Balancing Between the Two ROI's

by Brett Greene on Wed, Mar 10th - 06:02pm
There are two ROI measurements to consider in any marketing campaign, especially online marketing campaigns: Return on Investment, which will always matter most because without profits you won't have a company for long, and Return on Influence, which is not measured nearly enough.
 
The second ROI is almost as important as the first ROI, because without great word of mouth advertising and repeat business, profits will still suffer.  When you measure both of these ROIs, your investments of time, energy and money will work harder for you in the short term, while laying a solid foundation for success in the long term.
 
Return on Influence may never be seen as important as Return on Investment by CEOs and shareholders, though it should be for anyone interested in the health of their business.  This ROI’s rewards are not as immediately apparent, though the ultimate impact on the strength of a business from Influence is quantifiable. There are some good models for early adopter successes of companies using their influence online.
 
My favorite story of turning Return on Influence into a Return on Investment comes from 
Dell.  After a blogger damaged Dell's reputation in 2005, Dell responded by having employees start blogging to shift customer opinions.  This action quickly turned around what was becoming a reputation for poor customer service.  Dell was one of the first companies to establish a presence on Facebook, which, in turn, provided Facebook credibility among businesses and deepened customer loyalty between customers and businesses sharing Facebook pages.  Dell was the also first company to effectively use Twitter to drive traffic to their outlet store through strategic “tweets” and resulted in$3mm in earnings the first year the outlet was in operation.  Now Dell employees aresharing their expertise through social media to help people understand new trends in technology, such as cloud computing.
 
Return on Influence is best generated through building your company's influence by combining two strategies effectively: The first is to engage customers and prospects directly through social media platforms; the second is to work with established Influencers who support your company or who like your products and are happy to act as a conduit for your business to reach their unique audiences, which may include other potential Influencers or promoters.
 
The direct results from these Influencer activities are reflected in multiple areas: Impact on how the public views your brand; higher quality of interest in and loyalty to your company; short- and long-term effects from
 
If you're tempted to place greater value on a short-term Return on Investment program versus a mid- to long-term Return on Influence program, consider these points:
 
The social web is evolving very quickly and those companies who harness the power of the Influencers will prevail;
Return on Influence requires less capital to implement (but more time investment), and;
 
For every second of work your company puts into building customer trust and influence, those efforts will continue to work for you 24 hours a day, 7 days into perpetuity.
 
While good outcomes from the first ROI may be necessary to keep the shareholders happy, the second ROI has the ability to lead to greater customer loyalty and word of mouth advertising – both of which surely enriches corporate stability, profitability and longevity. Influence is powerful.
This Blog Post Is Related To The Following ReFramer: 

Currency of Influence

-1votes
+
-

  • Definition: Currency of Influence

  • As a person’s level of influence grows his/her level of value to the audience/community becomes a new form of currency.

    Likewise, a Brand has many forms of currency that could be used by the Influencer in engagements with his/her community.

Editorial Policies:

Sign in or register to comment, or comment anonymously.
Warning: Anonymous messages are held for moderation. This could take a while or your comment may not be posted at all. Please consider creating an account and logging in. It's fast, free, and we don't spam.

Speech is free, but this website is moderated! Comments may be deleted. Please don't cuss or harass other commenters or post signatures, spam, astroturf and copypasta. Link to your website only on your profile page. Stay on topic. Thank you!

Filed Under: