Is ROI Input, Process Or Output?

It seems that online and off line conversations are consumed with measuring the ROI from social media. Much of the dialog is a waste of time and focused on the wrong thing. Yet organizations seem to be demanding a measure of ROI from this thing we all call social media.

All businesses represent a system of inputs, processes and outputs. Most businesses measure output, or results and said measures are purely financial results. The irony is that results do not tell you what may be wrong with the process or the inputs into a process. Results just tell you what you've produced as a result of the inputs and processes you've used. Social media does produce results but all those results can tell you is whether your inputs and processes were operating effectively. To change the result you must focus on both the inputs and the processes. But who measures those? Not many if any.

A Problem With Thinking About ROI

If you use existing social media metrics most of them will tell you about the reach of your message and its popularity with the market of followers. Reach and popularity may not be the right measure of effectiveness and efficiency. Getting reach is easy thanks to the power of social technology. Popularity only equates to well being popular. The question is are you popular with the right audience whom has an interest in your conversations or an interest in a relationship. Relationships beget opportunities for a transaction if the basis of a conversation has an affinity to the markets needs and wants. Getting lots of followers, connections and massive reach could create results that are meaningless. Yet many organizations measure these results (outputs) and use them to justify their presence, their efforts and the time and money spent doing so. It is a lot like the days of measuring advertising and marketing effectiveness which was justified by a 3% or less response.

So How Do You Measure ROI?

If you understand systemic thinking you know that all results are produced by the quality of your input and related processes. For social media the input is reflected by your thinking. The process is distribution of communications. Fundamentally it is that simply and should be looked at simply. On the other hand the input is what you communicate to whom, where, when, how and why. Now those elements of social media aren't so simple and if they were everyone would be applying the thinking behind each element and creating massive ROI, which they are not.

The questions of what,where, when, how and why are deep and wide and require critical thinking. Critical thinking is purposeful and reflective judgment about what to believe or what to do[1] in response to observations, experience, verbal or written expressions, or arguments. Critical thinking might involve determining the meaning and significance of what is observed or expressed. It seems that today most organizations are chasing social media ROI without even considering whether there is adequate justification to accept the conclusion as true. Subsequently everyone is consumed with measuring the results without thinking through the inputs and processes that produce results that can go beyond your expectations.

Unless you think critically about the ROI from social media your thinking is not likely to produce any results. Thinking is the input, communications is the process and well the results reflect the quality of your thinking. The quality of your thinking is reflected by what you know or don't know.

The web requires a new knowledge domain that most businesses do not have. Knowledge about what? If people are looking for solutions will they find you? When they find you will your web site reflect conversations that enhance relationship? Does your content engage and provide value? The market will decide that is less then ten seconds. Get it?

What say you?