Social Media ROI Explained

09/17/10 Director of Marketing, ReachLocal President, Social Media Club of Dallas Organizer, Ignite Dallas @MikeDMerrill #OPTSUM #ROI

I Know I Saw My ROI Around Here Somewhere

Marketing has dramatically changed 09/17/10

From Interruption to Conversation… 09/17/10

09/17/10 “ If your target market is humans, then you should be using Twitter” - @unmarketing #OPTSUM #ROI via @MikeDMerrill

Are You Even Measuring ROI? 09/17/10

What Are You Measuring? 09/17/10

Measurement is Improvement! 09/17/10

09/17/10 Right or wrong, web traffic is the leading metric used today to measure social media success #OPTSUM #ROI via @MikeDMerrill

09/17/10

The Equation 09/17/10 ROI= (Gain from Investment – Cost of Investment) Cost of Investment

Two Ways to Connect the Dots for ROI
Cause
Correlation
09/17/10 Profit Investment

What is your Financial Goal?
Increase Revenue
Increase in new customers
Increase in average revenue per sale
Increase in revenue from existing customers
Reduce Costs
Lower Cost of Customer Acquisition
Lower Cost of Customer Service
09/17/10

Evolution of Measurement
Non Financial
Offsite
Clickthroughs
Facebook Fans
Facebook Comments
Twitter Followers
Retweets
YouTube Views
YouTube Comments
Sentiment
Mentions
Social
Press
Non Financial
Website
Unique Visitors
Page Views
Time on Site
PageRank
Non Financial
Conversions
Contact form
Inbound Calls
Downloads
Event Registrations
Opt-in to email
Subscribe to Blog
Register for Online Community
Employment Apps
In-Store Visits
Support Calls
Returns

Map Activity Timeline 09/17/10 Month 1 Month 2 Month 3 Month 4 Activated Twitter Added Twitter to Website Published Fan Page Added Fanpage to Website Press Release Published Blog Post Tweeted new offer Published Blog Post Posted Promotion to FB Spoke at Conference Held Webinar Industry Analyst Mentions Product Launch Leaked picture of product on FB New Product Announced Customer Case Study Comment o Fast Company Blog Posted First YouTube Video Posted pictures to FB Fan Page Publish Blog Post Announce Quarterly Earnings
Overlay non-financial and financial to activity
# of transactions, in store visits, coupon redemptions
Revenue
Adapted from Olivier Blanchard at http://thebrandbuilder.wordpress.com

Define Your Success Metrics 09/17/10 Adapted from Olivier Blanchard at http://thebrandbuilder.wordpress.com

09/17/10 Look for correlation by overlaying social media metrics with financial metrics over the same time period #OPTSUM #ROI via @MikeDMerrill

09/17/10

Lifetime Customer Value 09/17/10 Years Total Revenue
What is the value of a new customer?
Initial sale
Repeat business
Up-sell
Referrals
Knowing this value helps you…
Determine how much to spend to get a new customer
Focus your marketing budget on the most cost-effective tactics
Develop plans to increase repeat business
Create programs to reward customer loyalty
Offer incentives to drive referrals

Lifetime Customer Value - Example Avg. sale per customer Avg. repeat sales/year Avg. years as customer Special one-time purchases Lifetime customer sales Avg. value of referrals Total lifetime customer sales Gross profit margin Lifetime customer value Program cost Customers to break even 09/17/10

09/17/10 In order to measure ROI of marketing investments, you need to know Lifetime Customer Value #OPTSUM #ROI via @MikeDMerrill

Basic Online Metrics 09/17/10 Adapted from Paul Gillen at http://www.slideshare.net/pgillin/social-marketing-roi-yes-you-can Lifetime Customer Value (Revenue x Longevity) x Margin Conversion Rate New Customers Visits / Leads Value of a Visit / Lead Visitor x Conversion Rate x LCV

Applying ROI to Value of a Visitor 09/17/10 Adapted from Paul Gillen at http://www.slideshare.net/pgillin/social-marketing-roi-yes-you-can Monthly Visitors 10,000 Conversion Rate 5% Lifetime Customer Value $5,000 Calculation 10,000 * .05 * $5,000 Value of each visitor $25

Value of a Blog 09/17/10 Adapted from Paul Gillen at http://www.slideshare.net/pgillin/social-marketing-roi-yes-you-can ROI= ($25,000 – $6,000) $6,000 316% Monthly Search Traffic 5,000 Estimated Traffic w/Blog 6,000 Value of a visitor $25 Monthly value of a Blog $25,000 Monthly Blog Expense $6,000

09/17/10

Case Study - Large 4 YR University in OK 09/17/10 Increase in Web Visits Increase in Twitter followers Increase in Revenue

McDonald’s Foursquare Campaign Brought in 33% more Foot Traffic 09/17/10
Foursquare day 4/16
Randomly posted $5 and $10 coupons
Media published and promoted
Investment $1,000

Brooks Stone: 1 Cast per month
No website
No online marketing
No voice
No reach
September 2009
4289 unique visits
#1 Google result for ”Connecticut Stonemason”
#1 Bing result for ”bluestone paths ct”
#1 Yahoo! result for ”ct shoreline stonework”
June 2010 I’ve gotten more projects in the first half of 2010 than all of 2009 “ “ - Josh Brooks, Owner

Four Firkins: 1 Cast per day
Static website
Infrequent updates
700+ Facebook fans
250+ Twitter followers
August 2009
120+ Visits/Day
66 Clicks on Twitter from 1 Cast
50,000+ visits in 9 months
2,326 Facebook fans (330% Increase)
1,113 Twitter followers (440% Increase)
Engagement on every Cast
June 2010 50% of my store traffic comes in as a direct result of my daily cast “ “
Jason Alvey, Owner

AJ Bombers
1 year old Café – Milwaukee
Growth was static for first 6 months of business (+/- 5%)
Started using Twitter
Tweeted specials
Asked for menu suggestions
Ran competition for new menu item
January 2010 started using Foursquare
Offered Mayor specials
February 2010 hosted “Swarm” event (50 people checking in)
1 hour prior ran a training session for non-foursquare users – 50 people showed up for training
165 showed up for the event
Growth now running at 110% per month over previous months

Connect With Simon @incslinger [email_address] Book Now available for Pre-Order at Amazon.com save $8 NOW

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Promote standard technologies,
Encourage ethical behavior, and
Share best practices.
Social Media Club hosts conversations that explore key issues facing our society as technologies transform the way we connect, communicate, collaborate and relate to each other.

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Upcoming SMC Dallas Events
October 7 th , 2010
Screening “The Social Network”
Sponsored by @bizzydallas
October 21 st , 2010
Social Media Tips and Tricks
November 18 th , 2010
Amber Naslund @ambercadabra
December 8 th , 2010 Holiday Party

Let ’s Connect and Follow Each Other
09/17/10 @MikeDMerrill http://www.mikemerrill.com http://www.mikemerrill.com/linkedin http://www.mikemerrill.com/facebook [email_address]

Social Media ROI Explained

by Mike D. Merrill on Sep 17, 2010

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Social Media ROI Explained — Presentation Transcript