Determine the Value of a Check-in - dummies

Determine the Value of a Check-in

By Aaron Strout, Mike Schneider, B. J. Emerson

Location-based marketing really comes down to the check-in. If you can determine the value a check-in has for your business, you can determine how much you can afford to spend on an offer as well as marketing your program in general.

To measure your success, you need to compare the number of customers who have checked in with those who haven’t. If you don’t have an accurate way of tracking this, you can achieve this via a qualitative measure like a post-campaign customer survey. If you can tie a check-in to individual customer activity, this comparison should be a relatively straightforward process.

Lifetime value of a customer is a great metric to measure, but that takes years to measure properly. There are two ways to measure your campaign in the short term: customer value and customer loyalty.

You won’t be able to come up with an exact monetary value for a check-in, but you can create a value range for your customers. Follow these steps using your customer relationship management (CRM) program:

  1. Run your campaign for one to three months.

    You need to ensure you have enough data to collate. Allow at least one month; three months is even better. You should aim for 200 check-ins.

  2. Pull 200 customer check-ins (or a month’s worth, whichever is greater) from your CRM.

    If you have more, randomly select 200 of these customers along with their accompanying sales data.

  3. Pull an equal number of customers from your CRM who have not checked in.

    Ideally, this group of people roughly matches the high-level demographics of your customers who have checked in. In particular, match the male/female split and age range.

  4. Compare the average amount of money spent per customers who have checked in versus those that haven’t during that time.

  5. Subtract the amount of money you spent on your offer from your gross sales from the 200 customers that checked in to get the average spent.

    For instance, if you make $10,000 in gross sales but spent $250 on offers, subtract that amount of money. If you spent any incremental money on marketing or any other operational costs like hiring someone to manage your location-based marketing program, subtract that amount of money from the net as well.

  6. Compare the average spent per customer to the non–check-ins average spent per customer.

    Ideally, the amount of money that non–check-in customers spent on average is less than the number for those checking in.

  7. Subtract the amount of the check-in customer from the non–check-in customer.

    Now you have the value of a check-in. Assuming the net sales for the non–check-ins averages $40/customer and the net average value for those checking in is $48.75, the value of your check-in would be $8.75/customer.

If the average value of the users who don’t check-in comes out higher than the average value of those who do check in, you shouldn’t despair. You may need to allow more time to elapse before measuring the value. You can also look at other metrics, including lifetime value, loyalty, and number of referrals (word of mouth) to determine value.