Every once in a while I face off a CEO or business owner who has come to me to challenge the adage social media can improve a business’ profitability. Since most of them are near my age they see me as someone sympathetic to the way they reason and can be easily push into agreeing with them that the new ways of marketing a business with social media is a fad. They figure I will go along with their thinking that them jumping head over heels into using social media will result in them spending tens of thousands of dollars to get the same thing that spending less on something more traditional will generate. I hear from them say , ‘these kids today are crazy if they think I am going to fall for the fads they create to make money off my business.’
Naturally I do not agree with them totally and have found through actually using social networking as a business tool that if social media is done correctly it can be much more effective than other more traditional methods. The key here is..using social media correctly..most business who think they are using social media do not have a clue and are in fact wasting a lot of time and money.
My discussions of social media with these executives usually leads me to discover more on why many business executives who manage old school businesses think the way they do.
Why CEO’s Think the Way They Do
Many companies who have stockholders or investors thrive on producing conservative measures. They deal with people who invested a dollar into the business and feel because they watched the movie Wall Street they should be able to parlay that invested dollar into making millions. This causes these types of investors to scrutinized ever expenditure a public company makes. The bottomline is, they do not like having their money put at risk.
This places the CEO’s of these companies in a position of making decisions on any change that does not go abide by a conservative spending method. Introducing to their stockholders anything method of doing business outside the usual ways that have been making investors bunches of money could result in the investors pulling their money out of that business. So, no new processes get added to the mix of processes that move the company on towards a successful track record.
This thinking puts Social Media and Social Networking on the questionable value list and seldom are recognized my these conservative companies as worth taking the risk to try. Many of these companies’ CEO are still bleeding heavily from the slashing they took from investors who lost billions in the crash of 2008. This is why many of these executives appear to be out of touch with what is going on today in the business world.
The Need for a ROI is Real
There is a reason the term ROI is used so much by these business leaders. They have to justify every dollar they put at risk of losing and have to produce a high level of return on each dollar spent. This attitude produces them to think that anything touching the internet has a huge probability of not being profitable since none of the numbers being published on the size of some social networks can be validated like old school traditional methods. This reality of unverifiable statistics will always be the weakness of the claims on the internet value of being the way to profits for all businesses.
These seeming out of touch business executives really do see what is going on with the internet and understand that its possible value. However until there is verifiable proof of the absurdly large number of people claiming to be a member of a social networking these sites will never be seen by most old school businesses as worth taking the risk .
To these men and women who control the purse strings to trillions of dollars there is a need for validation of the risk they are going to take with their stockholder’s money. So, when they ask what the ROI is on them setting up a marketing campaign using social media they are not displaying their ignorance or appearing to be completely out of touch. They actually are asking a real question that has to have a real answer for which many of the PR firms who are claiming to have expertise in social media are not convening them by producing high quality reports showing statistics that can not be verified as being true.
Validation of Statistics is Mandatory
There are many positive things happening out here in the fascinating world these executives call La-La-Land. However before methods like Social Media are readily adapted my the entire business community more realities and proof that things are as they seem online will need to be produced. The need for an ROI is real for all businesses and the people asking for the ROI should not be shrugged off as someone out of touch. This kind of reaction from businesses who are blindly believing the stats produced by computer tracking programs are causing more distrust that trustworthiness in the field of social media. All these large business executives are asking is for someone to do due diligence, get out on the street and validate the figures that computers are randomly generating. In a statement made by one of these CEO’s is the real message to the problem they see with the social networks…’if Facebook truly wants me to believe they have 500 million members they are going to have to produce something that validates the number more then just saying they have that many members’.
In today’s world of business finding the answer to their question really is not too much to ask. Is it?
Let me know how I can help.
