Spotting Trends

Not the same as trend spotting, I'm afraid. This is about measurement and social media. One of the most overlooked considerations when starting to gather increased in sales numbers is the corresponding acquisition costs. Direct marketers and lead generation experts are intimately familiar with this metric -- and you should get to know it very well.

If you have high sales and a negative return on those sales, you're going to have a very difficult conversation with your CFO, and you want her as your friend. How do you keep an eye on costs? By looking at trends during a program. With careful consideration you will spot variables or deltas in your numbers.

Find the cost by dividing the total marketing dollars spent on a program by the following, which are some of the key trends:

• number of newly acquired customers
• number of customer referrals
• number of transactions
• changes in repeat customers
• uplift in other marketing channels

When you integrate tactics, which is my recommendation, make sure you have a way of tracking which one gave you the results and the total measurement against a benchmark measured before the program.

So while it's great to measure things like:

• customer retention
• customer value
• competitive customers
• referral engine
• new leads
• Web site conversions
• length of sales cycle

Make sure you're weighing those measurements against the corresponding acquisition costs. What costs have you not factored in your social media program? How do you track each tactic?

[image by Darren Hester]

© 2010 Valeria Maltoni. All rights reserved.

Comments

[Rich Becker]

Hey Valeria,

Excellent advice. I especially love that you've reminded people to measure the investment vs. the outcome.

Of course, it's always worthwhile to consider how sometimes Contact A doesn't do X but convinces Contact B and or Contact C to take action. Everything gets muddled the further out we travel.

For my own efforts, my work in social media is largely unmeasured unless I'm conducting different experiments. For my clients, it's primary a combination of benchmarking and traceable outcomes. You really need both.

For example, if we assist with a blog and the blog drives someone to a Web site where a transaction occurs a month from now, it can be difficult to trace that path. So benchmarking to some of the great points you provided helps demonstrate a big picture perspective.

Best,
Rich

[Valeria Maltoni]

One of the less popular posts of recent :) While this is not sexy stuff, it's so important to know! Interesting that you would not measure your own social media. I do like the experiments a lot, especially those of the behavioral kind, as you know.

[Megan Zuniga]

Great post. Social media is almost unmeasurable that why other companies are reluctant to try it. It's hard to predict the ROI but the good part is it's cheap, but very time consuming. And this is part of the business is important for any business and not just for social media related businesses. Just cause your business is doing great doesn't mean you stop guarding your expenses. Sharing tips on how to reduce costs on businesses.

[Valeria Maltoni]

The most interesting part of this comment, aside from the fact that social media can be measured, is the links you are trying to sneak into a self-revolving comment, which seems to have nothing to do with the post. Yet, there are perfectly good ways to connect with people who are interested in what you're selling... fascinating!