Date post: | 01-Nov-2014 |
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The ROIof Social Media
Maria McGowanInternet & Marketing SpecialistGreater Halifax Partnership @mariamcgowan @greater_halifax
It’s all over the map
Industry measurements are “suspect”- Geoff Livingstone
…yet, measuring Social Media is “challenging”- Jeremiah Owyang
It doesn’t have to be
In 2011, here’s the focus
It’s not just about
Facebook likes or followers on Twitter
For example• Shares• Mentions (positive, negative or neutral)• Blog comments• Retweets• @mentions• email opens and click through rates• “likes” of a Facebook page
But they’re good for measuring “engagement”
… That kind of stuff
It’s really about
• Lowered cost of new customer acquisition• Reduction in average customer serving
costs• Increasing customer satisfaction
Some people think
“Show me the ROI
or all this is a waste of time”
Here’s what you can do
Social Media Objectives
You must measure social media against yoursocial media objectives
What are they?- awareness?- lead generation?- more relationships?
Design landing pages on your website to capture prospects and
help convert them into paying customers. The landing pages
would be designed specifically around the social media
campaign, and you would need Google Analytics etc installed
to track traffic and conversions.
The key point is that all of your social media programs
(Facebook, Twitter, YouTube, etc.) should drive people to the
landing page on your website where you can convert them from
tire kickers (prospects) to paying customers.
Test, test, test…
The ROI
3 categories of measurement
Quantitative Metrics
Qualitative Metrics
ROI Metrics
#1 Quantitative Metrics
These metrics are data-intensive and
number-oriented.
3 categories of measurement
Success Metrics Goal
monthly sales directly linked to Twitter $ monthly sales
new customers directly linked to Twitter
$ monthly sales directly linked to Twitter
Capitalizing on Twitter’s real-time nature for exclusive, limited – customer / limited-period offers
Good example
#2 Qualitative MetricsThese metrics that have an emotional component
to them.
Here’s a campaign to increase Satisfaction
Success Metrics Goal
Amount of positive comments sent to customers per week within a given time
Amount of positive conversations about your organization or company per week
Amount of conversations that started from the comment
Amount of good suggestions that your company hadn’t thought of
Amount of suggestions collected per month and amount that you actually implement
3 categories of measurement
Good exampleUsers who are part of this network feel that they have some role in the decision making process of the company and it makes them feel a part of it.
#3 ROI Metrics
In the world of social media, all roads should
lead to ROI.
Conversion rates
Success Metrics Goal
% of people you converted from a prospect to a customer on your e-commerce site
Increased customers
How many people you converted from a prospect to a client on your B2B site
Increased clients
3 categories of measurement
Here’s how 5Fortune 500 companies use
Social Media
BrandingCreate buzz
180 million + total upload views on YouTube channel and sales increased 27% in six months (Nielson).
Drive people to their landing page then Dell can
easily track their prospects' behaviour.
E-Commerce
In 2009, $6.5 million in revenue from Twitter
a tool to do simple,
anecdotal research.
Research
It costs 3-5 times as much to acquire a new customer
as it does to keep a current one.
Customer Retention
Don’t sell online? Use social media to drive prospects to a
website where they can download a whitepaper, listen to a
podcast, or watch a video.
Lead Generation
Once you've captured the prospect's contact information, you can re-market to them via email, direct mail, etc
Let’s do some math
Customer Lifetime Value (CLV)
It’s the most important formula in social media
CLV is the amount of revenue a customer will
bring to your company over the course of his/her
lifetime with your brand.
Customer Lifetime Value (CLV)
Example:
Cable TV provider knows that a typical
customer spends $80 per month and that
the average customer stays with the
company for three years.
$80 x 12 months x 3 years = $2,880 (CLV)
Customer Lifetime Value (CLV)
Once you know the CLV, you can decide how
much $ you'd like to invest to acquire a
customer (allowable cost per sale)
Many people use 10% of their CLV as a
starting point.
In the cable TV example, the CLV is $2,880 and
10% of that is $288 (allowable cost per sale)
Applying ACPS to Social Media
$288 is what it takes to get 1 customer.
Let’s say you want to run a Social Media
campaign to get 100 customers
$288 x 100 = $ 28,800 campaign budget
Create:
Landing page?
Mobile application?
Monthly e-newsletter with cable TV tips to stay in
front of prospects and new customers?
What $28,800 can get you
Pay off?
More engagement with your customers.
…listening, feedback, interactive, brand strength, and measurability!
Thanks!
Maria McGowanInternet & Marketing SpecialistGreater Halifax Partnership @mariamcgowan @greater_halifax