I posted the answer below on LinkedIn in a thread called: Social Commerce the next big thing?.

ROI is always important, but I think the issue at this stage of the social commerce experience the difficulties is in identifying the ROI + vs -.

It’s straight forward to do the simple math of how much you took in vs how much you gave away, but there are other numbersthat need to factored in, but they may be tough to qualify.

Off the top of my head, so please add others:
Some positives:
1) After the buyer gets the $X of product for the $Y they spent, did they by more?
2) Did they come back again?
3) How about the publicity of being promoted to all the subscribers and then virally to the friends of the buyer

Some negatives:
1) Need to generate more margin to make up for discount
2) discounts bought by clients who would have paid full price anyway (make it sound like a ‘treat’ for them in the copy)
3) Does discount hurt the brand? Could it turn people into ‘waiters’? That wait until deals come out before they come back?

Related articles

• 89% of People Who Bought Groupon Movie Deal Would Not Have Seen The Movie Otherwise (socialtimes.com)
• Social Media and “Channel Marketing” (customerthink.com)