It was a precipitous and entirely avoidable fall.

Liz Claiborne broke the first commandment of branding: Be true to your clients and yourselves.

Claiborne made its name by designing stylish career wear for the millions of women, particularly younger women, entering the workforce. Their pieces were consistently styled and well made, delivering a specific brand promise to the women who stocked their closets with Claiborne ensembles that could be mixed and matched to create multiple outfits from a handful of separates.

Claiborne developed a loyal and trusting following of women who appreciated her collections. But with her retirement from the company in 1989, the brand began to suffer. There was no designer who shared Liz Claiborne’s design aesthetic and without a design leader, the company regressed to a financial leader whose focus was the bottom line, not the hemline.

Design by committee emerged, diluting the Claiborne brand promise in a fruitless pursuit of the youth culture. Their working women loyalists took notice and turned their backs on uninspired and confusing Claiborne collections that were considered fashion forward but not geared toward working women, the brand’s core constituency.

The dispiriting Claiborne story was in sharp contrast to the story that Jay Greene recounts in his book Design is How it Works. Porsche has remained remarkably successful in an industry that has few perpetually thriving automakers. Porsche attributes their success to an unyielding devotion to the design principles encompassed in the very first 911 that debuted in 1963.

Since their very first car, Porsche has remained true to its design DNA by incorporating specific design cues – intakes instead of a radiator grill, a car that always tapers to the rear, open wheel rims to display the strong brake calipers, front fenders always higher than the hood, ignition always on the left of the steering wheel and vertically oriented dashboards – that support their vision of a car that is all about driving performance and authenticity.

Porsche has never varied from a design approach that produces cars that their own designers crave. They never cut corners. They never adopt trends that risk the company’s credibility. And they never try to appeal to everybody.

Porsche designers intuitively understand the desires of their most passionate drivers and develop new cars with them in mind. Liz Claiborne took a different tack and abandoned their brand promise and with it their most loyal clients in pursuit of a younger, more active customer. They alienated their most loyal customers without generating any traction with the fickle and trend conscious youth market who want nothing to do with the company who makes clothes for their mothers.

Porsche has had an endless string of hits, including their Boxster, Cayman, Cayenne and Panamera and reported record profits in 2009. Liz Claiborne has virtually ceased to exist. Breaking your brand promise appears to have severe repercussions. If only the Claiborne executives drove Porsches, they’d understand.

How many other successful brands have hastened their corporate demise by abandoning their core principles and their most loyal customers? Sadly, I’ll bet it’s long. Real long.

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As a competitive tennis player, my racquets are the most important tools I carry so there’s no way I’d entrust them to any airlines baggage handlers. In pursuit of the perfect racquet I’ve tested an assortment of frames and experimented with strings at a range of tensions until I found the right combination that provides the responsiveness, feel and power that I rely upon every single shot. And when I break a string, I have complete confidence that the next racquet I pull out of my bag will perform precisely the same way. Every time. Without fail.

How do I know that I can rely upon each racquet’s precision and performance? Because each racquet is prepared by a local entrepreneur, Paul Schambs, whose racquet stringing skills have attained artisan status.

For those who don’t play tennis, or play it casually, the importance of consistency in racquet preparation may seem obsessive, but the deviation of just a few pounds in the string tension can dramatically affect the playability of a racquet. And having pulled a racquet out of my bag that was strung by another, less talented stringer I can attest that the difference in power and feel can throw off your game and affect you mentally.

Which is why so many highly skilled players and even tennis professionals rely upon Paul’s expertise and allow only Paul to string their racquets. He is the tennis equivalent of Stradivarius, carefully crafting each racquet to the specific needs of his stable of players and taking pride in the consistency and exceptional quality of his work.

All of which led me to wonder why so few entrepreneurs and businesspeople are recognized as artisans in their own fields of expertise. Artisans are pursued. They’re highly valued. They can charge a premium.  They’re the recipients of referral business. And they don’t have to produce expensive works of art like Stradivarius. They can make pizzas, fix cars, paint houses, or provide marketing guidance. As long as they do it with deep personal commitment, pride and unmatched expertise, they become irreplaceable artisans.

