The ROI of Social Media
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17-Sep-2014 -
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Transcript of The ROI of Social Media
![Page 1: The ROI of Social Media](https://reader033.fdocuments.us/reader033/viewer/2022061106/5418ba897bef0a48248b562c/html5/thumbnails/1.jpg)
The ROI“Return on Investment”
of Social Media
Maria McGowanInternet & Marketing SpecialistGreater Halifax Partnership @mariamcgowan @greater_halifax
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It’s all over the mapIndustry measurements are “suspect”- Geoff Livingstone
…yet, measuring Social Media is “challenging”- Jeremiah Owyang
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It doesn’t have to be
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In 2011, here’s the focus
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It’s not just aboutFacebook likes or followers on Twitter
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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
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It’s really about
• Lowered cost of new customer acquisition• Reduction in average customer serving
costs• Increasing customer satisfaction
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Some people think
“Show me the ROI or all this is a waste of time”
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Here’s what you can do
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Social Media ObjectivesYou must measure social media against yoursocial media objectives
What are they?- awareness?- lead generation?- more relationships?
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3 categories of measurement
Quantitative MetricsQualitative Metrics
ROI Metrics
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#1 Quantitative MetricsThese metrics are data-intensive andnumber-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
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Capitalizing on Twitter’s real-time nature for exclusive, limited – customer / limited-period offers
Good example
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#2 Qualitative MetricsThese metrics that have an emotional componentto 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
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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.
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#3 ROI MetricsIn the world of social media, all roads shouldlead 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
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Here’s how 5Fortune 500 companies use
Social Media
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BrandingCreate buzz
180 million + total upload views on YouTube channel and sales increased 27% in six months (Nielson).
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Drive people to their landing page then Dell caneasily track their prospects' behaviour.
E-Commerce
In 2009, $6.5 million in revenue from Twitter
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a tool to do simple,anecdotal research.
Research
Hey PodCampers, can you think of more?
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It costs 3-5 times as much to acquire a new customer as itdoes to keep a current one.
Customer Retention
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Don’t sell online? Use social media to drive prospects to awebsite where they can download a whitepaper, listen to apodcast, 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
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Let’s do some math
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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.
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Customer Lifetime Value (CLV)
Example: Cable TV provider knows that a typicalcustomer spends $80 per month and thatthe average customer stays with thecompany for three years.
$80 x 12 months x 3 years = $2,880 (CLV)
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Customer Lifetime Value (CLV)Once you know the CLV, you can decide howmuch $ you'd like to invest to acquire acustomer (allowable cost per sale)
Many people use 10% of their CLV as astarting point.
In the cable TV example, the CLV is $2,880 and10% of that is $288 (allowable cost per sale)
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Applying ACPS to Social Media$288 is what it takes to get 1 customer.
Let’s say you want to run a Social Mediacampaign to get 100 customers
$288 x 100 = $ 28,800 campaign budget
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Create:
Landing page?Mobile application?Monthly e-newsletter with cable TV tips to stay infront of prospects and new customers?
What $28,000 can get you
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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 installedto track traffic and conversions.
The key point is that all of your social media programs(Facebook, Twitter, YouTube, etc.) should drive people to thelanding page on your website where you can convert them fromtire kickers (prospects) to paying customers.
Test, test, test…
The ROI
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Pay off? More engagement with your customers.
…listening, feedback, interactive, brand strength, and measurability!
Thanks!
Maria McGowanInternet & Marketing SpecialistGreater Halifax Partnership @mariamcgowan @greater_halifax