The debate over ROI inspired certain brands to cannonball into popular social networks to join the proverbial conversation without a plan or strategic objectives defined. At the same time, the lack of ROI standards and established authorities, unnerved many executives, preventing any form of experimentation until their questions and concerns were addressed.

But that was then and this is now.

In 2010, we enter in to a new era of social media marketing, one based on information, rationalization, and resolve.

Business leaders simply need clarity in a time of abundant options and scarcity of experience and answers. As many of us can attest, we report to executives who have no desire to measure intangible credos rooted in transparency and authenticity. In the end, they simply want to calculate the return on investment and associate Social Media programs with real world business performance metrics.

Over the years, we explored ideas, driven by a passionate desire to find new meaning and vindication in uncharted domains. These discussions and the innovation they sparked, redefined the framework for traditional metrics, creating hybrids that would and will prove critical to modernize business practices, improve products and services, and effectively compete for the future.

ROI: The Return on Ignorance

Where the “I” in ROI represents return on investment, marketers have also explored ancillary elements to address the socialization of media, marketing, and the resulting dynamics of engagement.

Adaptations included:

Return on engagement – the duration of time spent either in conversation or interacting with social objects, and in turn, what transpired that’s worthy of measurement.

Return on participation – the metric tied to measuring and valuing the time spent participating in social media through conversations or the creation of, social objects.

Return on involvement – similar to participation, marketers explored touchpoints for documenting states of interaction and tying metrics and potential return of each.

Return on attention – In the attention economy, we assess the means to seize attention, hold it and as such measure the responses activities that we engender.

Return on trust – A variant on measuring customer loyalty and the likelihood for referrals, a trust barometer establishes the state of trust earned in social media engagement and the prospect of generating advocacy and how it impacts future business.

But as we learn through experience, our views and techniques mature into more sophisticated strategies as we progress through the Ten Stages of Social Media Evolution.

For many businesses, the case for new metrics cannot arise until we have an intrinsic understanding of how social media engagement affects us at every level. To be quite honest, it is not as simple as counting an increase of subscribers, followers, fans, conversation volume, reach, and traffic. While the size of the corporate social graph is a reflection of our participation behavior, it is not symbolic of brand stature, resonance, loyalty, advocacy, nor is it an indicator for business performance.

ROI: Return on Investment

Sometimes we simply need ROI to signify a meaningful return on investment.

In 2010, Social Media endeavors are still funded as pilot programs to steer the brand towards perceived relevance in the hopes that they demonstrate momentum and as such, rewards materialize. Budgets are for the most part, borrowed from other divisions to fund the teams and programs lead by the internal champions who effectively make the case for experimentation. Where that money goes and from where it’s borrowed varies by department and by company usually tied to where champions reside internally today.

In many cases however, new programs are introduced without an integrated strategy. Money is allocated from existing programs, and if we’re going to take away from something, we should therefore determine whether or not we’re justified in doing so.

According to a 2009 study performed by Mzinga and Babson Executive Education, 84 percent of professionals representing a variety of industries reported that they do not measure ROI.

Source: eMarketer

In 2010, executives are demanding scrutiny, evaluation, and interpretation. Even though new media is transforming organizations from the inside out, what is constant nevertheless, is the need to apply performance indicators to our work.

The Business of Social Media

The CFO, CEO, and CMO of any organization would be remiss if they did not account for spending and resource allocation, regardless of the allure and seduction of social media.

MarketingProfs recently published a study performed by Bazaarvoice and the CMO Club that revealed the true expectation of chief marketing officers. Bottom line, they want measurable results from social media.

Elusiveness continues to prevail however. The study found that the exact impact of social media tactics evade the grasp of CMOs.

- 53% are unsure about their return on Twitter

-50% are unable to assess the value of LinkedIn or industry blogs

More specifically however, roughly 15% believe there is no ROI associated with Twitter and just over 10% cannot glean ROI from LinkedIn or Facebook.

I believe this is the direct result of not tying activity to an end game, the ability to know what it is we want to measure before we engage. Doing so, allows us to define a strategy and a tactical plan to support activity that helps us reach our goals and objectives.

We first answer,

What is it we want to change, improve, accomplish, incite, etc.?

Doing so will allow us to establish goals and objectives that specifically tie activity to:

- Sales

- Registrations

- Referrals

- Links (the currency of the social web)

- Votes

- Reduction in costs and processes

- Decrease in customer issues

- Lead generation

- Conversion

- Reduced sale cycles

- Inbound activity

Customer Insight

Among the responses received from CMOs, customer ratings and reviews rose to the top of marketing activities that deliver tangible ROI insight. In 2009, 80% of respondents reported that customer stories and product suggestions shape products and services. As a result, brands earn the trust and loyalty of their customers for listening and responding – as long as they are made aware of their role and rewarded for it.

