This post is a continuation of a series that I am doing on gaining a return on effort and money spent in social media (ROI). In the last post in this series I had made the following statement:

The level of success in social media (as determined by ROI) is directly proportional to the speed at which you gain trust among your audience, the social nature of your products/services, and the nature of your social network traffic conversion funnel (sales funnel). Don’t confuse a social network traffic conversion funnel with traditional Internet marketing tactics.

Now let me elaborate on that statement a little bit…

For example, if you spend 1 man hour in social networks to gain 1 newsletter subscriber then obviously your return on time investment is not worth the effort. You need to re-think your strategy because nobody is paying attention to you. How much is a new subscriber worth to you? $1, $2, $5, $100?

If your newsletter subscribers are worth $1 each then 1 hour of time to gain 1 new subscriber is not efficient unless your time is valued at $1 per hour… Right?

It seems that many people are mistakenly making this assessment of their social media effort without looking at the bigger picture and these same people are spreading the message that social networking is “not worth the effort”.

It is easy to see how this assessment could be made but this false assessment fails to include a crucial element I call the “compounding of community”. To use an analogy let’s say that you have opened up a new bank account that offers a 10% daily return on money you have on deposit. Now let’s suppose that you deposit $1. The $1 represents one friend, follower, contact, etc. that you have gained in a single social network.

Now in order to earn your 10% daily return you need to communicate with your new friend and work to “deepen” the relationship by commenting on or contributing to something that is very personal to them such as:

  • Content they wrote (most favored)
  • A picture they posted
  • An upcoming birthday
  • Anything personal created by the friend or personal to the friend

Now, according to the law of reciprocity, that friend owes you the same favor in return. This is how you gain your interest on the $1. This is the “unwritten law” … In networks like Digg where diggs are not so much granted by the nature of the content submitted, they are granted because of the law of reciprocity. Power Digg users understand this law and use it to get their stories dugg to the front page. Content is a secondary consideration… relationships are primary. These relationships multiplied by hundreds or thousands is where success in social media is derived. The law of reciprocity = interest in the social media bank.

I understand that not everyone will reciprocate, some are very busy, some are very egotistical, some just don’t care… This is human nature so you have to consider that the interest you gain on your “friend in the bank” ($1) is not going to be 100% … more like 10%. Of course it is impossible to reciprocate in this manner with everyone that becomes a friend or follower, that is another reason why the return is not 100%.

What is the value of compounding of community through the law of reciprocity?

  • You build and foster strong relationships and “true fans”… this is a true asset.
  • You empower your friends and followers to crowdsource your content through the law of reciprocity.
  • Reciprocity gives you powerful search engine visibility giving you an increase in search engine traffic with every blog post you make (or web page you publish). This happens because others bookmarking and sharing your content increases “NATURAL” incoming links to your content.
  • Reciprocity gives you more than one listing in the search engines for your keywords/phrases because your content is referenced from more than one place because it was submitted by more than one person to multiple locations.
  • Reciprocity gives you direct and targeted traffic from the friends and followers of others becuase your content appears in places submitted by your friends.
  • Reciprocity gives you positive votes in the eyes of powerful people with whom you have reciprocated in the past. This is a strong case for adding valuable comments to the blogs of those who already have a large following. This is a strong case for linking to others’ blogs from your blog posts so they will see what you have to say and return the favor at some point without your asking.

The law of reciprocity is the basis of all friendships and trust. It is how you network like Paul Revere and Quincy Jones. If someone links to your blog post, don’t you always look to see what they wrote? Do you not feel a very human obligation to return that favor at some point down the road if not immediately?

Do you not “remember” that person? Have they not branded themselves in your mind?

The point is to acknowledge the friends/followers which speeds up the process of gaining trust. By commenting on the friends content (or any other personal item), the law of reciprocity will cause the friend to feel an obligation to return the favor. This is how you gain more comments on your content. This is how you get others to bookmark it, share it, digg it, link to it, etc., etc., etc. This is how you build a following of people that trust you. This is how you accelerate the process of gaining trust. This is how you brand your name and image (avatar) in the mind of your community and make it synonymous with quality. This is how you build community.

It takes time to build a community of trusting friends, followers, contacts, acquaintances, etc. Before you can expect a favorable return on your social media investment, you have have to build your communities in this manner.

To use an analogy, you can’t expect a new home to protect you from the rain until the roof is built. In a similar manner you can’t expect a return on your social media effort until your communities are built. In this respect, you can’t gauge the effectiveness of your social media effort without first building the foundation.

Going back to my original statement…

The level of success in social media (as determined by ROI) is directly proportional to the speed at which you gain trust among your audience.

Element 1: The law of reciprocity is the tool that aids in “speeding up” the gaining of trust.

Also part of this statement is Element 2…

The level of success in social media (as determined by ROI) is also tied to the social nature of your products/services, and the nature of your social network traffic conversion funnel (sales funnel).

These two points are the subject of the next post in this series. I invite comments and questions to help clarify the point of this post.

What is your take?

Learn how to apply Social Media and SEO 2.0 to your business click here.

If you're new here, you may want to subscribe to my RSS feed. You may also follow my updates on Twitter.