such passion behind some solid points. :) I definitely think social is far harder to scale at corporations than a small business. Is social media really going to make a huge difference at a Fortune 50 company in the same way it could at a mom and pop business? I'm not convinced. I think social can be a great service platform, or extra promotional aspect, at organizations. But when you're already making $100 million a year in sales and social media brings in an extra $500k, while it's great it's not as influential as a small business making a million a year and they bring in an extra $100k. And yes - we can talk all about relationships, having bigger ears and more, and there's absolutely nothing wrong with these approaches. But if there are no sales at the end of all that, then there won't be any relationships, or ears, or whatever. Cheers as always, mate. :)

Howie at Sky Pulse Media
Howie at Sky Pulse Media

I have to believe a big chunk of the $50bil Facebook valuation is the feeling it will be a big massive sales driver for Fortune 50 companies. Because if not. Then aren't they more like a Social Version of EBay/Etsy? I just think Brands, VC's, the platforms like Facebook forget the basis of their existence is communication like a phone or email. Not Marketing. Which was my point with John above. BTW good job on getting me riled LOL

Howie at Sky Pulse Media
Howie at Sky Pulse Media

OH! But yes everything employee should be measured for ROI and even for Social Media Tasks some sort of agreement of goals can be set and then reached. Even if this isn't something with Sales directly related to it. So great post even if I went off LOL

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  4. [...] say all this because lately I’ve been seeing a lot of talk about ROI and the effectiveness of Social Media advertising. So here is my 2 cents on the effectiveness of [...]

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  6. [...] The ROI of Employees originally appeared on Danny Brown | Social Media Marketing Blog – The Human Side of Media and the Social Side of Marketing under a Creative Commons license. [...]

  7. [...] Employing people is a huge investment. You owe it to everyone involved to get a good return. But there’s another, equally good reason. [...]