This is Guest Blog by Jugal Shah. Jugal is pursuing MBA w/ focus on Marketing from a premier university in India. He shares his views on marketing, sales and strategy via his Blog & Facebook.In this post, He briefly comments on “How to measure Social Media Marketing ROI”.
Jugal Shah’s Short post on Measuring Social Media Marketing ROI:
In social media marketing, ROI is not in just monitory terms. So, for social media ROI, my focus would be on 1) to how many people I have reached 2) How many people I have engaged through online activities 3) Becoming a conversation enabler and perception driver
Then focus on
1) how much increased revenue is due to social media reach (you can do this by tracking referred link) 2) How many leads you generated through social media 3) How social media efforts helped to resolve customer query/problems and led to more customer satisfaction (remember customer acquisition cost 10 times more than customer retention cost).
In a nutshell, It’s of utmost important to use Social Media as:
Paras: Jugal, Thanks for this post. I am sure, this short post would be a great food for thought for readers who are interested in Digital Marketing Analytics or analytics in general. Readers, Feel free to reach out to him on his blog and/or Facebook page.
This post will briefly describe an important marketing metric called “Customer Lifetime value”.
What is it?
It’s an important metric in the world of marketing. It helps businesses measure a customer’s worth to a business during the entire business relationship. In other words, it helps a business calculate net profit associated with a customers relationship starting from first purchase AND subsequent purchases along with expected future purchases.
How is it used?
It’s used to measure return on investment when formulating marketing strategies. Here’s an example: If your strategy costs $100 to acquire a customer and the average lifetime value of customer is $400 – then well, that’s a great thing, isn’t it?
It also helps business focus on making the most out of the existing customer relationships.
To extend these examples in the Internet marketing world, let’s take an example:
Suppose that the cost of acquiring a customer via Internet marketing is $25. The customer buys a $10 worth of goods. Is this good? Not from what we’ve seen so far. But the lifetime value of customer is $120 – see, now it does makes sense to spend $25 to acquire a customer.
In this post, I wrote about a key Business Metric that should be of help when you work on your Marketing analytics project. Note that accurately measusring this metric is NOT an addition of couple of numbers and there is some thinking involved. To that end, I would leave you thinking about this critical business metrics that could be used in marketing analytics project! Your comments are very welcome!