Avoiding the Social Media Marketing Abyss - GoJeeno


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How do you go about measuring ROI in social media? Why is it so important? Why are so many marketers falling on their face? Is it really all about engagement? Do you need more followers?

This presentation answers these questions in detail, giving an overview of what is right and why.

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Avoiding the Social Media Marketing Abyss - GoJeeno

  1. 1. Social Media ROI: Avoiding the Abyss<br />What should I be measuring?<br />How do I monitor performance?<br />What’s the ROI?<br />Do I need more followers?<br />By VikramBhaskaranCEO and Co-founder, GoJeeno<br />
  2. 2. Why Go Social?<br />
  3. 3. The Face of Marketing… Today<br /><ul><li>Company Initiated
  4. 4. Every customer is directly acquired</li></ul>But what if… <br />…our customers were our evangelists?<br />Would we continue touching each customer directly?<br />
  5. 5. Social Media Marketing: How our Game Changes<br />People trust their friends more than an advertisement<br />Peer Pressure Sells!<br />…But where are these guys?<br />…How can we identify and harvest them?<br />You don’t need to sell to the world- just sell to the evangelists!<br />
  6. 6. It’s all about Networks<br /><ul><li>Social Network ≠ Social Media
  7. 7. Social Network is Made of
  8. 8. Individuals and Connections
  9. 9. Directed and Undirected Relationships
  10. 10. Information Conduits
  11. 11. Information flows through Relationships </li></li></ul><li>Get more followers, fans, likes and check-ins<br />Search and Solve customer issues<br />Simulate Viral Contests<br />Follow up, Purge and Apologize!<br />Life of The Social Marketer<br />
  12. 12. In Other Words..<br />What they should be<br />What they are<br />
  13. 13. Avoiding the Abyss<br />What we are measuring is WRONG<br />How then can strategies based on the wrong metrics give us the right result?<br />
  14. 14. The Business Truth<br />Your Business doesn’t really care about your number friends or followers.<br />What it really cares about is:<br />-That’s not just $$s today but $$s forever!<br /><br /><br /><br />Profitability<br />Future<br />
  15. 15. Sub-Optimal Marketing Resource Allocation<br />All customers are treated equal<br />𝐶𝑜𝑠𝑡 𝑝𝑒𝑟 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟=𝑇𝑜𝑡𝑎𝑙 𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔𝐶𝑜𝑠𝑡𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠<br /> <br />
  16. 16. Why Is This Wrong?<br />The 80: 20 Rule in Profitability<br />Top 20% of customers account for over 80% of profits<br />
  17. 17. Value Driven Marketing<br /><ul><li>The Concept
  18. 18. Allocate more resources to high value customers
  19. 19. Do not spend marketing investments on the loss makers</li></li></ul><li>What WeOverlook<br /><ul><li>The Power of Word of Mouth
  20. 20. The loss makers could be the customers that are evangelizing our products to the high rollers</li></ul>Not servicing ‘low’ Alex could mean losing ‘high’ Charlie as well! <br />Charlie, the review-reading High Buyer<br />Alex, the Super-Talker Low Buyer<br />
  21. 21. Identifying the Influencers<br />Social Profitability<br />(or) Dollar worth of Word of Mouth<br />= Net Present Value of Future Profits attributable to an individual’s influence<br />
  22. 22. From Influence to Profitability<br /><ul><li>Measuring Total Profitability of a Customer based on:
  23. 23. Direct Purchases made by customer
  24. 24. Purchases made by referrals
  25. 25. Purchases made by referrals’ referrals and so on
  26. 26. By capturing attenuation effect of Word of Mouth
  27. 27. Since my influence over my friend is more than that over my friend’s friend</li></li></ul><li>About Influencability<br />The proportion of a purchase attributable to influence<br />If I made a purchase for $100, and my own decision making was responsible for $30, the Influencability Ratio (for that purchase) is 70%<br />Influencability over each degree<br />70%<br />49%<br />24.3%<br />
  28. 28. Getting to Total Worth: Total Customer Value<br /><ul><li>Completely captures the value brought by a customer to a firm
  29. 29. 𝑇𝐶𝑉=1−𝐼𝑛𝑓. 𝑅𝑎𝑡𝑖𝑜 𝐼𝑛𝑑𝑖𝑣𝑖𝑑𝑢𝑎𝑙 𝑃𝑟𝑜𝑓𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦</li></ul>+<br />𝐼𝑛𝑓 𝑅𝑎𝑡𝑖𝑜 𝑋𝑇𝐶𝑉 𝑜𝑓 𝐼𝑛𝑓𝑙𝑢𝑒𝑛𝑐𝑒𝑒𝑠𝑁𝑜 𝑜𝑓 𝐼𝑛𝑓𝑙𝑢𝑒𝑛𝑐𝑒𝑒𝑠<br /> <br />(or Proportional Individual Profitability)<br />(or Proportional Social Profitability)<br />
  30. 30. How it Works<br />(1-Inf. Ratio) X π1<br />+<br />Inf. Ratio [<br />(1-Inf. Ratio) X π2<br />+<br />Inf. Ratio [<br />(1-Inf. Ratio) X π3<br />+<br />Inf. Ratio […]]]<br />Proportion of customer’s purchase attributable to own decisions<br />Proportion of 1st degree referral’s purchase attributable to influence<br />Proportion of 2nd degree referral’s purchase attributable to influence<br />…And so on…<br />
  31. 31. Maximizing Social Media ROI<br /><ul><li>Maximize Profits
  32. 32. Nurture High TCV Customers
  33. 33. Appraise Customers based on TCV
  34. 34. Seed the right Influencers to maximize spread and profitability, subject to marketing budget
  35. 35. Minimize Cost
  36. 36. Identify Key players
  37. 37. Minimize Acquisition Cost subject to Total Profitability</li></li></ul><li>What Next?<br /><ul><li>Optimized Marketing Investments
  38. 38. Max Gains
  39. 39. Own purchase data
  40. 40. Influence & Referral Purchasesdata
  41. 41. Customer conversations
  42. 42. Social network activity
  43. 43. Customer Transactions
  44. 44. Support queries</li></li></ul><li>SocialHarvest is a complete Twitter based Loyalty and Referral Management tool that lets you:<br />Check us out at www.gojeeno.com/socialharvest<br />About SocialHarvest<br />
  45. 45. Questions?<br />Comments?<br />Queries?<br />Feedback?<br />Email: vikram@gojeeno.com<br />Twitter: twitter.com/gojeeno<br />Or visit us at www.gojeeno.com<br />