{"id":3459,"date":"2010-09-28T17:00:13","date_gmt":"2010-09-28T17:00:13","guid":{"rendered":"http:\/\/digitalscientists.com\/?p=3459"},"modified":"2023-01-25T13:55:55","modified_gmt":"2023-01-25T13:55:55","slug":"pay-it-forward","status":"publish","type":"post","link":"https:\/\/digitalscientists.com\/blog\/pay-it-forward\/","title":{"rendered":"Pay it forward"},"content":{"rendered":"\n

Use customer referral value to evaluate social media\u2019s role in the marketing mix<\/h4>\n\n\n\n

Social Media is a lot like the old media, for example TV, in one very important way. It\u2019s almost impossible to measure its value using ROI<\/a> \u2013 return on investment.<\/p>\n\n\n\n

Just in case you were wondering, most TV advertisements don\u2019t have an attractive ROI.<\/p>\n\n\n\n

So, why does anyone invest in TV advertising \u2013 by extension \u2013 why should anyone invest marketing dollars into social media<\/a>?<\/p>\n\n\n\n

Well, when it comes to TV, you\u2019ll find that even though TV ads don\u2019t earn a great return, sales will fall when the ads stop.<\/p>\n\n\n\n

Huh?<\/p>\n\n\n\n

The point here is that ROI is a relatively short term metric. Just because I\u2019m investing today, doesn\u2019t mean that I\u2019m going to be able to capture the revenue in this quarter. Or next. Or even this year.<\/p>\n\n\n\n

Same goes for social media. As you build a rapport with prospects and customers, you aren\u2019t just in there for a quick ROI, you\u2019re really supporting your current baseline in sales.<\/p>\n\n\n\n

So, here\u2019s where Customer Referral Value (PDF) comes in handy. If you\u2019re a savvy brand builder, your Lifetime Customer Value should already be something you’re thinking about. Just like it sounds \u2013 it represents that actual lifetime value of a customer. If you want to get into the financial geekery of it all, it essentially represents the discounted value of all future profits from a particular customer.<\/p>\n\n\n\n

And, might I add, not all customers are created equal. Okay, maybe they\u2019re created equal, but they\u2019re not all of equal value. Some will be promiscuous and cheat on your brand while some will be buying the brand for the long haul.<\/p>\n\n\n\n

Here\u2019s a simple overview of how to calculate Lifetime Customer Value (\u201cLCV\u201d) \u2013<\/p>\n\n\n\n

\"customer<\/figure>\n\n\n\n

I\u2019ve highlighted one key element that will be your secret weapon for figuring out what all of these Facebook friends and Twitter followers are actually worth.<\/p>\n\n\n\n

\n

A customer\u2019s total value to your brand isn\u2019t just what the customer buys. It\u2019s also how much business the customer refers to you (over a lifetime).<\/p>\n<\/blockquote>\n\n\n\n

When it comes to figuring out what the next Twitter follower or the next Facebook friend is work, start by thinking about the power of social media to drive Customer Referral Value<\/strong>.<\/p>\n\n\n\n

When we work with clients on Conversion Optimization, we\u2019ll often put this measurement to work to ensure that we\u2019re optimizing both for next quarter and for the long haul.<\/p>\n\n\n\n

You can learn more about Customer Referral Value in Managing Customers For Profit: Strategies to Increase Profits and Build Loyalty<\/a> or contact us<\/a> about how we can help you with Conversion Optimization.<\/p>\n","protected":false},"excerpt":{"rendered":"

Social Media is a lot like the old media because it\u2019s almost impossible to measure its value using ROI \u2013 return on investment. Why should anyone invest marketing dollars into social media?<\/p>\n","protected":false},"author":1,"featured_media":3680,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"inline_featured_image":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[42],"tags":[],"coauthors":[35],"class_list":["post-3459","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archived"],"acf":[],"yoast_head":"\nPay it forward - Digital Scientists<\/title>\n<meta name=\"description\" content=\"Social Media is a lot like the old media because it\u2019s almost impossible to measure its value using ROI \u2013 return on investment. 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