Paul Gillin: #BTG11 Conference

Unraveling the Mysteryof Social Marketing ROI

Paul Gillin, authorThe New InfluencersSecrets of Social Media MarketingSocial Marketing to the Business Customer

Is it

Return on Investment

or

Risk of Inaction?

It’s Simple, Knucklehead

ROI = COST OF INVESTMENT

(GAIN FROM INVESTMENT - COST OF INVESTMENT)

A. Revenue

Types Of Financial Impact

B. Costs Avoided

Anything that leads to A or B,But only if you can directly

equate its value to an action

Website Visitors

Click-throughs

Store visits

Press coverage

“Buzz”

Employment applications

Retweets

FaceBook friends

Blog comments

Video views

Twitter followers

Impressions

Friends

Coupons distributed

These are NOT ROI

But if you can quantify their financial impact, you have ROI!

Historical Metrics

Excellent CRM Tools and Practices

Clearly Understood and Applied Web Analytics

What You Need

Basic Business Metrics

Lifetime Value of a Customer = (Longevity * Revenue) * Margin

Value of a Lead/Visitor = Visitor * Conversion Rate * Lifetime Value

Okay, Let’s Make it Real

Typical customer Moe spends $10,000/year with you

Moe is with you for five years

Your profit margin is 10%

Lifetime value of Moe is($10,000 * 5) * .1 = $5,000

CRM EssentialsMust 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

Web Analytics

Must track individual visitors

Must document paths to desired destinations

Must identify referring sources

You must use them

Applying ROI: Value of a Visitor

Monthly Visitors

10,000

Conversion Rate

.5%

Lifetime Value $5,000

Calculation (($10,000*.005)*$5,000)10,000

Value of a Visitor

$25

Value of a Blog

Monthly Search Traffic 3,000

Estimated Traffic w/Blog 4,000

Value of a Visitor $25

Monthly Value of a Blog

Monthly Blog Expense $6,000

316%

Value of a Tweet 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

Cumulative ROI: the Eye Chart

Year Item Annual Cumulative

1Forum Administrative costs $ 35,000 $ 35,000 Savings $ 70,000 $ 70,000 ROI 100% 100%

2Forum Administrative costs $ 17,500 $ 52,500 Savings $ 105,000 $ 175,000 ROI 500% 233%

3Forum Administrative costs $ 7,000 $ 59,500 Savings $ 140,000 $ 315,000 ROI 1900% 429%

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

Lift Studies

Store visits

Headline Counts

Employment applications

Speaking Invitations

Net Promoter Score Coupons redeemed

Measuring the Immeasurable

If You Can Measure It, You Can Calculate Its ROI

Thank You!

Paul Gillin

508-656-0734

paul@gillin.com

Site: gillin.com

Blog: paulgillin.com

Twitter: pgillin