If you’re not perceived as an artisan in your particular field, what are you doing to change your perception and deliver consistently expert work that separates you from the rest of the pack?

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Alec’s approach was so simple and so direct, that it will undoubtedly be copied frequently by other job seekers. And why not? It was imaginative, it was unique and it worked. No reason others shouldn’t push the same envelopes in their job search endeavors as well and take full ownership of their personal brand and determine precisely how it’s presented.

For those imaginative small business owners, you can do the exact same thing when preparing to meet with a client who needs SEO or social media services. Buy the Google adwords for their company name a few days ahead of your meeting. Then, during your pitch, ask them to Google themselves and see your pitch for their precise needs at the top of the page. They’ll wonder how you got the top position, they’ll be impressed that you know how to manipulate the page rankings and you’ll have demonstrated your capacity to outimagine your competitors.

Bottom line, for a few dollars and a few minutes of your time, you and your firm can appear distinctive and memorable. And that’s always a good thing.

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If your business engages in unethical or inappropriate behavior, then you have legitimate reasons to worry about the potential negative impact of social media since social media doesn’t camouflage your true identity, it reveals it.

However, if your concern centers around the potential reaction to typical business slip-ups and oversights, then you really have nothing to worry about as long as you demonstrate immediate empathy and care for your clients. And when you make a mistake, as everyone does, follow these simple, proven rules:

1. Apologize. If you screwed up, simply acknowledge your mistake and say you’re sorry. We all  make mistakes every day. And we deal with companies that make mistakes every day. We understand that mistakes are inevitable. However, we expect that if you make a mistake that you will acknowledge it and proffer a sincere apology. Your apology isn’t an invitation to sue you or embarrass you, it’s simply an acknowledgement of societal norms that require the acceptance of responsibility for one’s actions.
2. Resolve to fix the mistake. The apology is a great start, but the problem still remains. You screwed up. You sent the wrong product. You didn’t deliver your proposal on time. You overcharged on your invoice. Whatever you did (or failed to do) still needs to be corrected. So, step up and tell them how you intend to fix the problem and ask them if that effort is satisfactory.
   One of the biggest mistakes I see companies make is offering a solution that benefits them, but not the client. If you failed to deliver your product on time, it’s your responsibility to overnight the product, to get it there as fast as you can. I don’t care if you have to eat the extra shipping costs. I expect you to do the right thing, even if it’s inconvenient or expensive. That’s how you show you really care about fixing your failure.
   If you offer to fix the problem, and your client says “that’s not good enough,” then you’ve got to work with the client to determine exactly how you can make things right.
3. Fix it. Steps 1 and 2 are actually pretty easy. You say you’re sorry and offer to fix the problem. The tough part is actually fixing the problem since this is your final chance to ensure that your relationship isn’t significantly harmed. If you promise to overnight a spare part, you’d better make sure that the part is put in a box, is properly labeled and is handed off to FedEx. Don’t delegate, do it yourself.
4. BONUS STEP: Follow up. Once you’re sure that the problem has been resolved exactly how you promised, make a follow up call (not a tweet or email) to let your client know how important they are and to demonstrate your care and concern. I know that your first reaction will be to ignore the problem rather than revisit it, but you’ll actually enhance your reputation by confronting it, ensuring that it’s resolved and proving your value as a reliable and caring business partner. Pick up the phone.

Typically, it’s best to take the conversation off-line while you’re addressing a client’s problems. After you reach out to them online to let them know that you heard their complaint and that you want to take care of the problem, suggest that they contact you through a Twitter direct message, an email or a phone call so your conversations and ultimate problem resolution remain private.

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Although most of the public missed the online contretemps, last week Nestle Corporation’s Facebook Fan Page was essentially hijacked by Greenpeace activists and supporters protesting Nestle’s use of palm oil and its associated destruction of the rainforest.

