by Gunjan Trivedi

Social Relationships, Social Returns

Apr 15, 20134 mins
AnalyticsBusinessCollaboration Software

Calculating the ROI of social media business is tricky for most enterprises. Knowing what to track can be a good start.  

Gunjan Trivedi is executive editor at IDG Media.

We tend to react differently when it comes to being social at an enterprise-level.

“Man is by nature a social animal. Anyone who either cannot lead the common life or is so self-sufficient as not to need to, and therefore does not partake of society, is either a beast or a god.” — Aristotle (Politics, I)

Aristotle knew nothing about social media. But his description of human nature echoes resoundingly across time, especially today, with our age’s obsession with being social, proven by the fact that the number of channels that allow humans to go social and interact have quadrupled many times over. 

However, this holds water only when we consider ‘man’ in an individual capacity. We tend to react differently when it comes to being social at an enterprise-level. This natural inclination to being social seems to lose its favor en route, and skeptics take over. 

At the enterprise level, any conversation related to social media tends to face two impediments. On the one hand, social media is seen, largely, as a way of merely extending a company’s brand platform. (This is put together by IT for the marketing department.) And, nothing more. And on the other hand, access to social media by employees is generally considered a distraction. 

The Economist Intelligence Unit Survey of 2012 demonstrates that over 40 percent of business respondents feel that it’s the marketing, branding and communications departments that are primarily responsible for social business. Only 17 percent have this responsibility well distributed throughout the organization. 

And there lies the problem. These reactions to social media, I sense, are closely related to mindset and perception, and the fact that the use of social media for customer engagement is generally inhibited by the challenge of measuring tangible ROI, which by the way, is still difficult to show. 

Author of several books on the subject, such as, Secrets of Social Media Marketing, Paul Gillin suggests some ways out in his presentation, Measuring Social ROI: The CIO’s Role. He says few companies are measuring results with any level of precision. Gillin states that CIOs need to help enforce disciplined approaches to website analytics, synchronizing metrics to capture and track leads and building 360-degree views of the customer. 

According to Gillin, when companies track hits, traffic, unique visitors, likes, and followers, they are actually measuring activity—not engagement. Rather, the terms of engagement should be watched, and these include shares, repeat visits, downloads, subscriptions, reviews, ratings, lead forms, phone calls, and more. 

“The transparent world created by social media gives companies opportunities for growth, if they can move beyond mass marketing by building genuine relationships with their customers and reducing the cost of change by becoming more nimble,” says Chris Heuer, specialist leader-Social Business, Deloitte Digital. 

He goes on to say that monitoring flows of attention and information can help companies measure the value of social media investments, and building strong and reciprocal relationships may be the way to capture it.

Heuer’s report suggests that instead of focusing solely on increasing each transaction’s profitability, it is important for companies to strive for relationships with customers that are R.E.A.L.: Reciprocal, Empathetic, Authentic, and Long-lasting. Relationships based on these intrinsic values, and supported by systems of engagement that provide efficient and consistent communication and collaboration can provide better opportunities to increase profitability.

In my opinion, when it comes to going social, organizations shouldn’t invest in social media technologies and platforms just because their competitors are going that way. They should strive to move up the food chain. Instead of talking to customers to drive sales, they should use social media to have a dialogue with customers to create shared value. That’s where the correlation of engagement and measurable ROI begins. 


Gunjan Trivedi is executive editor at IDG Media. He is an award-winning writer with over a decade of experience in Indian IT. Before becoming a journalist, he had been a hands-on IT specialist, with expertise in setting up IP WANs. Reach him at