A prospective client asked me this yesterday: “I read through it [referring to this post] and was looking for how it translates into measurable business benefits such as client satisfaction, increased inside sales, increased referrals, etc – can you point me to any of these indicators with regard to this AGCO initiative?”

As I ponder how to respond, I’m considering these words of wisdom from Mitch Joel on the topic of social media ROI…

“How do you measure success? If this were a high school cheer, it would probably end in: “R-O-I!”

Ahh, the elusive ROI is Social Media. If yesterday’s Blog post (Social Media Gurus – That Old Chestnut) didn’t provoke some thought and commentary, then trying to crack the elusive Social Media ROI will surely get your noodle boiling. Richard Binhammer (from Dell’s Social Media team) gave a private presentation yesterday and when one of the audience members asked about how Dell measures the ROI of their Social Media strategy, Binhammer responded that ROI was nothing more than an accounting term and probably has little to no place when it comes to measuring the success of any Social Media marketing initiative.

How would that make your clients, team members and supervisors feel?

Pushing Binhammer’s comments further, he also said that if you’re looking for the ROI in the campaign, you’ll probably spend too much time, budget and energy just trying to figure out what your definition of ROI is, and concluded by saying that he doesn’t think about ROI, rather he looks at the overall business objectives and if Social Media can help him meet those objectives, then that is what is ultimately the most important thing.

Let’s repeat: forget the ROI and look at the business objectives.

In looking at business through this prism, Dell has changed the way they do business and – in doing so – they have made lots of money by being engaged and using everything Social Media that is under the sun. In a more primal way, they’re focused on using Social Media to meet practical business objectives and not looking at the overall ROI. In thinking about Social Media and how it can help in overall business objectives, it does make things a lot easier to swallow.” Source: Killing ROI | Six Pixels of Separation – Marketing and Communications Blog – By Mitch Joel at Twist Image

Binnhammer’s perspective means alot as Dell is one of the few major brands that are thriving in a down economy. Coincidentally, they are ranked #2 for ‘deep brand engagement’ amongst the 100 most valuable brands as ranked by the ENGAGEMENTdb study which concludes that ‘deep brand engagement correlates with financial performance’…

Relative to AGCO, do I have data that shows that a customer purchased a new combine as a direct result of a video we posted to YouTube? Hardly. What we do see at AGCO is this: Stock has risen since the time AGCO actively engaged in social media…

“SmarTrend identified an Uptrend for AGCO (NYSE:AGCO) on October 27, 2009 at $29.61. In approximately 3 months, AGCO has returned 9.1% as of today’s recent price of $32.31.

AGCO is currently above its 50-day moving average of $31.71 and above its 200-day moving average of $29.11. Look for these moving averages to climb to confirm the company’s upward momentum.

SmarTrend will continue to scan these moving averages and a number of other proprietary indicators for any shifts in the trajectory of AGCO shares.” Source: AGCO Upward Momentum Looks to Continue (AGCO) – Comtex SmarTrend Alert

Is there any other more important measurement?

I don’t claim for one minute that AGCO’s momentum is due entirely to social media. I do claim that it has a lot to do with the social media ‘state of mind’. Snap! I went there, as my teenage son would say. What I mean is this. When business results start going south, someone within the organization will usually say ‘we need to return to the ‘blocking and tackling’ [or fundamentals or get back to basics] of our business. One of the fundamental disciplines of social media is listening to what the internet as a whole and customers in particular are saying — the most fundamental of all business fundamentals and the first thing that successful companies have historically stopped doing!

More to come…