How Do You Determine A Social Media Budget For A Subscription Site?

[AmandaSlabber]

I am in the process of creating a content subscription website. How do I determine a social media budget based on the sales conversion rate I require to make the business plan work?

[Kidas]

Without knowing the kind of business you are in, it is kind of difficult.

Nevertheless, you can work with some rule of thumb data.

Look at the revenue per customer per year and the costs to service that customer; the cost of acquisition of each customer; the retention rate and so on, and this can give you an idea of how sustainable the business is.

For example, if you estimate that you can get revenues of EUR240 per year and it costs you EUR160 to service the customer, and the cost of acquiring the customer using social media ads, for example, is EUR50, the in the first year you would expect to make Eur 30 per customer, rising to EUR80 in subsequent years. If you have a customer retention rate of 50%, then the average profit per customer is around EUR55 per year.

If there is any extra cost, such as returns or rebates, that will come out of the EUR55 per customer per year.

Hope it helps