FourSquare And Social Media ROI
I think my comment on Matt Stigliano’s FourSquare post deserves a bit more explanation.
First, I want to say that I am not a FourSquare fan. It’s partially because I think geolocation will be better served inside a larger social network, like Facebook. It’s partially because my wife hates geolocation and sees it as potentially dangerous. But it’s also because Foursquare allows anyone to input anything they wish. And since it’s a game, it allows people to cheat, easily. And a few people I know cheat, openly. They know who they are. So, I’m not even going to begin to argue the merit or lack of merit in investing time playing Foursquare.
The Quesiton of ROI
It’s not surprising that the conversation in the comments on Matt’s post quickly turned to ROI. Bob Wilson rightly questioned the value of spending any time at all on Foursquare under the assumption that it would “bring you business” and said, “I guess I’m growing weary of all those who keep pushing sm as a biz model for selling real estate who are unable or unwilling to provide real numbers that demonstrate the value or ROI.” He then quickly added, “Oh, wait. I forgot that you are not supposed to ask about ROI when it comes to SM”
I always find it humorous when someone says that. I’m not sure who made this “don’t talk about ROI with social media” rule, but I’m thinking it was somebody who doesn’t understand the nuances of analyzing return on investment in marketing or what can or should be measured in the first place.
The Problem With Most Social Media ROI Discussions
The problem I see with most of the discussions around social media ROI in the real estate industry is that the product real estate agents sell, a house, is not an impulse buy and the decision to use one agent over another, a completely different kind of conversion, is not a simple decision. If they were, we could focus on conversion alone and be done. But they’re not. So, the focus on conversion to the exclusion of all other sales or marketing objectives is simply wrong. It fails to address the big picture. In real estate, the “conversion” is proceeded by multiple touch points of exposure. Those touch points can include print advertising, direct mail, email, a phone call and yes, social media. Each exposure, each touch, each conversation, plays a significant role in helping the customer move from awareness of the “product”, whether that’s a house or an agent, to the intention to “buy.”
The key to evaluating the merit of any tool, social media or otherwise, is understanding where that tool (and the behaviors it facilitates) fits in the acquisition, persuasion and conversion cycle. Focusing on conversion alone will simply result in a lack of investment in acquisition- or persuasion-oriented initiatives. Just as an unbalanced focus on acquisition initiatives will result in a lack of investment in conversion tools and behaviors.
Marry that with the absence of a clear marketing goal (even the simplest of goals) and poor to no analytics and you have a recipe for disaster. In the business environment, engaging in any activity without an understanding of what you hope to achieve as a result of that activity makes it impossible to measure the success of that activity. The goal can be as simple as “lead people to my blog post.” That’s measurable. Did my efforts lead people to my blog post or not? Did my advertising bring more visitors, did organic search bring more visitors or did my tweets bring more visitors? How do I make sure I can measure the impact of each effort? And that can’t be the end. There has to be some understanding of a path to conversion. After they came, who stayed longer? Which channel moved more visitors to the next step in my conversion process? Do I know what that next step is? Subscribe to my blog? Search my IDX? What is it?
Tools Are Just Tools
Tools aren’t strategy. Tools aren’t behavior. Tools don’t do anything without someone using them. Some use them well. Some don’t. Some tools probably shouldn’t be used for business at all. And in a business context all tools are worthless without a plan. Where do the different tools and behaviors fit for you? Where does Twitter fit into the cycle? What about Facebook? Where does advertising fit? Where does your phone fit into the cycle?
And, by the way, do you know the ROI of your phone? 
So loved our discussion about diversity of thought and how some are capable of linking two very different spaces to find a commonality of thought that provides that sought out “top of mind”…..crucial for the real estate industry.
…don’t get me started on Foursquare
Ines… “Associating: The ability to connect seemingly unrelated questions, problems or ideas from different fields.”
