Does social media build ROI by reaching out to new customers or is it primarily a customer retention tool? It depends who you listen to. Here are two points of view:

First a video documenting recent social media ROI examples, largely involving customer acquisition:

The second video states the point of view of Jeff Jaffe who makes a passionate case for using social media as a customer retention tool. But Jaffe has new customer acquisition in mind as well. But Jaffe's strategy is using social media to embrace existing customers, and through social media, giving them tools and motivation to become your new market advocates bringing in new customers.

Two valid points of view with the same ultimate goal. How they differ significantly is in how much emphasis is put on your existing customer base, and if you can put faith in turning them in your market advocates.

I'm with Jaffe on this one. While there is a lot of hype and "magical thinking" regarding social media, most often it embraces current customers best. They are the ones most motivated to participate. People who are enthusiastic about your competition's products, for whatever reason, are not likely to be following you on Twitter, reading your blogs, or visiting your Facebook page. Campaign style social media promotional campaigns where Facebook pages are used as landing pages for contests etc. do work, but like all promotions, their effect is short term. Social media is far more powerful in the long term when it is used as a long term trust and participation building tool.