We teach companies to build loyal and profitable customer communities.
Dec 06, 2014
We teach companies to build loyal and profitable customer communities.
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What is YOUR investment worth? Exploring ROI
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Is it Return on Investment
Or
Risk of Inaction?
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COST OF INVESTMENT
(GAIN FROM INVESTMENT - COST OF INVESTMENT)ROI =
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A. Revenue B. Costs Avoided
Anything that leads to A or B,But only if you can directly equate its
value to an action
Types of Financial Impact
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These 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
But if you can quantify their financial impact,
you have ROI!
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Historical Metrics
Excellent CRM Tools and Practices
Clearly Understood and Applied Web Analytics
What You Need
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Lifetime Value of a Customer = (Longevity * Revenue) * Margin
Basic Business Metrics
Value of a Lead/Visitor = Visitor * Conversion Rate * Lifetime Value
Conversion Rate = New Customers
Visits/Leads
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If a typical customer spends $10,000/year with you
And the customer is with you for five years
Your profit margin is 10%
Lifetime value of a customer is($10,000 * 5) * .1 = $5,000
Let’s Make It Real
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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
CRM Essentials
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Must track individual visitors
You must use them
Must document paths to desired destinations
Must identify referring sources
Web Analytics
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Monthly Visitors
Conversation Rate
Lifetime Value
Calculation
Value of a Visitor
10,000
.5%
$5,000
$25
10,000 x .005 x 5,000
10,000
Applying ROI: Value of a Visitor
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Value of a Blog
Monthly Search Traffic
Estimated Traffic w/Blog
Value of a Visitor
Monthly Value of a Blog
Monthly Blog Expense
3,000
4,000
$25
$25,000
$6,000
316%ROI ( )
$25,000-$6,000$6,000
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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
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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%
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
Cumulative ROI: the eye chart
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If You Can Measure It, You Can Calculate Its ROI
Lift Studies
Store visits
Headline Counts
Employment applications
Speaking Invitations
Net Promoter Score
Coupons redeemed
Measuring the Immeasurable
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Thank you Paul Gillin
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Thank You