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How to measure online return on investment (roi)

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  • 1. How to Measure OnlineReturn On Investment (ROI) By Vibrant Internet Marketing June 15, 2012All rights reserved. No portion of this document may be used without express permission of the author. Vibrant Internet Marketing is available to provide customized presentation to help your business be successful. For more information Contact me here.
  • 2. How to Measure Online ROI• Step 1: Define your termsBy definition, return on investment is the measure of an activity’s results relative to its cost. The equation for determining ROI, in its most simplistic form looks like this: (Results – costs) / costs = ROI
  • 3. How to Measure Online ROI Use Customer Lifetime Value and Cost Per Acquisition to help you make ROI determinations CLV = The amount of revenue you expect to received from each customer during your relationship with them( $ per month x 12 months x ? years or months) CPA = Allowable cost per acquisition CPA should not exceed 10% of your CLV
  • 4. How to Measure Online ROI• Step 2: Establish goals and benchmarksHaving a great social media presence is a means to an end. Engagement is worthwhile, but it’s important to remember that such communication serves a larger purpose.
  • 5. How to Measure Online ROIWhat are the goals of your social media marketing campaign?A. Get FoundB. Drive TrafficC. Convert visitors to customersD. Use metrics to analyze and adjust campaign
  • 6. How to Measure Online ROIA. What are the key performance indicators? (KPI’s)A. What are the benchmarks for your company’s social media campaign?
  • 7. How to Measure Online ROI• Step 3: Implement and experimentOnce we’ve determined our goals, identified key metrics and established performance baselines for those metrics, we’re ready to start tracking your social media ROI. – Measure regularly – Use promotions to identify and track brand interactions – Track and analyze user sentiment
  • 8. Social Media MetricsQuantitative Qualitative• Number of: • Types of – Twitter followers – Facebook fans – Comments – Page views – Social bookmarks – Inbound links – Click-throughs – Ratings – Leads generated – Reviews – Downloads – Growth rate – Conversions – Likes/Favorites – Positive and negative – Geographic distribution of sentiment surrounding your mentions brand – Viral video activity – Bounce rate
  • 9. How to Measure Online ROI• Step 4: EvolveUse social media to improve your entire business by fueling innovation, collaboration and improved efficiency.