Achieving Strong Social Media ROI: Middle Market CEOs Play an Important Role

Within firms of any size, social media ROI success is tough to achieve. In a July 2013 social business study from MIT Sloan Management Review and Deloitte Consulting, C-suite executives acknowledged their awareness of the growing importance of external social media and internal social networks to their firms' success. But the executives also admitted to three major barriers impeding their firms' progress in social media: 28 percent cited "lack of an overall strategy;" 26 percent cited "too many competing priorities;" and 21 percent cited "lack of a proven business case or strong value proposition."

Middle market companies acutely feel these challenges. First, some midsized firms do not have CMOs or CIOs to drive the strategy and the tactics related to social media. On the flip side, other firms have a CMO and a CIO, and the advance of social media into the disciplines of sales, marketing, customer service, and product development creates turf battles between them. "CMOs are commanding a growing share of their company's investment in technology as the amount of marketing that goes through digital channels grows like crazy," says Rich Karlgaard, author of the new book The Soft Edge: Where Great Companies Find Lasting Success. "Social media in particular presents market opportunities that are fleeting in nature; these must be grabbed or they're lost. So CIOs should recognize that CMO requests for greater technology budgets are not power grabs, but a reflection of reality."

In either scenario, a middle market CEO faces the challenge of deciding how much to get involved personally in the strategy and execution of the firm's social media initiatives so that its importance is reinforced throughout each department. The ROI from social media efforts is maximized through correct prioritization of money, personnel, and tactics. Here are a few things CEOs should do:

• Get educated. A December 2013 article in The Wall Street Journal article explained that senior executives expressed concern that their companies will fall behind if they themselves don't have a firm grasp of the digital media their employees must leverage daily. As a result, "some firms are pairing individual leaders with young mentors, while others are spending hundreds of thousands of dollars to teach the entire C-suite how to use social tools that most of their entry-level employees use without a second thought." Formal classes can put social media in context and help leaders make better decisions, which will help generate the proper measurement of ROI and improve communication across silos. According to the Sloan/Deloitte study, company size plays a key role in determining the purpose of social business as well as how it matures, which is key for midsized firms: "Among companies with less than $250 million annual revenue, more socially mature organizations focus their social efforts on providing customer support, managing projects, and accelerating innovation. And companies that focused on those things rated their social business maturity a half-point higher on a 10 scale than firms that did not."
• Use social media education in a balanced way. Some executives in the WSJ article who took lessons in social media said they did so "after realizing that junior staffers' new ideas weren't getting much traction because bosses didn't understand their proposals." Connecting social media with important business objectives is the crux of "explaining the why" to employees, which generates long-term commitment. And creating collaborative behavior in social media means that the chief executive not just drives its use, but actually uses it. While some corporate leaders such as Richard Branson are "power users" of social media, the time constraints on a middle market CEO do not allow for a constant presence. Proper strategizing by departments on when to use the CEO's "voice" in particular social media efforts is a critical factor. This active but selective CEO involvement improves buy-in all the way through departments so that social media ROI is enhanced.
• Don't let present ROI measurement challenges derail the company's social media advancement. When considering funding a particular social media initiative, "those proposing it should link the investment to the issues leaders are concerned about" — which assumes that leaders have communicated those issues clearly. And when social media improves an area of performance, that department head can estimate the financial benefit at the time and judge its accuracy at year end, which will provide lessons for the future. The Sloan/Deloitte study says that "although the classic adage admonishes that what can't be measured can't be managed, businesses on the path to social business maturity don't let disagreements about the 'best' measurements halt their progress."
• Drive the idea of interconnectedness. At middle market firms, the chief executive must make sure the bridges are built internally for collaboration to happen. Leslie Berland, SVP of digital partnerships and development for American Express, emphasized in the study the importance of collaborative, team-oriented culture to driving social business initiatives. "I think it's impossible to win in social media if you're approaching it in a siloed way," she said. "When different brands and companies launch things in the social media space, you can see if there's not alignment. It's very transparent; it looks disjointed and not clear." At middle market firms, the chief executive must make sure the bridges are built internally for collaboration to happen.

How is your company building out its social media presence?

Rob Carey is an NCMM contributor and a features writer who has focused on the business-to-business niche since 1992. He spent his first 15 years at Nielsen Business Media, rising from editorial intern to editorial director. Since then, he has been the principal of New York-based Meetings & Hospitality Insight, working with large hospitality brands in addition to various media outlets.