Image courtesy of http://www.customer-lifetimevalue.com/
In dealing with social media platforms, for some it is
difficult to measure the ROI (return on investment) an organization can see by
utilizing a certain channel. How do you measure customer engagement with a content
driven post through social media? Many will reply by the number of likes,
clicks, shares, etc. that the post receives. Or by how many click throughs it
received to its landing page. None of these are necessarily incorrect however, most
organizations want their ROI delivered to them in dollars, not likes. Enter
CLV!
CLV stands for customer lifetime value and “is loosely
defined as the net dollars a customer contributes over their life as a customer”
(Pear Analytics Blog, n.d.). I.E. how much your customer is worth or will spend
with your business (cha-ching!). You can learn to calculate your CLV here! “CLV
has a central strategic importance for a company, and more and more managers
are discovering that their most important asset is not the company’s inventory
but its customers…” (Clark, 2010). By determining your customers lifetime
value, you can then calculate what the cost is to acquire a new customer (CAC),
how much of your budget you should be spending to do so, and eventually how
many individuals you need to drive to your landing page to get 1 potential
customer to convert. (Seeing how much it can cost to acquire a new customer gives new meaning to the customer is always right!)
Anthony Turner, CEO of the 60 Second Marketer and 60 Second Communications,
suggests that “the best way to determine how many customers you’re gaining
though social media is to look at the website analytics” (Turner, n.d.). I
personally use Google Analytics to track the effectiveness of my organizations
website. It provides you with a ton
of information including what the referring website was, how long a user stayed
on your page, where they clicked next, and even categorizes visits based on traffic
type. I LOVE data and mining it to create trends that either support or disprove
an objective or goal we have. There’s truly nothing like data.
If a company was looking to increase their CLV, I would
recommend they do the following:
·
focus on retention of customers to increase
their lifetime and brand loyalty
·
offer complementary or “sticky” products/services
to cross-sell customers
·
commit yourself to provide quality customer
service and speedy conflict resolution
·
provide upgrades or helpful/education content as
an added value to your customers
·
communicate with and receive feedback from
customers to make sure you are still satisfying a need/want that they have
For many of the above listed recommendations, when dealing
with social media and the web 2.0 world, all of these start with your landing
page. But how do people find your social media site or landing page? By
searching for a product or service you provide or information you have shared.
David Scott defines search engine optimization (SEO) as “the
art and science of ensuring that the words and phrases on your site, blog, and
other online content are found by the search engines and that, once found, your
site is given the highest ranking possible in the natural search results (i.e.
what the search engine algorithm deems important for the phrase entered)”
(Scott, 2015, pg. 396). By providing great content and using words and a
language that your buyers will use when searching for said great content, you
will organically appear in front of these potential customers. By appearing
where buyers are looking for your (or information you have to offer), this will
drive traffic to your landing page, inevitably boosting your ROI as you convert
more customers.
~Nicole
References
Clark, P. (2010, February). The 16 business benefits of Customer Lifetime Value. Retrieved from
http://www.thewisemarketer.com/features/read.asp?id=119
Pear Analytics Blog (n.d.). The Importance of Lifetime Value in Marketing. Retrieved from http://pearanalytics.com/blog/2009/importance-of-lifetime-value-in-marketing/
Scott, David M. (2015). The New
Rules of Marketing & PR. Hoboken, New Jersey: John Wiley &
Sons, Inc.
Turner, J. (n.d.). An
In-Depth Guide on How to Calculate the ROI of a Social Media Campaign. Retrieved
from http://60secondmarketer.com/blog/2013/11/17/in-depth-guide-calculating-social-media-roi/
Hi Nicole,
ReplyDeleteVery informative post! You really helped me better understand CLV and how it related to social media. It’s great that you talked about the difficulty in measuring ROI through social media platforms and that every company can see ROI from a different perspective. I think one thing that most companies can agree on is that driving traffic to a company’s website is very important.
