…and Measuring ROI

In my last post, I set the stage for a showdown… the old ways of measuring ROI strictly through numbers and the effect on bottom dollar and this so-called new-age that will turn your thinking upside down. In the Harvard Business Review previously mentioned, the idea of measuring ROI centers on investing in consumer investments, rather than concentrating on marketing investments. Blogs, Facebooks, Twitters – social media in general has taken marketing by storm. The new age of measuring this type of marketing is still developing. However, we can begin to define the calculation of ROI as in customer investments rather than marketing investments.

The future of digital marketing analytics depends entirely on this new way of measuring ROI. Popular metrics are likes, post reach, or shares but these are not the key performance indicators (KPI) that are hard to measure or lead to a positive ROI or investment in the customer. Meaningful KPIs are the concepts of brand engagement, product education, or user generated content. When a business utilizes social media to build these KPIs they are investing in the customer. Investing in the customer this way, is the business hoping to build a customer experience or customer-to-business relationship that will impact sales in the short- and long-term.

With this new idea of ROI in mind, we have some thinking to do. The question remains, what will lead to the most value for your business – investing in marketing investments or consumer investments. I’ll deliver a verdict in my final post of the week.