How to Measure Business Value When Sales Take Place Offline
It is a well known fact that social media marketing is one of the most effective platforms for recruiting potential new clients and to generate exposure for your business. Performed correctly, social media marketing will ultimately result in engagement with potential clients that will be converted into sales.
However, the unfortunate downside to social media marketing is that it does not always receive the credit for the sales it generates. In some instances, these sales are not going to take place online. However, when this scenario does occur, you have several options for monitoring the business value of social media marketing.
The Creation of Soft Conversion Values
Let’s say a visitor to your business’s website orders a catalog of your products. They request a price quote, and they enroll in your company’s email marketing program. These are all promising signs that point to future sales. After you have generated the rate at which actions such as these results in direct sales, an estimated value can be assigned to each one.
As an example, let’s say the Acme Truck Leasing Company maintains a blog about managing fleets of trucks. This blog is promoted through the standard plethora of social media channels. One of their blog posts attracts a visitor from Twitter. Upon visiting the website, this visitor begins to check out the website, and they eventually request a price quote. As with most businesses, this quote request is then logged into the Acme CRM system.
At a later date, an analysis of the data from the CRM system reveals that 5% of all individuals who requested a quote generated new sales. Let’s say that the average lifetime value of a new client is $10,000.00. Taking 100 requests for price quotes and assuming that 5% of these quotes generate sales, the estimated total value of the sales made is $50,000.00. However, what is the average value of each lead that has been created? To calculate this, Acme uses the following formula:
Lifetime Value of a Customer ($50,000) x % of Requests That Were Converted to Sales (5%) = Average Value ($2,500)
Assuming that you are using Google Analytics Social Value reports, Acme is able to see all of the quote requests conversions that were generated from social media marketing, including both assisted conversions and last click conversions. As an additional bonus, Acme is also able to view an estimate of the average value of each generated lead.
In order to keep the math valid and accurate, Acme should periodically validate their average conversion rate. It is important to remember that this number is just an average, and it will change over time.
CRM Data & Analytics Data
If, for some reason, goal value estimates just aren’t cutting it, another option you will have will be to play connect the dots between the actions taken on your business’s site and the eventual sales that occur. This will require you to integrate the right web analytics tools with your business’s CRM software. An excellent option for high quality web analytics software is Google Analytics.
Using Google Analytics via ecommerce tracking, you will be able to calculate the following:
- The % of visitors who come from social media channels who asked for a price quote and eventually purchased services or goods, as compared to references from other sources of lead generation.
- The average amount of time it takes for your business to close a social media lead.
- The lifetime value of leads generated from social media marketing, as compared to other sources of lead generation.