I have been having a lot of conversations lately about how people confuse a lead with ROI. ROI should not really be measured based on how many clicks an ad receives. ROI is about how many of those “clicks” result in a sale. It’s why metrics are so important, and it’s why so many people who love metrics are often frustrated that they don’t have more comrades in arms.
Well, I thought of a way last night to kind of bring the difference to life. Foursquare! Yes, that mobile geo-location creepy thing that I will probably regret bad-mouthing in 3 years will help me illustrate the difference between a lead and ROI.
So, let’s say you’ve downloaded Foursquare to your phone. You are checking in like a crazy person. You have already become mayor of the name you gave your car. You find out that a store near you is offering cookie samples if you go and check in there via Foursquare, so you take your loyal subjects of Cartonia and go shopping. You check in. You get your sample. You look around, but you realize that buying a dozen cookies the size of your head may not be a good idea. You’re already hopping up and down just from the sample. You’ll come back another time.
Are you a lead or can the store calculate you as part of the ROI of their mobile campaign?
You are just a lead, my friend. In fact, you might be proving the VP of Sales right. She said, “Um, we are giving away free samples, and we are asking people to come by, but people who get free samples are seeing their desire met. They don’t have an incentive to buy, they just have an incentive to check things out and check in on Foursquare.”
The Online Translation
Now, take this Foursquare story and bring it to the online world. Instead of an incentive via Foursquare, you’re enticing people to come check out your site via a contest you’re promoting on Facebook. If they download your white paper, they get entered into a drawing for the new iPod Touch. So, you get people to your site. You get people to download your white paper for free. Those are not examples of your Social Media ROI, though. Those are the people who got the free samples at the cookie store. If you give them something good, they may consider coming back later. If you don’t give them a reason to come back, or if you don’t motivate them to buy, then they might never become a customer. Your ROI will be poor.
Does this make sense?
Image by Tan Hsin-Ee. http://www.sxc.hu/profile/hsin26