Social media ROI return on investment is a popular topic but what about cost of inaction, COI? What cost to your company NOT to be involved in social media – not to be monitoring, creating content, interacting, responding and measuring impact of people creating stuff online around your brand or organisation?
I’ve been speaking for a couple of years now on “The COI – Cost of Inaction”…it’s always a good fallback when companies won’t accept the ROI – Return on Investment. Even when it’s clear that acquisition of customer costs drop through word of mouth, that support costs drop due to peer to peer support, that customer engage with your brand for longer and more often and brand recall goes through the roof, it’s still “too dangerous”. Here’s a video of me at a Tweetup in Singapore in March 2009 talking about COI.
COI Cost of Inaction with Social Media
Sorry about the crappy sound… blame Aaron Koh socialPR and the guys at the tweetup, not me! 😛
For smiffy : Return on Investment Brand recall goes up 5x, people come to your website 5x more often, stay 9x as long, support costs drops to 1/5 due to peer to peer support cost, of acquisition goes down due to peer recommendation. (old post)
One of the classic costs of social media inaction for me, is the loss of voice of the company in a sea of discussions. So when Engadget posted on their blog that Apple iPhone etc would be 3 months late, Apple, which has a Veil of Mystery PR strategy was left dumb. Apple stock plummeted…
… not engaging with blogs means you have no trust and reputation in the blogosphere, and can wipe 4 BILLION DOLLARS off your market cap in minutes. You can read more here. Blogs are trusted sources now. Engadget trusted the information. Apple has relationships with MacWorld journalists but no tech bloggers (or didn’t at the time). Calling a journalist means by the time they have the story in print, your stock closes down a few dollars and is therefore in trouble. This doesn’t happen with companies that have many open channels for checking and double checking sources.
It’s not just big bloggers, remember deaf mom who blogged about poor service at Steak ‘n Shake in the week they were attempting a merger and acquisition? She had a reader who blogged at another blog, and they had a reader who blogged the story on the Consumerist, and the Consumerist had readers who were journalists and they followed up on mainstream media… if you believe that not all press is good press and can damage you, you had better believe that social media follows the same path.
Ignore social media at your peril. The Cost of your Inaction might just be a price too high…