I was recently chatting with Mark Sylvester, CEO of Intronetworks, when he said something that made me perk up quickly! Relationship Economics! The term came from a smart chap named David Nour who owns an organization called ReNetworks – The Art of Science & Relationships and wrote this book. To be honest- I think the terminology is brilliant. Apparently so does he- so much so he trademarked the term.

Over the past 5 months I have seen more companies trying to find the ROI of Social Media. In other words, how much is it going to cost and is Social Media worth the resources? The answer to that question is- let us look at the Economics of relationship building. What is the churn behind the efforts and what can I expect back? To most companies, they are looking at Social Media engagement as a cost center. Whereas if organizations look at Social Media as Relationship Investments, all of a sudden the Relationship Economics look much rosier because the org isn’t looking at Social Media as a traditional leads and sales driver. Instead, they are looking at it through a totally different set of spectacles, simply because the terminology set different expectations.

I once thought about going to school for psychology. To this day, I find the actions people take due to situations vary for each person and their life experiences. Yet, in other circumstance the human mind is very similar. When it comes to sales, the best sales people can sell because they are flexible enough to say the same thing differently to match what the target is looking to achieve. Find the need, fill the need! Sometimes it takes a change of terminology to “close the deal”. Same deal here! I have no doubt in my mind that presenting to decision makers the “Relationship Economics Of Social Media”  will make them far more open to looking at it as a new business angle,  NOT just clumping it into a traditional revenue generation conversation.

Ultimately the Relationship Economics of Social Media are:

1. Innovation (better products to the voice of the customer)
2. Business Intelligence
3. Competitive Intelligence
4. Brand Awareness
5. Brand Affinity
6. Productivity
7. Business Development
8. Lower Marketing Churn
9. Peer Customer Support (Lower Customer Service Costs)
10. Search Engine Optimization

The key to these relationship objectives are to set realistic benchmarks and achieve those goals. Then tracking and relating those goals as part of driving traditional ROI objectives (New Sales & Lead Generation) but not being the sole reason for them.

Thanks again to Mark Sylvester for being a source of fantastic conversations, insights, Tweets and giving his customers an amazing customer service experience. As for David from ReNetworks- I look forward to having a conversation with you one day soon!

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Having heard more and more horror stories from the last 10 months, I decided to get a sense how many companies really put on the breaks!

Mark Wallace recent did a event with us and spoke about how commonground & EDR looks at ROI. Instead of ROI and spoke about “Return On Interaction”. The more buzz the commonground generates within the Environmental Professional industry, the more users and ultimately more business opportunities for EDR. Its this line of thinking that led me to think further about ROI and the different acronyms I have been uncovering in my travels. So without further ado, here is the list:

ROI (Return On Innovation) – Stale products are the biggest fear of any organization. If the marketplace passes your organization buy0- you are exposed. Many companies I work with are using Social Media to tap their customers, peers and partners on the shoulder to help them innovate their product. Many minds are more valuable than few minds! Proven fact! Having many minds (with a vested interest in the product) offering collaborative and constructive feedback on the future of a product, makes too much sense and simply works!

ROE (Return On Education) – Learning Management Systems (LMS) are evolving to include the use of Social Media to allow for peer based education. As Wikipedia proves, the greater wisdom of the many can be a very powerful tool if harnessed and empowered correctly. Learn.com effectively uses the best of old LMS practices and combines the use of Social Media to allow users to lean in a setting they are most comfortable in. College graduates continue to find peer learning and feedback to be the most valuable and effective way to process and learn. While older demographics still like to take a traditional approach. Learn.com offers the best of both worlds. Think about your business now! Most businesses have a learning curve that cost marketing dollars. What if you could empower your current batch of users/customers to teach the next generation of users and customers.  Now, imaging taking both groups and empowering them to innovate future version of your brand?

ROC (Return On Customers) – Alumni and User Groups are evolving in Social Networking Communities. By dangling carrots of knowledge and value in the marketplace your current customers in your alumni groups/user groups can carry your brand message and value virally. This inspires sharing, word of mouth and ultimately new customers. The key to this avenue is content. Share content, empower you customers to spread the word. Example- Ford is using their customers to tell them what they want, and when they give them what they are asking for, they are encouraging their drivers to share. Please watch:

ROS (Return On Staff) – I have one client that is looking at every one of their staff members as mini-marketing tools. They are using Social Media two ways. One, creating an internal community to let everyone know what each department and location is working on. This helps the company be more efficient and lower churn. Less overlap and reduces over staffing and understaffing. Efficiency has spiked very positively.

