Rory Martin

Social Media ROI for the Consumable Brand

Return on Investment Projection

Introduction

In order to measure Social Media ROI you must define clear measureable goals. RoryMartin.com’s online marketing campaigns deliver both measureable revenue as well as ancillary brand building benefits for your company. For consumable brands, building a trust relationship with your visitors using your “brand story” is key, in igniting dialogue and keeping your visitors engaged beyond just marketing to them. Social Media enables you to develop and publish your brand story and key product messages in a way that directly reaches your market segments and engages your visitors. This is often measured as “ancillary” even though it directly affects your financial bottom line.

It is important to understand the value of a visitor. Each visitor becomes one of three things; a browser, an influencer or a transacting customer. We can infer and assign an estimated value to browsers and influencers but these values are subjective at best.

For the purposes of this document we will focus on transacting customers and the projected Return on Investment.

Background

In 2010, the “Famecount Index” came out with a list of the 10 most popular consumer brands, and found that food and drinks brands accounted for 6 out of the top 10 worldwide consumer brands. Starbucks topped the list, followed by Coca-Cola and Whole foods. Online shoe and clothing retailer Zappos was the highest ranked non-food and drinks consumer brand coming in at #7. The reason for their success is based on engagement, adaptability, and the ability to provide their customers with the incentive to purchase.

More importantly, the increase of the profits had a correlation with each brand’s social media ventures, especially as the use of various social sites lead to the discovery of a certain company’s product. Because consumers often enter stores with the brands they want to buy already in mind, it’s important to engage the customer before they set foot in the store.

Social commerce sales are predicted to total $9.2 billion by the end of 2012 and are expected to reach $14.25 billion in 2013 and $30 billion in 2015. Over 160 million people shop online in 2012, which should increase to over 190 million in 2016. This is an average of $1800 per person per year. By the numbers:

  • 79% of online shoppers spend 50% of their online shopping time researching products.
  • 61% of global internet users research products online.
  • 40% of Twitter users regularly search for products on Twitter, and 12% have purchased a product because of the info they have found on Twitter.
  • 47% of customers are likely to purchase from a brand that they follow or like, and visitors to CPG brand sites spend 37% more than non-visitors on that brand, in sztore.
  • 55% of consumers talk about their purchases socially on social networking sites.
  • Social media has a 100% higher lead-to-close rate than outbound marketing
  • 67% of customers will like a Facebook page to save 25% or more
  • 17% will tweet or retweet a deal to save 25% or more
  • 28% of consumers share deals through social media
  • 12% have looked for deals on social media sites using their smartphones

Customer service also plays a large role in purchasing decisions. By the numbers:

  • Social media users who receive excellent customer service from a brand will spend, on average, 21% more than non-social customers.
  • 83% of socially savvy customers have walked away from a purchase in the last year, because of a negative customer service experience.
  • On average companies respond to only 30% of social media fans’ feedback
  • 25% of Twitter users connect with a brand on the platform (over one third of these do so for discounts and promotions)
  • Over 25% of Twitter users would consider contacting a business via the platform

In general, people who fan or like a business’s social media account, do so because they already like the brand. Where the old marketing mantra was “convince and convert,” a more current model for marketing is “converse and convert.” Social media savvy consumers show a higher level of engagement with brands they are connected to than they do with other brands, which in turn increases the likelihood they will remember your brand both online and offline.

Based upon current research and trends we are projecting approximately a 10-17% increase in engagement. There will be many more benefits we can’t yet measure based on the unknown positive impact we’ll have on your target audience. We are using a median industry standard of 14% to show you real ROI to justify your investment. However, the return could be much higher.