Techguerilla provides a handy timeline detailing the escalation of hostilities between Greenpeace activists and Nestle’s Facebook administrator that ultimately degraded into social media warfare.

What lessons can your business learn from Nestle’s Facebook surrender?

You should expect organized attacks from your critics on your social media platforms so you need to prepare your crisis response in advance. Although you might think that you own your Facebook page or Twitter account and hashtag, the community actually has the power to dictate the content of conversations revolving around your brand.  What you can control is your response and your message. You should have a crisis response team identified and prepared to respond to likely attacks before they ever happen. You know where your weaknesses are, and so do your critics, so plan for the worst.

You may not be able to convert the mob, but you can rally your supporters. Although the Greenpeace activists essentially hijacked Nestle’s corporate Fan Page, Nestle still had the capacity to respond and plead their case to their true fans. While they did post a link to a detailed and persuasive written corporate response, it lacked the impact of the Greenpeace videos and unrelenting attacks. Large corporations don’t have to respond with lawyer approved communications, they elect to. And when they do, they don’t look social or engaging, they look monolithic and impersonal. If you elect to participate on social media platforms, you need a social strategy and trained social media participants.

Utilize the power of the social medium to engage socially. Nestle never put a human face on their corporate response. Nobody knows who the inept Facebook administrator was, they had no identified corporate employees respond and they failed utterly in dealing with angry posters, fostering relationships with supportive advocates or engaging their critics.

What could Nestle have done differently, acknowledging that they didn’t have a crisis plan in place, once the attack began?

1. Respond immediately and cordially. Nestle’s lack of an experienced community manager may have precipitated this entire battle. Their early combative tone and snarky responses fueled anger on their Facebook page and enabled the conflict to attain viral status.
2. Convene an internal crisis response team to review the attack and anticipate their next move. Once the conflagration started, Nestle should have assembled a response team of social media managers, corporate communications and marketing executives to strategize their response and look ahead to anticipate their critics’ likely next step.
3. Shift their focus to engaging the attackers and trying to find common ground for resolution (Olivier Blanchard makes an excellent case for reaching out to Greenpeace rather than combatting them). Nestle’s Facebook page isn’t a battlefield, and they can’t vanquish their foes. Their best course of action isn’t direct and repeated confrontation, but negotiation and appeasement. Had they reached out to Greenpeace to discuss how they could work together to solve the environmental problems they could have mitigated much of the continued anger. Neither side benefits from continued digital warfare, so find a way to reach accommodation.
4. Determine the appropriate message and medium for continued conversation. Nestle responded to their critics with brief statements and a link to a more detailed corporate response. They never leveraged the power of the visual medium to communicate their position. This wasn’t a time for press releases.
5. Prepare video responses to put a human face on the issue and to communicate their corporate commitment as concerned employees, not a compassionless multi-national corporation. Take a page out of Toyota’s response to potentially life-threatening concerns with their cars and respond with video. Toyota put up a series of videos dealing head on with the issues being covered in the media, with corporate spokespeople standing up to defend their position and address specific concerns. Additionally, they recruited independent safety experts and engineers as supporters. Nestle had the same opportunity to respond and defend their position and demonstrate to their fans that they care about the accusations and take seriously their role as environmental stewards. They had a strong case to make, but they never made it effectively.

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The same difficulties frequently arise in marketing and social media programs that rely on intricate and detailed plans but fail to account for cultural realities and ingrained behaviors.

Businesses aren’t sterile case studies. They’re collections of individuals who collaborate around a single purpose. And they typically adhere to the values espoused and demonstrated by their company’s leader, not by a lofty mission statement.

Although you may want every company to demonstrate the customer service attitude of Ritz Carlton, the friendliness of Southwest Airlines, the ingenuity of Apple and the thrift of Wal-Mart, that’s simply not the world we live in. Companies frequently disdain customer service, disregard their employees and customers and focus myopically on preserving a rigid and unresponsive business model.

