I enjoyed reading Dan Zarella's post “New Data: 'Engage in the Conversation' May Not Actually Work" very much. It made me think- would such a recommendation ever be enough to run an ongoing social media effort for YOUR business?
What ultimately makes "enagaging in the conversation" actually work is the ability to drive action from followers/fans. What are those actions? Why are they important to your brand or product?
If you posted 100 tweets about the industry/your firm and then saved one sale with 10 @replies, that's only 10% reply percentage, whcih Zarella's charts imply is low. Is it? If it moves your business, you can't argue it's not working.
Agreed, in my example we don't have any data about operational costs or incremental revenue, but every business is different, even if you're selling unicorns. Concentrate opn what your customers want, and track whether you're delivering it.