Imagine you are the marketing manager of a newly opened local restaurant. The name of the restaurant is Light Bite Deli and is located on the south side of town near several office buildings. Your main target group is professionals who pay attention to healthy eating. You are trying to use social media to boost sales and raise brand awareness. You were given $30,000 to use on multiple social media sites to achieve your goals.

Question

Imagine you are the marketing manager of a newly opened local restaurant. The name of the restaurant is Light Bite Deli and is located on the south side of town near several office buildings. Your main target group is professionals who pay attention to healthy eating. You are trying to use social media to boost sales and raise brand awareness. You were given $30,000 to use on multiple social media sites to achieve your goals.
After carefully calculations, you predicted the average lifetime customer value is $500. Which is to say, you can potentially profit $500 from each customer during the entire future relationship with him or her.
Depending on the target demographics and shopping habits, you chose to use the following three social media platforms and you spent $10,000 of your budget on each of them. Below are the performances of each platform in the past three months.
Facebook: 1 in 50 people who visited your Facebook page became a customer and the Facebook page successfully attracted 2,000 new visitors.
Twitter: 1 in 25 people who followed your Twitter profile became a customer and the Twitter profile had 400 followers.
Instagram: 1 in 10 people who viewed your Instagram account became a customer and the Instagram account was viewed 240 times.
Calculate the ROI for each social media site.
Create a report detailing the findings. The report should include the following:
The name of each platform
The detailed calculation of ROI on each platform
Which platforms should or not be used to achieve your marketing goals
How should you reallocate your budget on each platform
Present your findings to the class. Discuss with your classmates why each platform performs differently.
In the space provided below, upload your report then submit your Project.

GPT-4o mini · Answer

# Social Media Marketing ROI Report for Light Bite Deli ## Introduction As the marketing manager of Light Bite Deli, our goal is to utilize social media effectively to increase sales and raise brand awareness among health-conscious professionals in the area. We allocated a budget of $30,000 across three platforms: Facebook, Twitter, and Instagram. This report calculates the return on investment (ROI) for each platform and provides recommendations for reallocating the budget based on their effectiveness. ## Performance Overview ### 1. Facebook - **Budget Spent**: $10,000 - **Visitors Attracted**: 2,000 - **Conversion Rate**: 1 in 50 - **Customers Acquired**: $$ \text{Customers} = \frac{2000}{50} = 40 $$ - **Lifetime Value (LTV) per Customer**: $500 - **Total Revenue Generated**: $$ \text{Revenue} = 40 \times 500 = 20,000 $$ - **ROI Calculation**: $$ \text{ROI} = \frac{\text{Total Revenue} - \text{Budget}}{\text{Budget}} \times 100 $$ $$ = \frac{20,000 - 10,000}{10,000} \times 100 = 100\% $$ ### 2. Twitter - **Budget Spent**: $10,000 - **Followers**: 400 - **Conversion Rate**: 1 in 25 - **Customers Acquired**: $$ \text{Customers} = \frac{400}{25} = 16 $$ - **Lifetime Value (LTV) per Customer**: $500 - **Total Revenue Generated**: $$ \text{Revenue} = 16 \times 500 = 8,000 $$ - **ROI Calculation**: $$ \text{ROI} = \frac{8,000 - 10,000}{10,000} \times 100 = -20\% $$ ### 3. Instagram - **Budget Spent**: $10,000 - **Views**: 240 - **Conversion Rate**: 1 in 10 - **Customers Acquired**: $$ \text{Customers} = \frac{240}{10} = 24 $$ - **Lifetime Value (LTV) per Customer**: $500 - **Total Revenue Generated**: $$ \text{Revenue} = 24 \times 500 = 12,000 $$ - **ROI Calculation**: $$ \text{ROI} = \frac{12,000 - 10,000}{10,000} \times 100 = 20\% $$ ## Summary of Findings ### ROI for Each Platform - **Facebook**: 100% - **Twitter**: -20% - **Instagram**: 20% ### Recommendations 1. **Continue using Facebook**: The platform shows a strong ROI of 100%. Given its ability to convert visitors effectively into customers, we should continue investing in Facebook. 2. **Revise Twitter Strategy**: With a negative ROI of -20%, Twitter is not performing well for our target market. I recommend either reducing the budget allocation here or experimenting with different strategies, such as targeted ads or promotional content, to improve engagement. 3. **Maintain a presence on Instagram**: With a positive ROI of 20%, Instagram is delivering reasonable returns. However, its performance could be enhanced further through interactive content, contests, or partnerships with local influencers to attract more views. ## Suggested Budget Reallocation - **Facebook**: Increase from $10,000 to $15,000 to capitalize on its strong performance. - **Twitter**: Reduce from $10,000 to $5,000, using this platform primarily for brand awareness and customer engagement rather than direct conversion. - **Instagram**: Incrementally increase from $10,000 to $12,000 to improve performance and engagement. ## Conclusion The analysis of each social media platform has provided valuable insights into how well our marketing budget is being utilized. By reallocating funds towards Facebook and Instagram, while dialing back on ineffective spending on Twitter, we can maximize our ROI and drive increased sales and brand awareness for Light Bite Deli. ## Class Discussion Points - Evaluate why Facebook has a higher conversion rate compared to Twitter and Instagram. - Discuss potential strategies to improve engagement and conversion on Twitter. - Explore the importance of content type on each platform in potentially influencing customer conversions. Thank you for your attention, and I look forward to our class discussion!