Social Marketing ROI - Yes, You Can!

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
𝐂𝐨𝐧𝐯𝐞𝐫𝐬𝐢𝐨𝐧 𝐑𝐚𝐭𝐞=𝐍𝐞𝐰 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫𝐬𝐕𝐢𝐬𝐢𝐭𝐬/𝐋𝐞𝐚𝐝𝐬

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

Thank You!
Site: gillin.com
Blog: paulgillin.com
Twitter: pgillin
Paul Gillin
508-656-0734
paul@gillin.com

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Social Marketing ROI - Yes, You Can!

by Paul Gillin on Jul 21, 2010

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