Why Know Your ROI?

ROI or Return On Investment, has gotten more “press” lately than one might have ever imagined, but that is what has happened because of the Social Media Marketing phenomena.


So now how can you use ROI in figuring out if you should be involved in Social Media Marketing or not?

Let’s start with the value of a customer. Let’s say a typical customer spends 10,000 a year, and is your client for 5 years. If your profit margin is 20% the average new customer is worth 10,000. Once we know that we can plug in the conversion rates to figure out the value of a website visitor, a twitter follower, a webcast registrant a Social Media friend or any other kind of internet hit.

So if we say that your twitter posts bring you 5000 monthly visitors and you can convert 50 or them to a customer, that is worth 50,000 a year to your business. If a SEO can bring you 1,000 new visitors and you have a conversion ratio of 0.3% you just got $30,000 a year in value. If you spent less than that you have a positive ROI.

Larson Notes & Satire: Life should be so easy. But if you have a clear idea of what it costs you to get those needed hits, you can start to understand if you should take the time, outsource the program or bring in a person to do it internally.

So why aren’t more businesses using these very simple kinds of tools? 1st they don’t know the value of a customer. Take the time to fix that problem! Second, start to use the tools of web analytics. Third, set up custom URL or Landing pages so you know where people are coming from, be it Natural Search, Facebook, Twitter, LinkedIn or any of the Social Media sites you’re in.

Does it take some time? Yes. Does it take some effort? A little. Is it worth it? You decide.

Better yet. Contract the project out with us.

Howard Larson
Larson & Associates
Target Marketing & Telesales Professionals for new account acquisition
Making good businesses great and great businesses even better
847-991-0488
howard@larsonassociates.ws
http://www.larsonassociates.ws/
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P.S. We make telesales for small business affordable by offering programs down to only 15 hours a week. Maybe you could add telesales into your marketing mix call today and find out.

P.P.S. An American Company, marketing American Companies! Call or email to get an appointment to pick my brain (a 125.00 value) for 30 minutes.