Andrew Swenson is marketing strategist in St. Louis. He is a believer of youth in biz, lover of indie rock, and blogger at wordpost.org.
Consider the fact that while 59% marketers will spend more on social media this year, some 75% of them haven't been able to demonstrate concrete returns.
If 2010 is the year of social media measurement, the year when we finally gain the experience we need to prove ROI, then we must focus our decision-making on what social relationships are doing for our bottom line, not some empty rhetoric about ROI as "return on influence."
In short, we must focus on our customer relationships not just from a relational standpoint, but from a transactional standpoint. We must segment, analyze and follow the money.
Segment
A few days ago, Olivier Blanchard passed along a version of this tweet with the hashtag #notsosure:
Social media projected to be 48% of brand experience in 2010 - Anne Greer, 3M. #tcbimage
And we shouldn't be so sure. Whether Anne Greer actually uttered the statement is beside the point. It's this kind of audacious claim that strikes needless panic in the offices of executives.
But brand experience in "social media" is far too broad to be useful. The only way to know which social tools and networks to target, is to segment your customers not just by purchase history or demographic information, but by the social ecosystem in which the participate. It could be that your customers hate Facebook (or at least won't fan you there).
Remember, there is a REASON [different segments of your customer base] spend their time within the social ecosystem on Yelp and not Facebook – because that’s the community they PREFER.
And sure, we've established that social relationships are a far better way to market than traditional advertising, but maybe traditional tools work just fine for your business.
I once worked with a client who spent roughly 17% of their marketing budget creating and sending an annual catalog. In surveys, nearly 80% of their customers had no interaction with the brand online. They purchased solely because they received a dopey catalog.
Analyze
In considering where to spend social media dollars, it's important not only to have a sense of which ecosystems to target, it's also important to analyze what's hurting your bottom line.
For my catalog client, their cost of new customer acquisition was far too high ( 83% of their marketing budget was spent on 20% of their customer base).
For others, slow and unresponsive customer service may be causing customer attrition.
For others, new product innovation may be stale (and in need of a good dose of crowdsourcing).
And for some, a lack of solid website content may be the root cause of less than stellar traffic.
Finding areas of weakness allows you to target and measure specific action in your social media strategy. Trying to convince the 80% of my catalog client's customers to follow them on Facebook would be a waste of time and money. They aren't interested in that ecosystem.
(As a caveat, if you need help measuring how your social strategies are working to improve your weaknesses, check out Amber Naslund's excellent series on practical social media measurement).
Follow the money
We can talk about how much social media builds better customer relationships, or fosters innovation, or helps spread happiness and rainbows all we want.
But in the end, social media actions should be tied in some way to the bottom line (not always the top line).
In order to figure out where are efforts are best served, however, we must define how and where our customers interact, and match the potential of relationships in those ecosystems to organizational weaknesses that are currently unsupported.
Sorry social media gurus, it's not all about relationships. It's about the money too.
Photo Credit: carolyncoles
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tagged as social analysis, social marketing, social measurement, social media segmenting, social metrics, social roi, social segmenting
{ 8 comments… read them below or add one }
Social MArketing is still practically inexpensive until today. But with their influences rising like wild fire, it's a matter of time when we have to pay for them.
First, I dispute that social media is nearly half of brand experience for most consumers. This is nonsense. The average U.S. consumer spends 5 hours and 9 minutes in front of live television vs. less than an hour on social media; and our daily lives (walking, talking, seeing, listening to other humans talking) exposes us to much more information.
Second, I love your focus on tracking. But there is a BIG problem few have addressed — how do we listen to social media to observe real trends? Most chatter goes up and down quickly. Balloon Boy and Skittles both crested and fell within a week. So how can a brand really listen to assess what consumers will need a year or two from now — required, since big companies take a year to move products into a production pipeline.
Trending. Real trending. That predicts societal needs a year out. Throw that question out at a guru or two at your next conference and let me know if they have a coherent answer. Until we can use the data to make predictions beyond our noses, the data won't help us very much at all.
Fucking awesome points.
The first one is dead on. Can't even remotely dismiss it. I think Ann Greer may have been on meth when she came up with that figure.