The difficulty in planning a social media strategy for companies that are controlling, insular and generally unresponsive is that social media doesn’t camouflage their true nature, social media reveals it.

When working recently with a large company in devising and executing a social media strategy, I was confronted with conflicting realities. On one hand, the company seemed eager to exploit the potential of social media in reaching their target audience frequently and inexpensively, but on the other hand, the company’s culture incorporated autocratic control, restricted authority among their staff, lacked any feedback mechanisms and romanticized reliance on historical business processes.

A social media program, no matter how carefully designed, wasn’t going to change any existing cultural artifact. In fact, a successful social media rollout would actually have the potential to damage the company’s reputation by revealing its weaknesses to an audience previously shielded from the company’s true nature.

How can you predict social media failure?

1. Obsession with control – many companies believe that as long as they can control their message, they control their brand and, ultimately, their destiny. Social media shifts control to the participants, not the originator of the message. Companies can listen, engage, converse and interact, but they cannot impose control.
2. Unwilling to commit people to the program – your clients have no desire to develop a relationship with your company. Companies are, by their nature, impersonal entities. However, they may be willing to engage with individuals within your company, as long as those individuals contribute something to the conversation. These relationships take time to develop and rarely deliver immediate results. If nobody is devoted to the program, the program withers and dies.
3. Management views social media platforms as time drains – every office tool can be a time drain if the employee misuses it. They can chat with friends on the phone, they can while away hours in the Internet and they can even waste each other’s time in mindless conversation. Facebook is no different. If your employees use it as a tool, it can deliver results. If they use it to connect with high school buddies, you have a management problem, not a social media problem.
4. Think only in terms of pitching – if management hears the word “marketing” and immediately envisions another channel to pump out self-serving sales pitches, they’re doomed. The “social” component of social media is overriding, yet frequently ignored.
5. Management refuses to participate – It’s not a good sign when senior management refuses to participate in any way on any of the social media platforms. The message this sends to their employees is that social media is irrelevant or unnecessary to management and hinders adoption throughout the organization.
6. Users restricted to certain subjects – As a corollary to controlling the message, if users are restricted from engaging in open conversations and required to deal only with specific topics under unyielding rules, then they’re eliminating the human component and diminishing the effectiveness of the conversation.
7. Social media participation isn’t tracked or measured – It’s universally accepted that companies will get more of anything that they measure, and when they refuse to measure staff participation in social media, they’re sending the message that it’s not that important. The result is preordained: limited participation and effectiveness.

There is no getting around it – when strategy confronts culture, culture wins every time. If your company culture is too rigid, controlling and unresponsive to support an effective social media program, the best solution is to pursue your standard marketing tactics and ignore the social media channels entirely. No participation is eminently preferable to desultory participation.

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Mirroring the explosive growth of Twitter and Facebook has been the excitement  of companies eager to exploit what they see as another marketing platform able to reach targeted individuals at virtually no cost. Company after company set up Twitter identities and Facebook Fan Pages that immediately began broadcasting endless pitches for their products and services.

These clumsy and ineffectual efforts were summarily followed by claims that these social media platforms were a waste of time for companies trying to build their business and attract customers. But what these companies failed to recognize was that most consumers simply aren’t looking to engage most companies online. We’re already overwhelmed with marketing messages and have no desire to open another advertising pipeline right to our desktop.

That doesn’t mean that social media participants won’t interact with companies, but they’ll to it on their terms and on their time, not yours. This shift in the balance of power to the consumer necessitates a shift in communications strategy for your company. Your focus can no longer be solely on your outbound message but now must recognize and accommodate the need for two-way communications that integrates customer service, not just sales.

So, what are the new rules?

