Paul Gillin: #BTG11 ConferencePresentation Transcript
Unraveling the Mysteryof Social Marketing ROI Paul Gillin, author The New Influencers Secrets of Social Media Marketing Social Marketing to the Business Customer
Is it Return on Investment or Risk of Inaction?
It’s Simple, Knucklehead (GAIN FROM INVESTMENT - COST OF INVESTMENT) ROI = COST OF INVESTMENT
Types Of Financial Impact B. Costs Avoided A. Revenue Anything that leads to A or B, But only if you can directly equate its value to an action
These are NOT ROI Press coverage Impressions Website Visitors Video views Click-throughs Retweets Coupons distributed Store visits “Buzz” Friends Blog comments Employment applications FaceBook friends Twitter followers But if you can quantify their financial impact, you have ROI!
What You Need Historical Metrics Excellent CRM Tools and Practices Clearly Understood and Applied Web Analytics
Basic Business Metrics Lifetime Value of a Customer = (Longevity *Revenue) * Margin
Value of a Lead/Visitor = Visitor * Conversion Rate * Lifetime Value
Okay, Let’s Make it Real Typical customer Moe spends $10,000/year with you Moe is with you for five years Your profit margin is 10% Lifetime value of Moe is ($10,000 * 5) * .1 = $5,000
CRM Essentials Must be used by everyone who touches the customer Must document online, offline and landline communications Must span the engagement lifecycle Must enable segmentation and grouping
Web Analytics Must track individual visitors Must document paths to desired destinations Must identify referring sources You must use them
Applying ROI: Value of a Visitor
Value of a Blog
Value of a Tweet
You send 50 tweets a month…
Generating 1,000 visitors to your website…
2% of whom become leads…
5% of whom become customers.
Therefore, the value of a tweet is: (1,000 * .02 * .05 * 5000)/50 = $100
Cumulative ROI: the Eye Chart You want to launch a customer support forum to reduce your costs of telephone support Estimated admin costs: ½ FTE yr 1, ¼ FTE yr 2 1/10 FTE yr 3 Estimated savings: 1 FTE yr 1, 1.5 FTE yr 2, 2 FTE yr 3
Measuring the Immeasurable Headline Counts Lift Studies Store visits Speaking Invitations Net Promoter Score Coupons redeemed Employment applications If You Can Measure It, You Can Calculate Its ROI