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How to Make Money with Social Media: An Insider’s Guide to Using New and Emerging Media to Grow Your Business, Second Edition by Reshma Shah, Jamie Turner

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23. All Roads in Social Media Should Lead to ROI

We’ve talked about where marketing has been and where it’s going. Now it’s time to talk about something that’s important right now: your return on investment (ROI). After all, the only real reason you’re setting up, running, and managing a social media campaign is to make money, right?

Before we dive into ROI, let’s talk about an important concept called customer lifetime value (CLV), which is the amount of revenue you’ll generate from one customer during the lifetime of your relationship.

For example, let’s assume you’re a cable TV provider who knows that the average customer spends $100 a month on your service. In 12 months, you generate $1,200 from the typical customer. But that customer doesn’t ...

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