In 2010, CMOs will review opportunities for user-generated content sources to involve customers and advocates with many reporting…

- a 400% increase in use of Twitter comments to inform decisions about products and services

- a 59% increase in the use of customer ratings and reviews

- A 24% increase in use of social media for pre-sales Q&A

The Socialization of Monetization

Social media metrics will increasingly tie to revenue in 2010. To what extent seems to vary according to CMOs.

- 80% predict upwards of 5%

- 15% optimistically hope for 5-10%

In 2009, those companies that aligned social media investments with revenue estimate:

- 5% or less revenue tied to social in 2009 foresee an increase of an additional 5% in 2010

- 6-10% of revenue stemming from social is expected to increase more than 10%

- Those with greater revenues resulting from social engagement expect an escalation of revenue derived from social at 20%

Companies such as Dell are not only tracking the impact of Social Media on revenue, but expanding lessons learned across the entire organization. According to Dell’s Lionel Menchaca:

Our @DellOutlet is now close to 1.5 million followers on Twitter, and back in June we indicated that @DellOutlet earned $3 million in revenue from Twitter. Today it’s not just Dell Outlet having success connecting with customers on Twitter. In total, Dell’s global reach on Twitter has resulted in more than $6.5 million in revenue. In fact our Brazilian and Canadian accounts are growing rapidly too – and it was Canadian tweeters who asked to make sure Dell Canada came online to Twitter. Dell Canada responded because the team heard our customers. In less than a year, @DellnoBrasil has already generated nearly $800,000 in product revenues. Similarly, @DellHomeSalesCA has surpassed $150,000 and is increasing at notable pace.

The Forecast for Metrics in 2010

Earlier we mentioned generic forms of Social Media metrics. The survey revealed that indeed, many CMOs, 89%, tracked the impact of social media by traffic, pageviews, and the size of their social graph or communities. However, 2010 is the year that social media graduates from experimentation to strategic implementation with direct ties to specific measurable performance indicators.

In 2010, CMOs will seek to establish a connection between social media and P&L business goals. The study documents the adoption of three metrics:

- 333% surge in tracking revenue

- 174% escalation in monitoring conversion

- 150% increase in measuring average order value

A Call To Action

Among the most effective forms of any marketing initiative is the integration of a call to action. It is how I define influence as it gives us the ability to inspire activity and measure it – as designed. As stated earlier, revenue is only one form of metrics we can introduce, but defining the “R” in ROI is where we need to focus as it relates to our business goals and performance indicators specifically. Even though much of social media is free, we do know the cost of engagement as it relates to employees, time, equipment, and opportunity cost (what they’re not focusing on or accomplishing while engaging in social media). Tying those costs to the results will reveal a formula for assessing the “I” as investment.

When we truly grasp the ability to define action and measure it, we can expand the impact of new media beyond the P&L. We can adapt business processes, inspire ingenuity, and more effectively compete for the future.

Here are seven reasons every business needs to be on Twitter.

To Interact with Customers

For most business, it’s far easier and more profitable to generate continued or new business from existing customers than it is to acquire new ones. Growing existing customer business requires ongoing communication. Staying in touch with customers on Twitter is not only more real-time than many other techniques, it’s also far more cost-effective than direct mail, attending trade shows, picking up the phone, or even maintaining a customer newsletter. It’s not that Twitter can replace other touchpoints completely of course, but it can reduce the required cost and frequency of high-touch interactions.

To Interact with Prospects

Just as many of your customers are probably on Twitter, so are your prospects. They care far less about your advertising than about what your customers are saying about you, and how you respond. An active Twitter presence enables you to demonstrate strong customer service, rather than just claiming you offer it (after all, who advertises poor customer service?).

To Influence the Influencers

Industry analysts, journalists, bloggers and other influencers from most sectors of the economy are well-represented on Twitter. Tweeting content of your own that will interest them (i.e. not just your marketing materials), retweeting content they post, and engaging in dialog is a great way to get these people talking, and writing, about your company. It’s less formal, more “social” and usually more effective than “cold” outreach.

To Gain Market Intelligence

The fact that customers, prospects and industry thought leaders are all using Twitter make it a valuable tool for monitoring the topics and concerns being discussed. This is a great potential source of new product/service enhancement ideas as well as topics for blog posts, white papers or other content.

To Become a Resource

Prospects don’t care about your products or services—they care about solving their problems. Demonstrating your knowledge of their industry and their challenges, for example by tweeting your thought-leadership blog posts and white papers, makes you a resource they can go to for helpful information. That gives you the opportunity to explain how your products or services can help them, in a consultative fashion.

