Show Me Your Money – Social Media ROI

Posted: 12/09/2012 in Enterprise 2.0
Tags: , , , , , , ,

Hello Folks, G’day…

This week topic I would like to talk about how ROI can be calculated for Enterprise 2.0 projects.

First of all >>>What is ROI?

Return On Investment (ROI) refers to the value returned by investment. It express how much profitable value is able to obtain for the cost of betting. Also, ROI is usually as the major business indicator and profitable goal of organisations.

The formula of ROI:

ROI = (Gain from Investment – Cost of Investment) / Cost of Investment


Nowadays, there are more companies which are staring to adopt social media tools. Why they want to implement social media tools? The answer is that they want to use this simple tool of investment to improve their profit, and create huger market.  Also, they want to know how social media really can help them to earn more and more money. According to Eric Harr, there are 5 Simple steps to measure ROI of social media.

Determine Your Social Media Spend (SMS).

Determine your Customer Lifetime Value (CLV).

Determine New Customer Value Via Social Media (SMV).

Calculate Customer Service Value (CSV).

Determine Impression Value (IV).

These five great factor that companies need to think about how they to add their business up via social media.

There are some examples of ROI in social media.

  • Subway Slim Down Challenge – Subway made a slim challenge. In order to attract more people to join, Subway made many commercial via TV, newspapers and many kinds of marketing activities. However, Subway found that there are 71% registers from Facebook.
  • Social media keeps the creme Brulee Man travelling – In America, there is a vender who smartly use Twitter to announce where the location every day ,and which flavour will be sold today. Also, he always asked customers’ comment. Yet, this method made him to have 12000 followers in a year. He really successfully have a well relationship with his followers.
  • ROI from Facebook ads – Vamplets is a small company which create vampire dolls. It implemented Facebook ads to be new channel for driving its revenue. It only had US$250 budget per month for ads, while those ads generated an additional $1,000 in revenue. It means Vamplets got 300% ROI.

If you’d like to have more further reading of ROI, there are some articles

Roi: How to Measure Return on Investment in Social Media

Social Media ROI, Money, and Burnout

A Simple Way to Calculate Social Media Return on Investment



The ROI of Social Media: 10 Case Studies

 Social Media ROI

 5 Simple Steps to Measure Social Media ROI


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