Uploaded byJennifer van der Meer
Marrying for the money SXSW
1) The document discusses measuring the return on investment (ROI) of relationships, using examples like marrying for money, owning a dog, the value of Facebook fans, and lifetime customer value. 2) It argues that while ROI can be measured through financial transactions, the most valuable relationships are not fully captured that way since human connections are about more than transactions. 3) To better measure relationship health, the document suggests focusing on non-financial metrics like acts of reciprocity, advocacy, and shared experiences between people.
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Marrying for the money SXSW
- 1. Marrying for theMoney The ROI of Relationships SXSWi March, 2011 Jen van der Meer Dachis Group @jenvandermeer #MROI
- 2. What youʼll needto get ROI from our time together today: 1-2 Napkins Felt tip pen Basic math skills At least one relationship to measure: _Dog _Friend _Mom _Customer _Potential fiancée
- 3. I calculate ROIin my sleep Wall St. @jenvandermeer
- 4. ROI is underattack! @mghoza @ehuddleston #e20 RT @andyjankowski: "What’s missing in love it. Measure success through operational most #social business attempts is a systematic metrics that are meaningful to biz and focus link to metrics that matter." @jbernoff #sbs2011 social ROI on exception mgmt @jhagel #SBS2011 @tmuellernyc @tstaley We are at an inflection point, a social generation ROI analysis for social software is a "fool's replaces spreadsheet generation. @jobsworth, errand" John Hagel #SBS2011 #SBS2011
- 5. Good news: youcan measure the ROI of ANY relationship = - 567%
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- 7. Case study 1: Therich husband
- 8. The stats upfront Timeframe: 2006 Job: Real estate lawyer Education: Ivy undergrad, top law school Prospects: Real estate developer Current salary: $80,000 + 20k in bonus Salary of fellow alumni: $1 MM in combination of cash + bonus Increasing 100% each year Investment: fabulous wardrobe $100,000
- 12. Problem: ROI framework Datathat was needed at the start: Length of relationship Cash transaction amount per year Profit per transaction Understanding of stocks vs. flows Cost of investment to initiate relationship
- 13. Length of relationship? 5 years
- 14. Revenue per year: $1MM $1 MM 1000 750 500 $100k $100k 250 2006 2007 $10K 2008 0 2009 2010 Salary Cash Bonus
- 15. Profit per yearlytransactions $900k $900k 900 675 450 225 $-90k 0 2006 2007 -225 2008 2009 Profit 2010
- 16. Marriage lifetime value Year 0 2006 2007 2008 2009 2010 Revenue $100k $1 MM $1 MM $100k $10k 1 time acquisition cost -$100k Costs x year -$100k -$100k -$100k -$100k -$100k Profit x year $0 + $900k + $900k + $0 + $-90k $1.71 MM - $100k = $1.61 MM = 11.1x $100k
- 17. Successful relationship? 11.1 x return
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- 19. Skippy lives for14 years $50 x 12 months x 14 years - $8,400 $300 x 14 years - $4,200 $20 x 12 months x 14 years - $3,360 = - $15,960
- 20. Skippy ROI: thevalue of a dog Initial cost: $2,000 Revenue: $0 Lifetime cost: $-15,960 ROI = $15,960 - $2,000 = $-17,960 = -898% $2,000
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- 22. What is theproblem with measuring the transactional cost of a relationship? What we value most are the transactions that cannot be measured. Immeasurable. Beyond measure. Priceless.
- 23. Case study 3: Valueof a Facebook fan
- 24. Value of afan: Vitrue: $3.60 (earned media) Syncapse: $136.38 (layer cake of value) Cost of a fan: Webtrends: $1.07
- 25. The value ofa fan:
- 26. Problem with valueof a fan view “Fans” who Customers donʼt buy Fans and who are not (haters, customers on FB totally unqualified) #ROIFAIL
- 27. Case Study 4: Holisticcustomer Life time value
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- 30. Gas customer lifetimevalue Year 0 2006 2007 2008 2009 2010 Revenue $1500 $1800 $2100 $2500 $3000 1 time acquisition cost -$100 Costs x year -$1410 -$1692 -$1974 -$2350 -$2820 Profit x year $90 + $108 + $126 + $150 + $180 $654 - $100k = $554 = 5.5x $100
- 31. ROI Conclusion: < <
- 32. So we CANmeasure the ROI of a relationship. But transactional value distorts the purpose of why people are in business. Why they become customers.
- 33. “Your grandparents arefar more prepared for whatʼs coming than you are. They understood the human connection, small-town rules. All of you who just worry about metrics, numbers, roi, you're going to die." - @garyvee
- 34. SO WHAT. (do wemeasure).
- 35. Healthy relationship? # andquality of: hugs. kisses. pleasant surprises. help around the house. positive reinforcement. listening. mutual support. shared experiences?
- 36. Customer referral value LOYAL CUSTOMER SOCIAL CUSTOMER receipt $100 receipt receipt $200 $50 receipt $50 Higher Lifetime Value Higher Referral Value According to Kumar, Petersen, and Leone, your most valuable customers are those whose word of mouth brings in the most profitable new customers, regardless of how much they themselves buy.
- 37. Wall Street SecretRevealed: Customer Lifetime Value is not something that “the street” cares about. When CMOs and CTOs say ROI, they really mean, “show me a pretty dashboard.”
- 38. if you dreamit... what are the levers and behaviors tha drive human connections between people and organizations?
- 39. Dashboard: Social ProgramHealth! presence! conversion! advocacy! size of tribe social contribution to media mix, revenue brand community % % weekly #followers score YTD Impressions YTD CPO YTD Revenue YTD Impressions YTD CPO YTD Revenue engaged growth 3,544,215 2.3% +4.2% 49.5 55,542,222 $0.34 $42554,254 55,542,222 $0.34 $42554,254 campaigns: social channels Facebook Campaign XYZ impressions eng. CTR CPO competitive tribes 5,544,555 2.3% .15% .15 total followers competitor 1 client content performance competitor 2 Video ABC engagement rate WOM impressions sharing. CTR CTR 1/5/02 1/6/02 1/7/02 1/8/02 1/9/02 sentiment analysis 3 months avg. 217,225 42.6% .5% .10% comments and sentiment about brand ambassador team Interactions Sampling Reach Trial Conversion based on 3.5 MM 10,998,877 2,444,546 43% sentiments Top ambassador events brand tracking 3 months avg. social contribution to site referrals (SEO?) Twitter 20 Innovative 15 10 Youtube Edgy 5 Lansing, MI Oradell, NJ SF, CA Pragmatic 0 Facebook U Mich Ambassador Outside Out of touch May June July Aug Sept Oct Nov Dec Sampling Thank You Lands party event Sponsorship
- 40. How far canwe take this? As the social graph reveals a huge volume of data about our actual relational behavior, we have an opportunity to pause for a moment: to consider the value system reflected in how we measure each other, ourselves, our relationships in the world.
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- 43. James Burke: Applying Analytics to Relationships
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- 45. In conclusion: ROI canbe measured. But human connections are fluid, dynamic, and worth more than financial transactions alone. To measure the health of a relationship, define those actions of reciprocity and advocacy.
- 46. thank you! @jenvandermeer