David Meerman Scott had an Epic ROI Rant and because he threw in some chatter about putting on pants in the morning and paying your lawn service, I feel like a lot of people missed a bigger point that he was making. Some people in the comments section of David's post were very eager to jump in and agree wholeheartedly that calculating the ROI of social marketing was like putting pants on in the morning. Mm... OK. But here's the thing - just because you can't calculate ROI is DOES NOT absolve you of the responsibility to measure your performance and try to improve it.
We measure what we do in life for a lot of reasons. We measure our children's height at regular intervals to track their progress and often compare that with their doctors' charts to make sure there is nothing wrong. We measure our weight to make sure we didn't overdue ourselves during the holidays. We track our investments to make sure we don't live in poverty later in life. We score games so we know who has won - what fun would a football game be if there weren't goals?!? It would just be a bunch of heavy guys running around in a lot of padding, beating each other up. Measurement is used for a variety of purposes - to:
- Align expectations
- Track progress
- Assess fit
If we don't measure - we are just a bunch of football players without a way to score... running about aimlessly. And while that may be fun for a bit, it leaves us a bit dissatisfied over time. In organizations it is disastrous because measurement is used to communicate what we are striving toward, understand when we've succeeded, and ensure we are making progress - collectively.
There are all sorts of measurements that are not financial that can be used to track progress and performance but the enduring fact of business and life also remains: we cannot spend more than we make over a period of time so... financial measurements must be part of the mix. How you track financial measures and over what period depends on how direct or indirect you expect the results of your business initiative are.