1. become an active listener. Conversations are going on all day that mention your company by name. You need an active listening outpost that captures these conversations and funnels them to the appropriate internal people to respond. Is someone having a problem with your product? Contact them to see how you can help. Send them a link to an owner’s manual. Put them in touch with your company’s 800 support number. Link them to their local retail outlet where they can get the help they need.
   Is someone ranting about your product and claiming that you suck? You have two choices: let them rant and spread their vitriol across the web or step in and attempt to defuse their anger. Will you convert all the ranters to raving fans? Probably not, but without an active listening strategy, these rants will occur without your influence and they will all end badly for you.
2. involve listeners throughout your organization. Most organizations plan only to listen with sales personnel, eager to jump on any mention of their company as a sales opportunity. However, most companies will find that customer service will be a larger priority for those mentioning your company by name. Make sure you have people actively listening and ready to respond from customer service, product development, your executive suite and even your legal and HR departments.
3. respond immediately. Your 800 number is staffed and answered at least during your business hours, and so should your social media channels. You can’t impose communications methods on your clients. They’ll let you know how they want to get in touch with you. Some will phone, some will email and some will contact you through Twitter. It’s your job to be ready to respond immediately no matter how they contact you.
4. empower listeners to resolve problems. If you assign an employee to monitor customer service issues on Twitter, it’s essential that you empower them to resolve the issues that they encounter. There’s nothing more frustrating than dealing with a nameless, faceless and voiceless person who does nothing more than take your name for someone else to deal with tomorrow. Responding with immediacy simply magnifies the customer’s frustration if you instantly tell them that there’s nothing you can do.
5. apologize. accept responsibility. tell them how you’ll solve their problem. Face it, there are times when your customer has legitimate complaints about your company, product or service. It’s unavoidable. Your customers don’t expect perfection, but they do expect you to apologize for their troubles, accept full responsibility and then tell them exactly how you’re going to make things right. And then do it. It’s not complicated, but it’s amazing how few companies get it right.
6. continue the conversation until the customer determines it’s over. I tweeted this week about problems I had with a Sony Reader ebook. A phone call to their support line that took nearly an hour could have been reduced to a minute or two if the support rep had simply asked the right question first: Do you have a Mac or a PC? I was annoyed and frustrated and vented in a tweet that was read by someone at Sony. To their credit, they responded:
   Sorry to hear you’re having a bad experience. What is going on? Can we help?
   I sent them a reply and then… nothing. But I wasn’t done yet. I still wanted to know how they’re addressing the issue of Mac users who cannot upgrade their firmware and therefore cannot use their latest Reader software. Instead I got silence. My conclusion: they don’t have the capacity to deliver exceptional user experiences and their half-assed Twitter response just confirms my perception of their company.
7. don’t forget marketing fundamentals. There is no better time to cement a customer relationship than after you reach out to help them solve a problem. Even if the problem wasn’t entirely solved, you have the ability to appease them if you send them a coupon for your online store, enroll them in your Customer VIP program or register them in your free online training program. You rarely have person-to-person contact with your customers, so don’t blow it. Do something to delight them and remain memorable for all the right reasons.

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I’m spending a couple of days this week with my elder son visiting Loyola and DePaul Universities in Chicago so he can make his final decision to attend one of the schools this fall.

From the university’s perspective, it’s tough to make an indelible impression on an 18 year old in the space of just a few hours on campus. So, how can they build an ongoing relationship with prospective students and show them what life is really like on their campus? Turn the job over to their students and turn them loose with social media.

The university students understand better than any school administrator how a high school senior thinks, what they want to know, what they’re anxious about and what appeals to their peers.

Take the issue of student housing. For virtually every freshman, their first year will be the first time that they’ve had to live communally with strangers. Most are anxious about dorm life. What are the rooms like? What kind of social life will they have? What can they expect?

Loyola had students submit videos to a Loyola Cribz contest – a takeoff of MTV Cribs – that let the students show how they really live. On campus, off-campus, real students show how they live, share their gorgeous lakefront views and provide a glimpse into the life of a Loyola student.

The students use video to generate interesting and genuine insight into their daily lives – how they live and how they study. These videos are much more believable than the University produced videos that are well done, but are almost too well produced. Authenticity rules in the SM world, and slick production just doesn’t convey authenticity.

