Making an ROI Case for Social Media
Every day that goes by, I hear someone talking about the value of social media. Many say that we don’t need to measure it’s results because it should be based on customer engagement. We agree! Many say that for me to plan and budget my marketing dollars, I need to justify the ROI. We agree! Others may say that you need to do it regardless of the ROI because if you are not communicating with your customers then someone else is. We agree!
Here is what we think is a better way to quantify the value:
Your typical customer spends $10,000 with you annually. If you business operates on a 10% margin then over the next 5 years this customer is worth $5,000. So each new customer could represent $5,000 in business.
Let’s say the Twitter has 1,000 monthly visitors to your website and 50 of them convert to customers. That represents $250,000 in monthly value. If it takes 50 tweets to get 1,000 visitors then each tweet is worth $5,000.
Let’s look at it in terms of labor cost. A full time social media expert is $100,000 annually, if you can trace 20 new customers to this persons efforts, then they have paid for themselves.
The big picture is to understand the value of your customers, put measurement tools in place to track your customers and conversions.
Many people are looking for an easy way to attract customers on social media. There is no silver bullet! It does take time and effort but doesn’t everything that’s important.
Do you need to quantify your social media or determine the best strategy for your business? Hadfield Communications will get you engaged with your customers.