Economic Value – Module 4

The purpose of measuring economic value for a company like Ford (or most other major corporates) would be as a function that either increases revenue, reduces costs, or, ideally, performs both functions.

To measure the economic value of something like this, Ford could compare the amount it spends on sending out Mustang brochures, and calculate the ROI on that investment. They could then compare that baseline to the number of unique visitors that come to the “Mustang Customizer” Facebook page, and develop a comparative value penetration rate.

            

For example, we might say something like:

$25,000 spent on mailers / 30,000 customers we sent them out to = $0.83 / customer.

Remember two key points of information here: 1.) Brochures were sent like spam e-mail – not every customer actually wanted them. 2.) Brochures aren’t dynamic – the information contained within will become outdated and irrelevant quickly.

Now, if we consider that 1.) The Facebook audience has the potential to be much larger, and 2.) The costs associated directly with Facebook marketing are low; we might come to develop new figures like:

1 Week Development Time Spent on App at 30.00/hr = $1,200

Facebook Hosting = $0

$1,200 / 200,000 Facebook visitors = $0.006 / visitor

Now – neither method generates a guaranteed return, however, the potential for ROI is higher and the investment costs MUCH lower when using the Mustang customizer page. Additionally, the content on the page is dynamic and interactive, enticing the user to explore, (and potentially build their dream ‘Stang), whereas the content in the brochure is static.

It’s also important to remember that – for the most part – people are visiting the Facebook page because they want to – not because they simply received something in the mail by chance – hands down, this is a much better way to engage the customer base in terms of both monetary value and customer interactivity.

*NOTE: ALL VALUE FIGURES ARE FOR ILLUSTRATIVE PURPOSES ONLY