Why Social and Selling Don’t Mix….Another Nail in the Coffin for the Question of ROI in Social Media.

You can't sell to people when they're socializing.

The news this week reported on Bloomberg.com doesn’t exactly help provide the answer businesses were looking for, in respect to the question: “What is the true ROI of social media?”
Bloomberg reported the following:

“Last April, Gamestop opened a store on Facebook in an attempt to generate sales from their growing fanbase of 3.5 million-plus customers who’d declared themselves “fans” of the video game retailer. Less than 6 months later, the store has been quietly closed. 
Over the past year, Gap Inc., J.C. Penney and Nordstrom have all opened and closed storefronts on Facebook Inc.’s social networking site.
Facebook, which just this month filed for its IPO, was tipped to be a top shopping destination for its 845 million+ members. The stores’ quick failure shows that the social network doesn’t drive commerce and casts doubt on its value for retailers.”

So the upshot of it all is that you can’t sell to people when they’re socializing. When you put it like that, it’s hard to understand why businesses are so hung-up on trying to assign a $-value to their online social efforts. It probably needs to be pointed out (although it shouldn’t have to be) is that there is a huge difference between "the internet" and "social media."  That difference is the word "social".

I’d apply the same logic from this story as to why Facebook will have an extremely difficult time putting together an email service to rival Gmail. Prove me wrong Zuck’s, but I just don’t think people want to mix business with pleasure; and have the feeling that their boss is breathing down their neck 24 hours a day, 7 days a week.

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop.” said Sucharita Mulpuru, an analyst at Forrester Research. “But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

I love the above quote so much that I gave it the underline, highlight AND bold treatment. It sums up everything perfectly!

I do have to say that I was ecstatic when I read the Bloomberg story, but I also don’t want to insist there is no measurable ROI in online marketing through social channels. The key is to understand the intangible value of engaging with your customers, but it’s still next-to-impossible to assign a value to engagement. The way that I always like to explain it is as follows:

What’s the return on investment of opening the door for your wife or girlfriend? Quite simply, there is no immediate tangible ROI, at least not one that can be measured in $’s. Instead, what you ARE achieving is the strengthening of your personal brand integrity, and the long-term benefits of that will always far outweigh the perceived perks of  a “quick sale”. The sooner that businesses understand that the better!


  • February 19, 2012

    Keith Wyrick

    A couple of years ago, I had a job that involved blogging about the benefits of social media as a marketing tool. I was not good very good at the job because I could not identify with the company’s mission, for reasons that are well-stated here. The irony is you would probably actually be pretty good at the job. I would be glad to put in a good word for you if you’re interested.

  • February 22, 2012

    Cote, LLC

    Well, this may be true for some brands and companies, but certainly not all. We need to drill it down even further and distinguish between “hard” selling and “soft” selling via social media networks. The former almost never works and is something we shy away from for our clients. The latter most certainly does work and we’ve opened up a new revenue stream for every single one of our clients via social networking. We can prove this by following consumer migration from the networks to the website to the checkout line. Where there was no commerce before we took over, now there is a steady stream of purchases coming directly from FB and Twitter (among others)

    So, good article but it’s incomplete. 

  • February 22, 2012

    Kris Chislett

    Cheers for reading.
    I could elaborate further in this comment, but I’ll save it for a follow-up post.
    You are very correct though, the article is extremely incomplete (and I knew that it would be when I was writing it). I have a strong passion for proving the value of social media to businesses, so-much-so that I could probably knock-out a 10,000 article giving my thoughts on the subject. However, this website takes its primary focus on wine, and I’m very cognizant of the problems with writing on topics “off subject”. That’s generally not what people come here for, but it does give me a good forum to vent.

    Thanks again for taking the time to comment.

  • February 22, 2012

    Cote, LLC

    No problem, like we said it tackles an important issue. Several clients of ours are “in the industry” which is how we found this post. We certainly understand the “off-topicness” issue, which is another one on which you and we could do 10,000 words. 

    For us, it’s not a “belief” anymore but a demonstrable fact that we drive real revenue. SMM isn’t competing on the same level as traditional e-commerce…yet, but it’s on the rise! 

    Thanks for the reply. 

  • February 25, 2012

    Kris Chislett

    Thanks Keith. Can you send me the info: kris@blogyourwine.com

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