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Calculating the Value of a Check-in

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by: Adam Steinberg (@adams472)
20 June 2012

While most marketers know they need to be paying attention to location-based marketing and check-ins, many aren't sure of the value and ROI of trying to get more check-ins at their locations.

For those marketers who are uncertain of the ROI of check-ins, there's good news. A check-in is a highly valuable — if not the most valuable — social media action that can be easily tied to revenue.

Let's break down what a check-in from Foursquare or Facebook suggests:

  1. A check-in implies that a customer is actually visiting your location.
  2. A check-in means that one of your customers has likely shared — and referred — your brand to their friends.

The incredible value of check-ins comes from these two simultaneous but separate actions: a customer visit and a social share.

So, how can you calculate the value of a check-in?

The first thing you'll need to know is the average value of a customer visit. If you're a restaurant, a customer visit might be worth $6 in sales and $1 in profit. If you're a retailer, a visit might be worth $30 in sales and $3 in profit.  By engaging your customers through check-ins and driving new visits, you're creating a huge amount of value.

For example, let's say your restaurant has 20,000 check-ins during a 30-day period. If 10,000 of these people checked in and visited because of a program you’re running (and wouldn’t have visited without it), you've just generated $60,000 in new revenue and $10,000 in new profits for your business.

Now, let's turn to the social sharing element of a check-in. Most studies have pegged the value of a social share between 50 cents and $1.25. (This value is based on ultimately converting a customer's friends into customers.)

Again, assuming your business experiences 20,000 check-ins, you can peg the value of these social shares between $10,000 and $25,000.

When you add up these two numbers, you can see how location-based marketing programs can easily generate tens of thousands of dollars — if not hundreds of thousands — of new value. And that’s not even factoring in the increased engagement and loyalty these campaigns typically foster.

So next time you're considering a location-based marketing program, use these ROI metrics to help you evaluate the value of the program you’re thinking about launching.

What do you think about these metrics? Is there any other metric you’d add? Post your thoughts below.

Related Resources:
1) Tip Sheet: “7 Tips for Getting Started with Location-Based Marketing
2) Blog: “How B2B Marketers Can Use Location-Based Marketing at Events
3) Blog: “4 Ways to Work Check-ins into Your Marketing Mix

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