“Not a fan of Foursquare” says the guy who is mayor of a gas station…
fwiw, I haven’t found an application for Foursquare that I’d consider investment nor one where i’d expect any return. Sometimes, we just play games. Ok, no? I dig foursquare’s ability to track the good restaurants I go to. I find far more utility than, say, yelp.
I dunno who says you’re not supposed to ask about social media ROI either. I have stacks of data for the ROI of our social media efforts. We talked about this on a panel at blogworld. My position is not that you’re not supposed to ask about ROI, but that you shouldn’t get too hung up on the process of measurement.
The sample size of real estate leads and closings is far too low – so measurement is based on false precision. You need a sample in the thousands before you know whether a given activity has impact. For example if you have 10 leads and close 1 deal, it’s false to say 10% conversion. Your actual rate over time could be waay lower (or higher) and you just had a random bit of early luck. Now if you have 10,000 leads and convert 1000, you have a pretty good feel that you’re at 10%. If you try a tactic and the rate goes to 900, stop. If it goes to 1100, do more.
Without that size, you just have to use your gut. That’s OK, it works in social media like it does in other things you measure with your gut, like networking meetings, or whether you do open houses.
1) Let me try this (SM thing, networking group, PTA, whatever).
2) I like this vibe. It feels good. I like the people. I don’t feel like I’m in the Chamber of Commerce meeting with a bunch of other mortgage sales guys.
3) I didn’t get any business today/week/month but I’ll keep trying. – I know people who do.
4) Every once in a while you ask yourself if you feel like going back.
Your gut can be a useful ROI gauge.
You can actively measure things that have that kind of volume, like web site visitors. And if the visitors are high enough, lead conversions from there. Measure those.
Otherwise don’t get too hung up on measurement. Did you get some business? Do you feel like more’s coming? Rock on.
We will, however be taking a closer look at the Foursquare API.
I have heard several good conversations this past year about “top of mind” and “branding” using today’s tools vs. tools of just a few years ago. While effective branding and awareness campaigns require a lot of work, the hard dollar costs of hiring a PR agency or large media buys etc. can now be done in other ways. Actually, to be really effective, I believe a combination of “new” and “old” is really where people get the best return.
In this post, you link to a few people that have taken branding to amazing levels. Let’s use Ines as an example. Seriously, who could think of Miami real estate without thinking of “Miamism?” That blog is an AMAZING resource for people looking for real estate in the area. Rick and Ines have MANY social media sites pointing to their main site. The amount of work that goes in to creating something like this is undeniable yet it is one of the best branded names/sites I can think of. If Ines wants to play on Foursquare I say, “great!” Does that specific “tool” really need to provide an roi? Can it really be measured? Who cares??? The fact is, I am willing to bet that building a brand has been a benefit for her and will be for a long time. I have never asked Ines how many homes she sells from her blog and to be honest, I really don’t care. BUT, should I ever have a client moving from Tempe to Miami, I guarantee that I can refer them to someone that has a market knowledge and will be of a benefit to that person. Yes, there is value in that…
I wish I could say I’m proud of that mayorship, Mike.
Perhaps it would have been more accurate to say “not a Foursquare fanboy.” That would have made for a better link to that post as well. Yes, sometimes we just play games. Unfortunately, the minute someone says, “this is a business tool,” there needs to be some justification for that comment.
I think the process of measurement should be invisible, for the most part and I agree with your comment in full. Besides being difficult to argue with a guy who plays with data for a living, for the individual real estate agent, your gut method should be fine for gauging conversions. And I do think, for those who are paying attention, the gut can be a good guide.
My point is that conversions may not even be the right thing to directly measure, whether your an individual real estate agent or a corporation. As you say, “if the visitors are high enough, lead conversions from there.” The social media measurement in that example would be hits to the website from the social media space. Other tracking methods on your site would take over from that point.