To Give the Business a Personality

Business websites are, necessarily, one-to-many communication. No matter how compellingly your site presents your value proposition, it’s still formal and impersonal. Twitter is a much more casual and conversational. Again using the example of Zappos, CEO Tony Hsieh has been successful on Twitter by sharing his personality. Unlike a company website, Twitter is immediate, informal and personal.

To Be Part of the Conversation

As noted above, your customers, prospects and key influencers are already having conversations about your industry, your competition—and quite possibly your company—on Twitter. If you aren’t participating in that conversion, you’re missing valuable intelligence, business opportunities, and possibly even the opportunity to prevent damage to your firm’s reputation.

Twitter is far more than a 140-character soapbox for celebrities, spammy “Internet marketers” and the incorrigibly obnoxious. Savvy business tweeters can filter out the cacophony and create valuable dialogs with key participants in their marketplace.

This is what I have been talking about!  This is why businesses need to get involved with social media.  They have to be able to respond.

I read a rather interesting article in Forbes, where a famous person posted about her problems with maytag on twitter and her blog and as a result got Maytag to fix the washer that they originally weren’t going to fix. What this situation and others like it continues to demonstrate is that any person who has a sufficient number of followers will also have corresponding social influence with those followers.

Some people would argue that social media empowers customers in general and I do agree with that notion, when it comes to being able to do research and get opinions from your network, but I also find that the social influence a person has is dictate in large part by how many followers a person has. If I complain about maytag on several social media sites, I might get a response, but if someone has a one million followers, as this person evidently did, then she will definitely get a response, because what she says will motivate action in many more people.

The fact is that while social media can empower consumers and allow them to share information about companies, and complain about those companies, the influence to get a company to respond has to be large enough to actually get that company to take notice. The only time that really differs is if a company is actively proactive in social media and makes a point to respond to issues as they arise instead of waiting for someone influential enough to come along and stir up a lot of people.

It may seem rather cynical to note that only people who have lots of followers get the kind of response that the person in the article received, but in similar cases, when a company has been prompted to respond it has occurred because the person complaining has lots of followers and has issued a call to action that has started to impact a company.

So are customers really empowered by social media? In the sense that they can do research and get information from other people they are, but in terms of complaining, unless you can find someone who has sufficient influence with a lot of other people, its fair to say that a customer continues to have the average amount of influence on companies, which is to say very little. Your best way to change that is to accrue followers and develop enough of a relationship and reputation with them so that they will act when you complain.

If your product sucks and knowbody wants it…

If you want to see your investment in social media show a profit the day you put it up………

If you want to run the program on the cheap, and …

If you hire people that have no clue about how to set-up and manage a social media program……

…then you probably want to avoid getting involved in social media because you will not be in business for long anyway………….

1. Together we’re better
Twitter can be like a virtual staffroom where teachers can access in seconds a stream of links, ideas, opinions, and resources from a hand-picked selection of global professionals.

2. Global or local: you choose
With Twitter, educators can actively compare what’s happening in their with others on different continents. GPS-enabled devices and advanced web search facility allow searches that tell you what people are tweeting within a certain distance of a location, so if the other side of the world isn’t your bag, you can stick with your own patch.

3. Self-awareness and reflective practice
Excellent teachers reflect on what they are doing in their schools and look at what is going well in order to maintain and develop it, and what needs improvement in order to make it better. Teachers on Twitter share these reflections and both support and challenge each other.

4. Ideas workshop and sounding board
Twitter is a great medium for sharing ideas and getting instant feedback. You can gather a range of opinions and constructive criticism within minutes, which can help enormously, whether you are planning a learning experience, writing a policy, or putting a job application together.

5. Newsroom and innovation showcase
Twitter helps you stay up-to-date on news and current affairs, as well as on the latest developments in areas of interest like school leadership and technology.

6. Professional development and critical friends
One of the best things about training days is the break-out time between sessions, when teachers can get together to talk about what they are working on or struggling with. Twitter enables users to have that kind of powerful networking capacity with them all the time. It’s just a matter of finding the right people to follow.

7. Quality-assured searching
Trust the people you follow. Hone and develop the list of people whose insights you value. Once your Twitter network grows past a critical mass, you can ask them detailed questions and get higher-quality information back than a Google search would generally provide.

8. Communicate, communicate, communicate
Expressing yourself in 140 characters is a great discipline. You can become better at saying what needs to be said in my professional communications with less waffle and padding (even without txtspk).

9. Getting with the times has never been so easy!
Twitter is anything but complicated! You simply visit Twitter.com and create your account. A little light searching using key words for your areas of interest will soon yield a list of interesting people to follow. There are plenty of Web sites offering advice on getting started and how to avoid a few common beginners’ faux-pas. Your biggest challenge is likely to be getting the twitter.com unblocked on your school network if your main usage will be at school.