The ROI on social media is zero. Also zero on your e-mail, rebranding and relocation. So get started.

Who would think to demand a quantification of the ROI on developing a new logo then printing new letterhead & business cards that go with it?

Do you really want to identify exactly every contributing factor behind a new client so your new logo, new office, e-mail system, marketing speech last spring, and latest 4 newsletters can get proportionate credit for that new audit?  Then you could calculate the ROI of your newsletter.

Then why would you even think about using that criteria for social media?

Do you really want to calculate the cost of a relocation?  Go ahead.  The check paid to the mover is just the starting point.  Quantify the cost to research a new office, negotiate a lease, count all the time to pack, identify disruption to billable time to get your staff moved, count the inefficiencies as everyone gets their computers hooked up and calculate the learning curve as everyone slowly gets back to work in their new office.

Do you really want to put a number on all of those factors? (I’d be worried if you say yes.)  If you don’t gather all that data, then you have no clue what the ROI is on your relocation because you do not know the cost in the denominator. 

And I haven’t even started on the numerator! Go ahead. Identify the specific new audits from rebranding.

When I was in grad school, one of my professors described that for every change made to the potato chip production line, the cost savings for that specific modification were tracked.  That’s the only way to prove your brilliant idea really delivered its promised 25% ROI.

Can you picture what the cost accounting system would look like five years from now when the production system has incorporated 50 new improvements?  Ponder that for a moment.  Tracking 75 or 100 variances for every batch processed on every machine in the plant.

That is the kind of exquisitely detailed cost accounting you would have to do if you really expect to calculate an ROI for social media.

I can’t imagine any CPA firm in the country could even begin to track that.  Nor should they.

What a waste of time.

No wonder people claim they can’t identify the ROI on social media.

Michelle Golden discussed this in 2010 in her post “What’s the ROI of Social Media?” is the Wrong Question.

Last month she expanded on this discussion in her post Listener Beware: Don’t Take Everything You Hear from Experts as Gospel  when she heard some firms lamenting that they can’t identify results from social media. 

I wonder if they can allocate specific new work to newsletters versus speeches versus client seminars versus golfing with potential clients.  What’s the ROI on golfing?

In any event, here are just a few of her questions for those firms:

How have they been using social media? Did they define their purpose? Specify goals? Once that was done, did they use the right tools? In the right way? With the right groups or people? And for how long? Did they track the right success metrics?

Bill Sheridan expands on this in his post, There’s no ROI in social media. Now start socializing.

And still, the social media naysayers spout their nonsense: “Where’s the ROI? How come we’re not making any money on this stuff? I’ve been on Twitter for a week and nobody’s bought anything yet.”

There is no ROI in Twitter, or blogs, or Facebook. Not if you do it right. Those things are simply the tools we use to build relationships in a social world.

Social media is one of many tools we use to build relationships. The relationships turn into people who want to buy services from us. Then you see the results.

Mr. Sheridan brings in Seth Godin’s book Linchpin, which makes it even more enjoyable.

Check out all those posts I linked.