There are a lot of businesses who could take notes from Loyola’s social media campaign. Focused on Facebook, YouTube and Twitter, the university understands where their target audience lives and delivers compelling content that is teased and delivered through their Twitter and Facebook channels.

Although it’s apparent that the university’s entire social media program is still new, it shows promise and does a terrific job cross-pollinating positive and authentic messages across Facebook pages, student blogs, Twitter feeds and YouTube channels. Is your business doing the same?

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Brandweek published today an article entitled Is Twitter the Next Second Life? that laid out the desultory details of Twitter’s autopsy even before the playful blue bird’s corpse assumed room temperature.

The title of the article, comparing Twitter to an entirely dissimilar virtual gaming platform, established the unrelenting bias of the author who made no attempt to investigate the reasons behind Twitter’s explosive growth over the past two years, but was content simply to comment on its apparent failure to maintain an unsustainable growth rate. The fact that Twitter’s growth rate has receded to only 6.2 million additional users per month from a recent high of 7.8 million is apparently cause for alarm among the Brandweek cubicle farm apparatchiks that would sacrifice infants on live webcasts to attain a hundredth of Twitter’s monthly gain in their own subscriber base.

So, how to prove that Twitter’s demise is imminent? Call on an assortment of disgruntled marketing execs and Social Media directors willing to denigrate Twitter’s reach and influence, naturally. With an enormous population of clueless and envious advertising and PR flacks champing at the bit to diminish Twitter’s accumulated luster, Brandweek had no problem finding jilted Twitter suitors eager to vent their bilious spleens at Twitter’s expense.

In addition to a couple of prominent marketing executives who dismissed Twitter’s relevance to their marketing efforts, the article quoted Sienna Farris, the director of social media strategy for a global ad agency, Strawberry Frog, who demonstrated her social media bona fides by claiming that there are just a few areas where Twitter makes sense for marketers. Those areas: hawking deals, announcing promotions and handling customer relations. Not a word about listening. Not a syllable about engagement. Not a hint about relationship building or customer support or market research. In sum, not a single mention of how Twitter can be employed as a component of a digital marketing strategy with the exception of self-serving pitches – the one thing certain to alienate SM participants.

A quick examination of Strawberry Frog’s social media activity reveals their precise level of social media cluelessness. Sure, they have a Twitter id and a Facebook Fan Page, but their participation is entirely one-sided. An examination of their Facebook Fan Page reveals daily posts, but only a single comment. No conversation, no engagement, and no attempts to converse with their fans. Ditto their Twitter stream. Virtually no conversation, but plenty of self-promotion. Could Brandweek possibly have found a social media director with less of a clue how to deploy Twitter as a strategic tool?

Despite acknowledging that companies including Ford, SomeEcards, Dell, Comcast and BestBuy have achieved notable successes by exploiting their Twitter engagements, the author still concludes that Twitter is destined for the ash-heap of history. After all, Ford may have achieved enormous success, with Scott Monty attracting over 37,000 followers and Ford launching their latest Focus model exclusively through social media, but Chevrolet apparently failed to replicate Monty’s success, so #TwitterFail.

Maybe it’s just me, but shouldn’t a journalist ask some simple questions and attempt to explain why two nearly identical companies in the same industry would have such disparate social media results before declaring the demise of one of social media’s most notable participants? After all, if Scott Monty at Ford has enormous success and measurable ROI in his SM efforts, why is the SM platform derided instead of Chevrolet’s social media director? What’s Scott Monty doing that Adam Denison at Chevrolet is missing? I’m gonna guess that it has something to do with the content of Chevrolet’s messages, not the Twitter platform itself. But, rather than explore the differences in approach that each company elected to pursue in their SM engagements, the author simply declares the ineptitude of the Twitter platform in attracting followers. When in doubt, blame the platform.

There are dozens of social media directors, consultants and even self-proclaimed gurus who could have provided countless testimonials and case studies of companies in virtually every industry that have leveraged their Twitter participation into measurable ROI, but their stories weren’t enough to counter Brandweek’s anticipatory joy tolling Twitter’s death knell.

