My. My. My. What a pleasant and exciting week you have all made for me.
To refresh your memory, or to fill you in if you didn't read it, two weeks ago I held a little promotion in this column. I asked people to weigh in on how this section should look in 2009. You see, I'm not just about links these days. I'm now all about links and promotions!
So, I asked you to write in on how you might like to see this space shaped. And to entice you to participate, I offered to enter all respondents into a drawing for a $50 Amazon gift card.
The quality and quantity of the responses far exceeded my expectations. Every response I received was incredibly thoughtful and helpful. Thank you all so much for taking the time to respond.
Let's jump right into how the promotion went.
First, whenever you're doing a promotion of any kind, the key to success is to measure it. Set out goals, costs, and end results. Everything should have a dollar value attached to it.
If getting new orders is a goal, then the dollar value for each response is easy. But, like in my case, if the goal is e-mail responses, the dollar value is a little more vague. But that shouldn't stop you from assigning one.
I assigned a dollar value of $20 for each response. That's actually pretty conservative in this case. Again, if your goal was a specific sale, the dollar value would be real.
Second, you want to record several other pieces of data. For the promotions I'm running here, these were all the things I tracked:
- Date Campaign Is Running
- Name of the Campaign
- Promotion Incentive
- Cost of Promotion (Investment)
- Dollar value of each response
- Total Responses
- Total Payback
- ROI = [(Payback - Investment)/Investment)”*100
- Impressions of Campaign
- Did the Campaign meet the Objective and Goal?
- Campaign Winner
Third, it's very important that you fill out the first seven items before the campaign is run. Filling them out afterward is like peeking at the answers to the test before you take the test. You're less likely to accurately judge your expectations.
I highly recommend you set up a spreadsheet to track your promotions. A spreadsheet will make it a lot easier to quickly see what is and isn't successful. You can view the complete spreadsheet I'm using for my SEW promotions here.
My goal for this campaign: I expected about five mediocre responses. I wasn't sure people would really care.
The outcome, however, was much different.
I got 11 great responses. So, I more than doubled my expectations.
The campaign cost me $50 for the gift certificate. If I wanted to be more accurate, I could include the time to write the article and establish the promotion. That's something you might want to consider if you're judging the true cost of a promotion. You also would want to take into account the cost of a marketing agency, if they're helping you craft a promotion.
I valued each response at $20. That means I recouped $220 for my efforts. And again, I feel the true value of these responses is probably much higher -- more along the lines of $30-$50, or maybe even much more in the case of SEW. What if I could convert one of these people into a first time attendee for a Search Engine Strategies conference? What would the value of the response be then?
Each of these respondents are highly engaged readers. They clearly read the article from beginning to end. And they were interested in responding.
This means they're loyal to the SEW brand. They're more likely to engage in the brand, i.e., go to shows, listen to Webinars, click on ads, etc.
If this were a promotion I did for my own company, I would keep all of that in mind. I might be inclined to occasionally drop these people an e-mail and let them know about things I think they might be interested in. If the promotion were bigger than this, I might ask them if they would like to sign up for an informational newsletter when they submit their response.
Just be aware that people who engage with you and your brand are highly valuable to you.
Knowing all of this allows me to easily calculate the ROI of the promotion. I'm not going to get into the underlying complication of ROI here. When calculating ROI you really should take into account things like lifetime value of a response and many other factors.
To make things simple, the fundamental equation to calculate your ROI percentage is: ROI = [(Payback - Investment)/Investment)”*100.
The numbers for this promotion are: ROI = [($220 - $50)/$50)”*100 ROI = 340%.
That is what we call a massive success. A ROI of even 100 percent is great. And again, this formula is ROI at its most basic value.
This means, for the $50 I invested, I got a 340 percent return. Or, I got 3.4 times in net revenue from my investment. I made $170 ($220-$50) on this deal.
On top of that, I got all these great ideas and inspirations. How do you put a value on all of those? It's extremely difficult.
Next time, we'll look at some of the responses and then maybe (just maybe) we'll have another promotion.
But without further ado, the randomly selected winner of the $50 gift card is: Paul Rivero.
Congratulations, Paul! I'll post Paul's response next time, and look at some of the other great responses.
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