Two, I have guided them to create a recognition rewards program to share knowledge, keywords and links in Social Media channels. Where there is a conversation happening about their industry or brand, the staff is getting involved and being proactive. It is amazing what happens when your entire staff works 15-30 minutes a day at interacting and posting links back to your brands site. I am not even touching on the positive repercussions from a SEO & Google/Bing perspective.

ROA (Return On Awareness)- I have found the lines blurring between SEO (Search Engine Optimization) and Social Media in this respect. Traditional “white hat” SEO marketing can be better achieved through the use of Social Media. Putting together a plan to fish where the fish you want to catch or at least be seen buy is imperative. From there, a commitment to interact is critical. If you let up all the good will be lost, and you can track this in your Google rankings or Alexa rankings. Whatever tracking tools you currently utilize! I am fond of Techrigy. But a well thought plan, committed resources and execution will result in real exposure for your brand.

I am sure there are more, but these are the ones at the front of my mind. Feel free to comment if you have more!

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You may or may not have noticed the new website that Authority Domains launched late last week. Awhile back we posted the mock ups of the new site and posted them here. What followed was great. Our users and friends alike gave us feedback on what they would like to see. Most of it entailed user experience, while others gave us ideas on Social Media Channels. Friday was the culmination of 3 months of listening, practicing what we preach, and creating. Here is the who, what, how and why of the new site:

1. Solution Color Coding- All of our services are color coded.
2. Social Media Buttons- There are buttons to our LinkedIn page, Facebook fanpage, our eBook and a tab that leads to follow the entire Authority Domains executive team on Twitter.
3. Share This – Every page is accompanied with the ShareThis tool. This is critical in allowing our users to share our website and blog content in whatever social media channel they choose to surf in.
4. Constant Contact- We have started a mailing list/survey solution for those who opt in. This is a key “old school” marketing initiative that has not gone obsolete. Constant Contact is fantastic and is easy to plug the opt-in to any website.
5. Simple Contact Form – Complete with a pull down subject option so the user can simply choose which bucket they want to contact us about.
6. Testimonials – Past or current customers can give us kudos as they see fit.
7. Recent Blog Posts- The recent blog posts widget keeps the page up to date with recent content.
8. Recent Twitter Posts- The recent Twitter posts widget keeps the users up to date with what is important to us.
9. Bulk Class C IP Checker- A critical tool for our SEO customers.
10. eBook- Our eBook is free service that customers and prospects that are new to Social Media to think about what it can mean for their business. It is a great education tool and helps them start thinking about SM the right way.
11. Retweet Tool- We attached this to every blog post throughout our blog history.
12. Intense Debate Comments- Jeremiah Owyang spoke today about the importance of being able to login using 3^rd party application (i.e Facebook Twitter, etc). This comments solution does exactly that. Less typing to sign in will lead to more interactions.
13. Poll- We used the Vizu poll on our blog.

Although it is a small sample of time, here are some stats from the last 3 days that we are tracking as ROI for our efforts.

1. 1. Time on the site rose from 2.5 minutes per visit to 4.1 minutes.
2. 2. 5X as many visitors the last 3 days
3. 3. 1/3 more link backs as we had previously
4. 4. 25% more traffic
5. 5. 50% more registrations for our mailing list

Over the coming weeks I will monitor the stats and ultimately new business. Sorry, we can’t discuss sales-but I will comment and let you know if we are seeing a rise. Also, we are considering using other tools like RSS readers (Netvibes) as well as Tweetizen. I will keep you up to date on that as well.

Props to the Authority Domains staff on a fantastic job. I would be interested in reading your thoughts on the new site.

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Because some of you asked, here is the slide presentation from the event last week at FELT. Thanks to Mark Wallace and EDR for putting together a fantastic presentation and slide deck. The slide presentation is a great example how organizations think about Social Media ROI. Instead of “return on investment” it is “return on interactions” or “return on innovation”.