Social Marketing ROI - Yes, You Can!

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Anything that can be measured can be used to calculate ROI, and that includes social media. Many people say the ROI of social marketing can't be measured, but I beg to differ. Here are some guidelines for measuring the value of a visitor, a community and even a tweet!

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Social Marketing ROI - Yes, You Can!

  1. 1. Unraveling the Mysteryof Social Marketing ROI<br />Paul Gillin, author<br />The New Influencers<br />Secrets of Social Media Marketing<br />Social Marketing to the Business Customer<br />
  2. 2. Is it<br />Return on Investment<br />or<br />Risk of Inaction?<br />
  3. 3. Itโ€™s Simple, Knucklehead<br />(GAIN FROM INVESTMENT - COST OF INVESTMENT)<br />ROI = <br />COST OF INVESTMENT<br />
  4. 4. Types Of Financial Impact<br />B. Costs Avoided<br />A. Revenue<br />Anything that leads to A or B,<br />But only if you can directly equate its value to an action<br />
  5. 5. These are NOT ROI<br />Press coverage<br />Impressions<br />Website Visitors<br />Video views<br />Click-throughs<br />Retweets<br />Coupons distributed<br />Store visits<br />โ€œBuzzโ€<br />Friends<br />Blog comments<br />Employment applications<br />FaceBook friends<br />Twitter followers<br />But if you can quantify their financial impact, you have ROI!<br />
  6. 6. What You Need<br />Historical Metrics<br />Excellent CRM Tools and Practices<br />Clearly Understood and Applied Web Analytics<br />
  7. 7. Basic Business Metrics<br />Lifetime Value of a Customer = (Longevity *Revenue) * Margin<br />๐‚๐จ๐ง๐ฏ๐ž๐ซ๐ฌ๐ข๐จ๐งย ๐‘๐š๐ญ๐ž=๐๐ž๐ฐย ๐‚๐ฎ๐ฌ๐ญ๐จ๐ฆ๐ž๐ซ๐ฌ๐•๐ข๐ฌ๐ข๐ญ๐ฌ/๐‹๐ž๐š๐๐ฌ<br />ย <br />Value of a Lead/Visitor = <br />Visitor * Conversion Rate * Lifetime Value<br />
  8. 8. Okay, Letโ€™s Make it Real<br />Typical customer Moe spends $10,000/year with you<br />Moe is with you for five years<br />Your profit margin is 10%<br />Lifetime value of Moe is<br />($10,000 * 5) * .1 = $5,000<br />
  9. 9. CRM Essentials<br />Must be used by everyone who touches the customer<br />Must document online, offline and landline communications<br />Must span the engagement lifecycle<br />Must enable segmentation and grouping<br />
  10. 10. Web Analytics<br />Must track individual visitors<br />Must document paths to desired destinations<br />Must identify referring sources<br />You must use them<br />
  11. 11. Applying ROI: Value of a Visitor<br />
  12. 12. Value of a Blog<br />
  13. 13. Value of a Tweet<br /><ul><li>You send 50 tweets a monthโ€ฆ
  14. 14. Generating 1,000 visitors to your websiteโ€ฆ
  15. 15. 2% of whom become leadsโ€ฆ
  16. 16. 5% of whom become customers.</li></ul>Therefore, the value of a tweet is: <br />(1,000 * .02 * .05 * 5000)/50 = $100<br />
  17. 17. Cumulative ROI: the Eye Chart<br />You want to launch a customer support forum to reduce your costs of telephone support<br />Estimated admin costs: ยฝ FTE yr 1, ยผ FTE yr 2 1/10 FTE yr 3<br />Estimated savings: 1 FTE yr 1, 1.5 FTE yr 2, 2 FTE yr 3<br />
  18. 18. Measuring the Immeasurable<br />Headline Counts<br />Lift Studies<br />Store visits<br />Speaking Invitations<br />Net Promoter Score<br />Coupons redeemed<br />Employment applications<br />If You Can Measure It, <br />You Can Calculate Its ROI<br />
  19. 19. Thank You!<br />Site: gillin.com<br />Blog: paulgillin.com<br />Twitter: pgillin<br />Paul Gillin<br />508-656-0734<br />paul@gillin.com<br />

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