I’m in your wife’s camp– I do not like geolocation, based on my feelings about eroding privacy by consent (& other issues)– ROI (if any) be damned. In fact, when the Metrocard was first introduced in NYC, the city kept track of where folks traveled. I refused to buy the card. It was later stopped & more cards were sold(& I bought mine). I do use geolocation apps (like Snikkr) but always feel the folks offering the service are looking over my shoulder– so I mess with my location. In the 60s, we thought Big Brother was the government– it turns out he’s us.
I love geo-location, so long as I can control whom I share it with. I’ve always been an outdoors kind of guy. I can say with 100% commitment that, if I take the time to take a picture/video when outside, I am doing so for other people (I can’t stand stopping in the middle of a workout and wouldn’t do it unless I was intending to share with others). I want my friends and family to experience what I am seeing, most times in the middle of nowhere and potentially in a place that many of my pals/loved ones might never be. Therefore, geolocation is the icing on the cake: nothing brings context to my shots more quickly.
As for social media and ROI, I literally vomit when I hear people say “social media” to describe themselves as professionals. Live life, enjoy it, partake in debates and share with others. Those that enjoy your company are the most likely to do business with you.
Nick, Christian, Joseph… I love this conversation. I think I’ve made my opinion on this pretty clear over the years. I use social media tools that have no business ROI whatsoever. Some things are just social.
And it’s also true that we choose to use some tools specifically to bring new business or new business relationships. How we approach that as an individual is different than how a company might approach them. As Mike points out, sample size matters. I attended the Ford Fiesta Movement party last night in Hollywood. It was a mainly social media driven event. But they also spent some serious money on the party. The need to measure the impact of that investment is real for them. As mid-sized business moves into the space, they will need to do the same thing. But what can and should be measured relative to social media involvement?
The focus on conversion alone is wrong. That much I can say with authority. Each situation, each business, each behavior in each network needs to be looked at differently.
I’m mayor of a gas station on Foursquare, this is true, and I have no plans to try and determine the ROI on that. Not yet anyway.
I think that says it all right there. I’m more than just a real estate broker. I don’t have an “online persona” that is separate from myself. I am who I am, and if I want to play games in my free time, then damn it I’m gonna. I cant help it if a potential client doesn’t agree with how I spend my time. In fact, it’s probably better if I lose that client because we probably won’t get along anyway.
ROI is needed for something that is a pure investment in your business – if it ain’t working, then stop dumping your money/time into it and move on. Social Media is such a broad world that there is no way you can measure the ROI for each individual BS little thing that you may be doing. I find most RE sales people are splitting their time on SM between the personal and professional (ie: being social for a time and then blasting out tweets on their new listing or updated market stats). Unless you separate your focus between accounts specifically for work or fun you really can’t have an accurate measure.
To me, the whole point of SM is the interaction with people (both personal and professional) and, hopefully, the gain in mind-share. I can easily calc the ROI on a post card campaign, or a specific website designed and funded to draw clients in but when someone says “I was looking for a local agent and you’re all over the internet” that is priceless.
Google never forgets … I’ve googled my name and came up with comments I left on message boards 10 years ago that had nothing to do with business. If a client asks me for a resume or more info about me I’ll point them to Google and they can find out a lot more than I may even remember myself.
Jeez, if I was worried about the ROI of everything I did I probably wouldn’t even get out of bed. Be yourself, have fun, clients will come. Measure what is measurable and what deserves to be measured … but remember, some things are just social. (I love that!)
just wanted to stop by and say wow Nick – thank you! (means a lot coming from you)
….and just to play devil’s advocate here…..what about perception? how many things do we do as professionals that are done purely for the sake of perception. We’ve talked about this before Jeff. The top producer in my office who said they have never made a cent off a newspaper ad and the only reason they continue is “perception”. There is power is “top of mind” and there is power in “ubiquity”, go measure that!
Jeff, I do hope you dont assume that I suggest only to focus on conversion.
Bob… heck no. But I did think you were right to ask.