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It’s time to counter a growing sentiment among social media types – including some nationally recognized practitioners who really should know better  - that trying to justify your company’s decision to pursue a social media strategy based on ROI is somehow foolish.

Now, these same high priests of social media don’t ever suggest a better alternative or method to determine whether or not your company should pursue a social media strategy, they just insist that you’ve got to do social media because it’s just so darn important, and besides your competitors are.

If their argument sounds like your teenager’s argument insisting that you’ve just got to let him stay out til 2am because everyone else is doing it, well, you’re right.

However, unlike gullible parents, the executives who make investment decisions aren’t easily duped, they don’t jump on every trendy b-school bandwagon and they’re not scared of your newfangled technology. They want more than breathless claims. They want proof.

Twitter is that thing Ashton Kutcher and Oprah play with. Facebook is the place where their teenagers waste their entire evenings. And your preoccupation with these platforms doesn’t convey cutting edge marketing savvy as much as it does pointless obsession.

If you want corporate buy-in and investment, you’ve got to demonstrate how your social media strategy will generate positive returns for the company. In real dollars, with real timelines.

The ROI opponents claim that there’s simply no way to really measure ROI. After all, they claim, How can you put a dollar value on a blog post, a blog comment, or a single tweet? As if that level of granularity is the measure that anyone is looking for.

Or they simply attempt to redefine a financial metric that has been commonly defined and routinely accepted for decades.

Reading just a few recent posts by legacy ROI opponents, I’ve seen ROI redefined as:

• Return on Impact
• Return on Impressions
• Return on Importance
• Return on Influence

And, my personal favorite for its absurd complexity and impenetrable formula: ROI should really be referred to as Return on Conversation whose formula is:

(B • I) (m+s • r)/d] / [O/(b + t + e)]

Brand Equity times the Intent of Communication times (Message plus Suitability times Reach) divided by Sustainability OVER Outcomes divided by the Cost times (the Budget plus Time to Produce plus Experience)

I believe the result is actually measured in Schrute Bucks.

The reality is that ROI is much simpler than that. You only need to know two numbers: how much you gained from your investment, and the total cost of the investment itself. That’s it.

ROI = (Gain – Cost) / Cost

If you spent $1000 and saw an increase in sales of $1500, then your ROI was:

ROI = (1500-1000)/1000 = 50%

I think I know where the disconnect is. Social media engagement typically generates an action that is non-financial in nature. You collect Twitter followers, generate retweets, get comments on your blog, add new Facebook fans, attract YouTube viewers or generate click-throughs to your website.

However, These aren’t ROI. How do I know? Because my banker won’t take Twitter followers in lieu of a check. Clear enough for you?

I don’t want to diminish the importance of engagement with your clients and your prospects. I’m a huge adherent of social media and I recognize its transformative potential, but only if it’s used strategically, with specific objectives that you can track and measure.

ROI doesn’t become ROI until it does one of two things: increases revenue or reduces costs. Those are financial impacts that are real, measurable and put a grin on your CEO’s face.

Determining ROI isn’t a laughing stock metric in the corporate world. Calculating potential ROI demands that you create a strategic plan, consider alternatives and project likely actions and returns from your program. It compels you to define precisely your plan’s objectives, put them down on paper and support them when challenged.

Simply saying that we need a social media program because our competitor has a social media program is absurd. What if their program is drains their  marketing budget without any noticeable effect? Do you want to copy that?

If you want funding, you need to justify your program with more than intemperate claims that we’ve just gotta do something. What’s your goal? To increase revenue or decrease costs? How will you do it? Who will be involved? How much time is necessary to invest? What technology platforms will you support? How will your program fit into your current operational structure? What do you want your conversational partners to do? How will your success be tracked and measured?

If you don’t know the answers, you don’t deserve the funding. Social media marketing is no different from any other marketing, it just uses new channels and has interactivity built-in. If you can’t tell me how you intend to leverage the medium and generate a positive return you can always try again next quarter after you learn.

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