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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 Media ROI:Yes You Can!Social Media ROI:Yes You Can!
Paul Gillin, Author
The New Influencers
Secrets of Social Media Marketing
Social Marketing to the Business Customer
Page 2
It’s Simple, KnuckleheadIt’s Simple, Knucklehead
ROI = COST OF INVESTMENT
(GAIN FROM INVESTMENT - COST OF INVESTMENT)
Page 3
Return on InvestmentOr
Risk of Inaction?
Page 4
Types Of Financial ImpactTypes Of Financial Impact
A. Revenue B. Costs Avoided
Anything that leads to A or B,But only if you can directly
equate its value to an action
Page 5
What You NeedWhat You Need
Cost savings Efficiency
◦ Cost per message communicated◦ Cost per new lead/customer acquired
Productivity: ◦ Increase in employee engagement/morale◦ Lower turnover/recruitment costs
Engagement: ◦ Ratio of posts to comments◦ % of repeat visitors◦ % of 5+ min visitors◦ % of registrations
Trust:◦ Improvement in relationship
/reputation scores with customers and communities (Loyalty/Retention)
Thought leadership: ◦ Share of quotes◦ Share of opportunities
Message penetration◦ Positioning on key issues◦ Improvement in
favorable/unfavorable ratio
Page 6
These are NOT ROIThese are NOT ROI
Website Visitors
Click-throughs
Store visits
Press coverage
“Buzz”
Employment applications
Retweets
FaceBook friends
Blog comments
Video views
Twitter followers
Impressions
Friends
Coupons distributed
But if you can quantify their financial impact, you have ROI!
Page 7
Reconsider Customer SegmentsReconsider Customer Segments
How Best Buy segments its customers
High
Low
High Low
Lea
ding
-Ed
ge T
echn
olo
gy
Price Sensitivity
Enthusiasts
Online Aficianados
Practicals
Ambivalent Aspirers
Deal Drivers
Who are your high-value customers?
Page 8
Start With the BusinessStart With the Business
Business Goal
Measurement
Tactics Tools
Generate 30% More
Leads
Publish Six New White Papers
Initiate Monthly Webcasts
Sponsor Microsite on TechTarget
Build Targeted Twitter List (500)
Dedicated Monthly E-mail Blast
Promote To Trade Publications
List in Tech Directories
Hire Tech Freelancers
List Rentals Create CoTweet
Account Increase PR
Budget Hire E-mail
Marketing Firm Initiate Blogger
Relations Program
Increase Webcast/White Paper Reg’s by 60%
Increase Traffic to WP Landing Pages 120%
Increase 800-Number Calls by 80%
Review and ReviseReview and ReviseReview and ReviseReview and Revise
Page 9
7 Steps to Social Media ROI 7 Steps to Social Media ROI
1. Define the “R” – What are expected results?2. Define the “I” -- What’s the investment?3. Understand audiences and what motivates
them 4. Choose metrics5. Choose benchmarks 6. Pick a tool and undertake research7. Analyze results, glean insight, take action,
measure again
Source: KD Paine & Partners
Page 10
7 Steps to Social Media ROI 7 Steps to Social Media ROI
The Perfect KPI…• Gets you where you want to go• Is actionable• Continuously improves your processes• Is there when you need it• Should be developed for:
• Your own properties• Different tactics• Other influential sites
Source: KD Paine & Partners
Page 11
Stagger ActivitiesStagger Activities
White Paper Promotion Timeline
Task Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Home page link
E-mail newsletter
E-mail blast
Blog promotion
Twitter messaging
Page 12
Look for ImpactLook for Impact
Page 13
Basic Business MetricsBasic Business Metrics
Lifetime Value of a Customer = (Longevity * Revenue) * Margin
Conversion Rate = New Customers/ Visits or Leads
Value of a Lead/Visitor = Visitor * Conversion Rate * Lifetime Value
Page 14
OK, Let’s Make it RealOK, Let’s Make it Real
Typical customer Curly spends $10,000/year with you
Curly is with you for five years
Your profit margin is 10%
Lifetime value of Curly is($10,000 * 5) * .1 = $5,000
Page 15
CRM EssentialsCRM 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
Page 16
Web AnalyticsWeb Analytics
Must track individual visitors
Must document paths to desired destinations
Must identify referring sources
You must use them
Page 17
Applying ROI: Value of a VisitorApplying ROI: Value of a Visitor
Monthly Visitors 10,000Conversion Rate .5%Lifetime Value $5,000Calculation (10,000 * .005 * 5)/10,000Value of a Visitor $25
Page 18
Value of a BlogValue of a Blog
Monthly Search Traffic 3,000Estimated Traffic w/Blog 4,000Value of a Visitor $25Monthly Value of a Blog $25,000Monthly Blog Expense $6,000ROI ($25,000-$6,000)/$6,000 316%
Page 19
Value of TwitterValue of Twitter
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
Page 20
Value of a CommunityValue of a Community
You want to launch a customer support forum to reduce your costs of telephone supportEstimated admin costs: ½ FTE yr 1, ¼ FTE yr 2 1/10 FTE yr 3Estimated savings: 1 FTE yr 1, 1.5 FTE yr 2, 2 FTE yr 3
Year Item Annual Cumulative
1
Forum Administrative costs $ 35,000 $ 35,000
Savings $ 70,000 $ 70,000
ROI 100% 100%
2
Forum Administrative costs $ 17,500 $ 52,500
Savings $ 105,000 $ 175,000
ROI 500% 233%
3
Forum Administrative costs $ 7,000 $ 59,500
Savings $ 140,000 $ 315,000
ROI 1900% 429%
Page 21
Measuring the ImmeasurableMeasuring the Immeasurable
Lift Studies
Store visits
Headline Counts
Employment applications
Speaking Invitations
Net Promoter Score Coupons redeemed
If You Can Measure It, You Can Calculate Its ROI
Page 22
Thank you!Thank you!
Paul Gillin
508-656-0734
Site: gillin.com
Blog: paulgillin.com
Twitter: pgillin
Free bi-weekly newsletter; sign up at gillin.com