Insurance in Plain English

Reaching the next generation of insurance consumers

ROI: Ridiculous, obsolete idea?

with 13 comments

Shame on me. It’s been a week. I blame a lot of things, not the least of which was the shock associated with the LOST series finale.

This interview of Ryan Hanley (a fellow resident of beautiful Albany), conducted by Peter van Aartrijk and Rick Morgan, got me thinking about one of the topics du jour in social media, the search for return on investment.

According to Ryan,

Everyone says, well, what’s your ROI? At this point in the social media movement, to try to slap ROI on it and make a business decision is going to be tough to do. Because it’s hard to calculate.

Don’t I know it! How can I provide quantified, tangible results explaining how valuable my organization’s Twitter accounts are? How can I create a correlation between our LinkedIn groups and sales? How do I explain that no, I’m not just fooling around on the ‘net, I’m actually building relationships? It’s not easy. Heck, it’s pretty close to impossible.

Well, all this talk about ROI made me nostalgic. For the past six months, I’ve been immersed in my (finally completed) master’s thesis, AKA the bane of my existence, which focused on measurement in an area equally as intangible as social media, public relations. Think about it: How do you measure reputation? How do you measure client perception?  Same issue.

A bit of self-plagiarism, and the complication of measurement is clear,

With sales, one can measure end-of-year figures against a set of objectives at the beginning of the year. But public relations is much more nebulous; how can you measure the goal of increased visibility and awareness? How can you track all the instances that a consumer recalled your brand as a result of some positive press he or she read in the local newspaper? Such black-and-white, A-to-B type measurement is not just impractical, but also, nearly impossible to conduct in this field.

While my very own words seem to echo the advice of those who say we need to look past ROI, I don’t completely agree. Measurement is still important.  It helps to determine if our efforts were effective and to decide which strategies to keep, which to trash. It makes us more reflective, and, ultimately, better practitioners. As one scholar put it, “You can only manage what you measure.” But, I do think that today’s measurement techniques need to be different than what we’ve relied on in the past.

So what do you think? Is the concept of ROI in public relations and social media as outdated as the betamax?

Coming soon … well, smarty pants, how DO we measure reputation? Stay tuned …

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Written by melissa

May 27, 2010 at 3:31 pm

13 Responses

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  1. I think I’m with you Melissa. I’m not convinced that ROI is completely off the table yet. There’s no denying that measuring influence isn’t something you’ll find in your quickbooks log but, it def has its effects. I think that when you are talking about ROI on social media and even blog exposure, sure you can see the bounce and conversion rates, but it’s more about how important relationship building is to your brand. I think there is tremendous value in spending the time and interacting with a community but that’s my subjective approach from the interpersonal consulting practice that I run.

    Nunzio Bruno

    May 27, 2010 at 4:43 pm

    • Exactly- you can look at numbers all you want, but how exactly can you measure the impact on a potential client’s perception? Not an easy job!

      melissa

      May 28, 2010 at 8:14 am

      • Haha no not an easy job at all! But that’s why I’m going to come to you for that stuff..I mean you only showed us bits of your Master’s Thesis and I was impressed :)

        Nunzio Bruno

        May 28, 2010 at 7:31 pm

  2. Melissa, first, thanks for the shout out!

    Second, I completely agree with you that ROI is important. What I was trying to say in that sound bite was that deciding whether or not you should be participating in Social Media should not be an ROI driven decision. Because the results are not real-time, monotizable, and in most cases even tangible.

    I don’t think that you can place traditional ROI on Social Media. Instead I think your goals should be Community Building, Interaction, and Conversion…

    Thanks and Great Article!

    Ryan H.

    Ryan Hanley

    May 27, 2010 at 5:31 pm

    • Totally agree with you Ryan- you can’t make a decision on social media based on traditional ROI, it just won’t happen that way. We need to come up with a way to “measure” or at least track engagement, so we can see if our work is effective. Is it number of followers? Subscribers to our blogs? Views per day? I’m not sure… but I do know that it’s something that all of us in this space are going to be trying to figure out for a while to come.

      melissa

      May 28, 2010 at 8:16 am

  3. I love this topic and many thanks for your blog. As for ROI, there are definite ways to measure your sales success using social media. The most simple would be tracking your contacts in an excel spreadsheet. Create a line for every new contact you make and if at any point you are able to bind coverage for that person, note it on their line. If that person gives you a referral, note that as well. It can absolutely be tracked. I have an Agent Friend in California who has had considerable success marketing on Facebook and he’s been able to show real dollar figures for it. The idea of being able to reach people through Social Media is so exciting to me. However what I know from my experience is that you have to be able to show the ROI to the guys who are signing your paycheck.

    Meghan McGarry, ACSR

    May 27, 2010 at 7:04 pm

    • Meghan,

      Your idea for ROI tracking is great. Thanks for that!

      Who is the Agent in Cali? I would like to contact him…

      Ryan H.

      Ryan Hanley

      May 28, 2010 at 7:24 am

      • Hi Ryan,

        His name is Rick Dinger and he owns Crescenta Valley Insurance in Glendale CA. I’ll introduce you to him when we are in San Francisco and the National Leadership Institute. He’s a former Young Agents Committee Member and a really great guy.

        Meghan McGarry, ACSR

        May 28, 2010 at 7:29 am

  4. Melissa-great comments. I’ve just started getting into social media. I started insurance 31 years ago. It seems to me that we are trying to connect, it’s all about relationships. trying to figure who is in it for me and who is in it for their own pocketbook at my expense. So from that standpoint, things have not changed. We’re just “talking” to each other differently. In business and life, you have to meet people we’re they are at. And right now they are on FB and the cell. But they still need to know you really car about them. And Insurance is all about being there for your clients. Especially on a BAD day. ROI will be taken care of if you take care of people. When you analyze ROI too much, people get the short end. Just my take. Can’t wait for the next text. Maybe see you on FB.

    John

    May 27, 2010 at 7:38 pm

    • I echoed this sentiment in another post- nothing’s really changed with social media, we’re just communicating differently. It’s not different than rubbing elbows at a networking event or getting involved in your local community. Same concept, new medium. I look forward to seeing you dive right in to social media!

      melissa

      May 28, 2010 at 8:18 am

  5. Good knowledge Melissa.

    Meghan hits a good point. ROI will always be relevant as long as the social media/PR practitioners are NOT the bosses. I equate ROI with metrics, while the conversations, relationships and networking are the unmeasurable but most important returns.

    Metrics can be as simple as tracking twitter followers and blog traffic on a monthly basis or as complex as chronologically graphing sales alongside an ongoing social media or PR campaign to see when referral traffic and conversions were highest and planning accordingly. Whatever the boss needs to see or hear to understand his investment in YOU is worthwhile.

    If you’re good at strategic social media, there’s no sense spending a lot of time measuring when you can be doing, but there comes a time when we all need to prove our value. One of my favorite new ROI terms is “social capital,” a foundation of web content that grows with a business. You and my fellow commentors just created some.

    Good luck on the Masters thesis.

    Nick

    NIck Brown

    May 27, 2010 at 9:01 pm

    • Thanks Nick! Until PR folk rule the world (I can dream, right?), we’ll be constantly justifying our existence. Same goes for social media practitioners who (surprise!) are often the same people.

      melissa

      May 28, 2010 at 8:22 am

  6. [...] are a vital aspect to a successful web and social media presence. Understanding your company’s metrics will keep you informed of what works and what doesn’t. There are several programs for social [...]


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