Outline of Deliverables on 5K monthly budget

Facebook:

Action

Fans

Monthly Calculation for Best-Case and Worst-Case Promotion Scenarios

Increase visits of current fans

3,679

Best-Case: 25%
= 919 fans dine once a month with a $20 check average
= $18,320

Worst-Case: 10%
= 367 fans dine once a month with a $20 check average
= $7,340

 

2,325

Best-Case: 25%
= 581 fans dine once a month with a $20 check average
= $11,620

Worst-Case: 10%
= 232 fans dine once a month with a $20 check average
= $4,640

 

1,200

Best-Case: 25%
= 300 fans dine once a month with a $20 check average
= $6,000

Worst-Case: 10%
= 120 fans dine once a month with a $20 check average
= $2,400

Increase Fan Base with no incentive

50 – 100 per month

Best-Case: 100 new fans per month
= one visit with $20 check average
= $2,000

Worst-Case: 50 new fans per month
= one visit with $20 check average
= $1,000

Increase Fan Base with second cocktail free incentive

50 – 100 per month

Best-Case: 100 new fans per month
= one visit with $42 check average minus $10 coupon loss
= $3,200

Worst-Case: 50 new fans per month
= one visit with $42 check average minus $10 coupon loss
= $1,600

Twitter:

Action

Followers

Monthly Calculation for Best-Case and Worst-Case Promotion Scenarios

Increase visits of current followers

481

Best-Case: 25%
= 120 followers dine once a month with a $20 check average
= $2,400

Worst-Case: 10%
= 48 followers dine once a month with a $20 check average
= $960

Increase Seattle area followers

50 – 100 per month

Best-Case: 100 new fans per month
= one visit with $20 check average
= $2,000

Worst-Case: 50 new fans per month
= one visit with $20 check average
= $1,000

Increase Seattle area followers with second cocktail free incentive*

50 – 100 per month

Best-Case: 100 new fans per month
= one visit with $42 check average minus $10 coupon loss
= $3,200

Worst-Case: 50 new fans per month
= one visit with $42 check average minus $10 coupon loss
= $1,600

Total ROI for One Month of Twitter Promotion Factoring in All Scenarios.

$7,600

$3,560

*Studies show that customers with a discount coupon for cocktails typically increase their check averages by 15-50%.

ROI calculations are based on a check average of $20 except in the instance of the cocktail incentive. This number could be adjusted to accurately reflect specific guest check averages, which may be higher than $20.

Event Promotion

Increase in Attendees

Monthly Calculation for Best-Case and Worst-Case Promotion Scenarios

Tuesday Night Events

100

Best-Case:
= 100 new event attendees spend $60
= $6,000

Worst-Case:
= 100 new event attendees spend $25
= $2,500

Tuesday Night Events

50

Best-Case:
= 50 new event attendees spend $60
= $3,000

Worst-Case:
= 50 new event attendees spend $25
= $1,250

Total ROI for One Month of Event Promotion Factoring in All Scenarios.

$9,000

$3,750

How to Track

It is important to identify ways in which a brand can track increased sales.

  • Track coupons downloaded and used
  • Announce special offers/coupons only through social media to see direct link in promotion and increase of sales
  • Identify promo codes for tracking through a POS system
  • Measure daily check-ins via Facebook, Foursquare
  • Use Twitter hashtags to monitor tweets about the brand

How to Measure Social Impact

Social impact is based on many factors. The most important of which are:

SCORING:

  • 4 points or less: The business is less than optimized, missing key chances to convert potential sales.
  • 5 points: The basics are covered, which is better than most but far from optimized.
  • 6 to 9 points: The business is doing better than most but is still not fully optimized.
  • 10 points: The business is fully optimized. Consider expanding to events and other promotions.

It is important not only to use social media to promote your brick and mortar establishment, but to also use your social media establishment to promote your social media accounts. If you are not using these social accounts, you’re missing out on valuable opportunities to connect with clients who are waiting to connect with you.

Social Solutions from RoryMartin.com

Ultimately a business’s goals should be to convert potential clients into actual clients. Using social media to promote a brick and mortar establishment, as well as events will ensure the leveraging the power of these interactions. Using social media increases brand awareness, builds excitement around the brand name, and ultimately converts conversations into customers.