It’s important that businesses try to drive traffic to the website using different strategies. Whether this be through blog posts shared on social media, hashtags, or call to action buttons. I really like Facebook’s call to action button for business and how it allows you to select from a variety of different choices such as Donate Now, Learn More, Contact Us, etc. This helps businesses tailor their marketing to fit their needs.
I believe you mentioned before that you run the social media page for the company you currently work for. What types of measures do you take to drive traffic to the website? Do you look at the analytics to see if social media plays a role in web traffic?
Alyssa,
ReplyDeleteI’m glad you found my post helpful in better understanding CLV! When I first introduced social media to the organization I work for (a local bank), I ran into many road blocks because I had difficulty projecting an ROI for the efforts. Who doesn’t prefer seeing an ROI in dollar signs if not a bank!?
I’m glad you pointed out that driving traffic to a company’s website is very important. I am currently working on a project that will enhance our website to be responsive so users on mobile devices can view the content cleanly and easily. I’ve boosted posts on Facebook before but have never utilized the call to action button, have you seen much success from that tactic?
You are correct, I run my company’s Facebook page (that is the extent of our social media footprint currently). Presently with our website going through the redesign I don’t drive much traffic to it from social media. I try to keep our social media posts to helpful content, write ups or pictures from local events we attend, or donations we make, generally things of that nature. I find that our followers really enjoy when they see their favorite branch manager or teller on Facebook! When the redesign is complete we will be able to do things such as opening deposit accounts online and submitting loan applications through our website. That is when I will really start directing our social media following to our website. There will be a much more tangible call to action than the current design. The times I have directed our followers to our website from social media have had okay results. Again however, I believe it is because the content on our website is more traditional and bank-y currently. I am moving towards a more interactive, educational feel that will hopefully yield better results.
What experiences have you had leveraging social media to drive users to websites? Have the efforts been successful?
~Nicole
Hi Nicole,
ReplyDeleteI had had success in utilizing the Facebook action button. I recenty set up a "Donate Now" button for one of my clients and then boosted it as a post for three days at $5 a day. Spending just $15 led to over 100 people clicking on the post. I would suggest trying it out for the bank you work for and boosting it for just a few dollars- you can add a "learn more" or "contact us" button.
Alyssa,
DeleteThat's great! Thanks for the tip, I'll be sure to try it out and measure the results!
~Nicole
Hi Nicole and Alyssa,
ReplyDeleteThanks for your post. I got distracted after reading last comment from Alyssa, it was really good! Honestly, I was not paying too much attention to the "Boost Post" button on Facebook, so I didn't realize how useful this tool could be to suggest a low investment to "test the water" and see how good a product or campaign could do. The features of the Boost Post are really very flexible, in terms of customization and seems like it is a very attractive idea to start driving some attention, during short periods of time. It even shows the amount of people that would be reached with the investment you can make. It is awesome!
Thanks for the interesting conversation, I also learned about the effectiveness of a good title, as explained by Scott (2015): "Choose a great title that grabs attention."(p. 226). Only in one day, my latest post "ROI vs Return-On-Vulnerability" grabbed more than 200 viewers! Of course, no one still made it to post, but I realized the title was 'catchy'. I am truly experiencing the possibility to build a social media relationship based creative or attractive content. Thanks again for this conversation!
Regards,
Carlos
Choose a great title that grabs attention.
References:
Scott, D. M.(2015). The new rules of marketing and pr: How to use social media, online video, mobile applications, blogs, news releases, and viral marketing to reach buyers directly. [Kindle version]. Retrieved from amazon.com.
Carlos,
DeleteThanks for the comment! I cannot speak highly enough about the ability to boost posts on Facebook. For a couple dollars a day you can reach potentially thousands of users. I particularly like how you have control over who you are targeting. Alyssa spoke to the call to action button on Facebook that I’ve never used before but plan to. It sounds as though this holds some potential for your efforts as well!
That’s great that you’re driving traffic to your blog! What do you think are some ways you can further engaged those viewers to take the next step and participate in a conversation?
~Nicole