Second? No. That kind of analysis is best done internally via a walled garden of customers/consumers. You can't drink directly from the fire hose. If you take aggregate data from a larger network…you have to use some type of filtering method to discern which data is valuable and which isn't.
I'd put more credence in a consumer who uses your product then a so called “social influencer”. After all…they have first hand knowledge.
Ditto to Stuarts remarks.
I'm hoping that someone accidentally misrepresented Greer in that tweet. I maybe should have been more explicit in the post—those types of comments do nothing but distract. How are we to measure social media brand engagement anyway? I'm leery of trusting numbers without a credible URL or a data set.
Second, I think that it's necessary, before we look to large scale trends (as Stuart said, “fire hose”), that we look at the microtrending stories the data we've gathered from customers is telling us. If an organization has a very low cost of new customer acquisition, but a very high retention rate, then I think that organization's focus in their social strategies should primarily reflect their need to retain customers.
I've just seen far too many institutions writing social media engagement plans through their own intuition, without looking to what their data tells them they need to do better.
But on society need a year out, I think we're doing some of this prediction when we look at microtrends (a la Mark Penn – http://www.microtrending.com/ ]. Penn was able to find a small faction of women who he called “soccer moms” that helped to elect Clinton. This without social network data.
I think that too often we focus on the “next big thing,” when in fact, businesses can sometimes benefit more greatly from creating a product that fit the needs of 2000 hardcore fans of some obscure form of scrap booking.
But I do have an honest question on trending, because your point has made me curious: Is there anyone you see out there who is moving in the right direction in terms of data-gathering and fast action?
Social MArketing is still practically inexpensive until today. But with their influences rising like wild fire, it's a matter of time when we have to pay for them.
First, I dispute that social media is nearly half of brand experience for most consumers. This is nonsense. The average U.S. consumer spends 5 hours and 9 minutes in front of live television vs. less than an hour on social media; and our daily lives (walking, talking, seeing, listening to other humans talking) exposes us to much more information.
Second, I love your focus on tracking. But there is a BIG problem few have addressed — how do we listen to social media to observe real trends? Most chatter goes up and down quickly. Balloon Boy and Skittles both crested and fell within a week. So how can a brand really listen to assess what consumers will need a year or two from now — required, since big companies take a year to move products into a production pipeline.
Trending. Real trending. That predicts societal needs a year out. Throw that question out at a guru or two at your next conference and let me know if they have a coherent answer. Until we can use the data to make predictions beyond our noses, the data won't help us very much at all.
Fucking awesome points.
The first one is dead on. Can't even remotely dismiss it. I think Ann Greer may have been on meth when she came up with that figure.
Second? No. That kind of analysis is best done internally via a walled garden of customers/consumers. You can't drink directly from the fire hose. If you take aggregate data from a larger network…you have to use some type of filtering method to discern which data is valuable and which isn't.
I'd put more credence in a consumer who uses your product then a so called “social influencer”. After all…they have first hand knowledge.
Ditto to Stuarts remarks.
I'm hoping that someone accidentally misrepresented Greer in that tweet. I maybe should have been more explicit in the post—those types of comments do nothing but distract. How are we to measure social media brand engagement anyway? I'm leery of trusting numbers without a credible URL or a data set.
Second, I think that it's necessary, before we look to large scale trends (as Stuart said, “fire hose”), that we look at the microtrending stories the data we've gathered from customers is telling us. If an organization has a very low cost of new customer acquisition, but a very high retention rate, then I think that organization's focus in their social strategies should primarily reflect their need to retain customers.
I've just seen far too many institutions writing social media engagement plans through their own intuition, without looking to what their data tells them they need to do better.
But on society need a year out, I think we're doing some of this prediction when we look at microtrends (a la Mark Penn – http://www.microtrending.com/ ]. Penn was able to find a small faction of women who he called “soccer moms” that helped to elect Clinton. This without social network data.
I think that too often we focus on the “next big thing,” when in fact, businesses can sometimes benefit more greatly from creating a product that fit the needs of 2000 hardcore fans of some obscure form of scrap booking.
But I do have an honest question on trending, because your point has made me curious: Is there anyone you see out there who is moving in the right direction in terms of data-gathering and fast action?
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