Social Enterprise

Retailer Zappos invests big in social media, but understands its limits

ZDNet has a new case study on how online retailer Zappos has invested a six-figure sum in social media, even though it cannot quantify the ROI. Download the full report and take our poll on whether your company invests in social media.

Tom Steinert-Threlkeld over at ZDNet (TechRepublic's sister site) has put together a case study on how online retailer Zappos has invested a six-figure sum in social media. What's interesting is that Zappos considers the program to be a success, even though it cannot quantify the ROI.

Here's a quote from the report that helps put it in perspective:

While a typical 30-second ad costs $125,000 in prime time, Zappos estimates the cost of reaching out to past, present or potential customers in these micromedia at $300,000 a year - or less than three-hundredths of one percent of its $1 billion in annual sales. It's not even looking for a return on that investment. "We don't assign metrics to it," Zappos CEO Tony Hsieh says. "It's really just about our unwavering belief that making the customer happier is going to win in the long run."

One of the interesting takeaways from the report is that even though Zappos is a pioneer in the use of social media, the company still keeps it in perspective. For example, Hsieh believes that phone and email are still far more important and effective than any of the social tools that Zappos is experimenting with. To find out why, download the full PDF of the report here on TechRepublic.

Further reading:

This is a topic that TechRepublic is very interested in since we are both an online trade publication and a peer-to-peer social network for IT professionals. We are an "at work" site that is designed to help IT pros improve their skills and their career, and we also serve as a middleman to help connect technology workers and IT vendors. So there are many companies in the technology space that consider time and resources spent on TechRepublic to be an investment in social media.


Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the book, Follow the Geeks.

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