One is silver and the other gold
You might remember the words to that old Girl Scout song: “Make new friends but keep the old; one is silver and the other gold.” To retain customers, apply that philosophy to your policy of customer satisfaction. That may mean anything from sending holiday greetings to establishing a loyalty program with discounts for repeat buyers, from entering repeat customers into a special sweepstakes to offering a coupon on their next purchase when they sign up for a newsletter.
A marketing truism states that it costs anywhere from 3 to 30 times more to acquire a new customer than to retain an existing one. (For details, see www.linkedin.com/pulse/what-cost-customer-acquisition-vs-retention-ian-kingwill.) Although costs vary with each type of business, it’s common sense to listen to customers’ concerns, complaints, product ideas, and desires.
Thus, while you lavish time and attention on social marketing to fill the top of your funnel with new prospects, don’t forget its value for improving relationships with current customers and nurturing their involvement with your brand.
Establishing Key Performance Indicators for Sales
If you track ROI, at some point you must track revenue and profits as business metrics. Otherwise, there’s no ROI to compute. Unlike the previous emphasis on social media for customer engagement, recent statistics show a rapid increase in social commerce (direct sales from social media), as shown in Figure 2-2. According to data from Statista, social commerce sales in the United States is expected to quadruple in the next five years, from $22 billion in 2019 to $84 billion in 2024.
If you sell online, your storefront should provide ways for you to slice and dice sales to obtain crucial data. However, if your sales come from services, from a brick-and-mortar store, or from large contractual purchases, you probably need to obtain revenue statistics from financial or other external records to plug into your ROI calculation.
Source: www.statista.com/statistics/277045/us-social-commerce-revenue-forecast/#:~:text=In%202019%2C%20social%20commerce%20sales,U.S.%20retail%20e%2Dcommerce%20sales.
FIGURE 2-2: Social commerce revenues will grow rapidly over the next five years (in billions).
Just as with performance metrics, you should be able to acquire certain key performance indicators (KPI) for sales by using storefront statistics. Confirm that you can access this data before purchasing your e-commerce package:
You should be able to determine how often customers buy (number of transactions per month), how many new customers you acquire (reach), and how much they spend per transaction (yield).
Look for sales reports by average dollar amount as well as by number of sales. Plugging average numbers into an ROI calculation is easier, and the results are close enough as long as the inputs are consistent.
You should be able to find order totals for any specified timeframe so that you can track sales tied to promotions, marketing activities, and sale announcements.
Look for the capability to sort sales by new and repeat customers; to allow for future, personalized offers; and to distinguish numbers for CAC.
Your sales statistics should include a conversion funnel (as described in Chapter 1 of this minibook). Try to trace the path upstream so that you can identify sales initiated from social media.
Check that data can be exported to a spreadsheet.
Make sure that you can collect statistics on the use of promotion codes by number and dollar value so that you can decide which promotions are the most successful.
Having store reports that break down sales by product is helpful. Sometimes called a product tree, this report shows which products are selling by SKU (stock keeping unit) and category.
Table 2-2 lists some storefront options that integrate with social media and offer sales analytics. Unfortunately, not all third-party storefront solutions offer ideal tracking. Many storefront solutions use Google Analytics, shown in Figure 2-3, to track transactions.
TABLE 2-2 Social Media Store Solutions Offering Sales Statistics
| Name | URL | Type of Sales Stats Available |
|---|---|---|
| Google Analytics ECommerce Tracking |
https://developers.google.com/analytics/devguides/collection/analyticsjs
|
Google Analytics for e-commerce. |
| Ecwid |
www.ecwid.com/payvment
|
Integrated storefront that works on social media, mobile, and blog sites. |
| ProductCart |
www.productcart.com
|
Google Analytics integration at the product level. |
| Shopify |
www.shopify.com
|
Offers its own reports as well as integration with Google Analytics, Facebook pixel, and Pinterest tag. |
| BigCommerce |
www.bigcommerce.com
|
Social commerce platform that works with Instagram, Facebook, Pinterest, as well as eBay, Amazon, and Google Shopping. |
| 3dcart |
www.3dcart.com
|
E-commerce platform that is a one-stop shop for creating an online store. It connects with Facebook, eBay, Amazon, and other channels. |
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