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In my post last week, I mentioned 5 things that social media professionals must consider when developing their programs in 2015. Better measurement and ROI were rightly the first things on the list.
At the turn of the 20th century, Philadelphia retailer John Wanamaker remarked that, "I know I waste half of my advertising [dollars], I just don't know which half." Well some CMOs and marketing professionals today still deal with the same unknowingness that Mr. Wannamaker experienced over 110 years ago.
Social media marketing brings with it the expectation that everything is connected and everything is measurable. This is mostly true, but as our parents taught us, "just because you can do something doesn't mean you should." For social media marketing, just because you can measure something doesn't mean it has value.
While there are a lot of things we can measure in social media, too often our industry has focused on numbers that seemed exciting and dynamic (social media friends and followers, anyone?) but didn't quite bridge to the metrics that really mattered to the CEO and his or her executive leadership team. In 99% of organizations, those metrics are revenue growth and cost reduction.
Of these two metrics, cost reduction is the easier to quantify. And two areas where our customers see their most noticeable cost avoidance is with customer support and market intelligence.
I believe that Social Customer Service (or Social Customer Care) will be one of the biggest growth areas in our industry this year. It's already growing like crazy — Aberdeen Group noted that social customer care programs increased fivefold from 12% on 2010 to 59% in 2013.
Today, customers expect to be supported on the platform that they choose (and Nielsen says 33% of consumers prefer to contact brands on social media rather than the telephone). And their expectations don't end with the right platform. They also want answers fast. Edison Research says that 42% of consumers complaining on social media expect a 60-minute response time.
So, these statistics on social customer service are impactful, but showing impact doesn't drive cost reduction. Thankfully, some of our clients are finding that delivering what the customer wants (and expects) with social customer service is also good financially. Some clients are finding the cost of resolving customer issues via social media is 1/3 the cost of a phone interaction and 2/3 that of an email interaction. That's significant cost reduction. But the benefits don't end there — studies show customer retention increases and it's logical to assume employee satisfaction does as well — as most folks prefer to deal with happier customers. (For more on this check out NM Incite's report and this McKenzie study.)
Cost avoidance can happen in the marketing and R&D departments as well. How much does your organization spend on marketing insights? From focus groups to brand audits to competitive analysis to product feature requests, companies spend a good deal trying to understand their customers better. While social media can't completely replace all primary and secondary research costs, there are some things which social can do cheaper and I'd say better.
Take feature request auditing — a mainstay of technology and software companies. R&D labs spend a good deal of effort trying to understand which features customers want to see in updated products. They are curious on how best to prioritize innovations on their product road maps. Do customers want a device with better battery life or a device that's smaller and more lightweight? A review of chatter in Social Studio's Analyze tool can tell you which feature and potential product benefit is being talked about more often in over a billion sources.
How much would a company spend on primary research to discover those insights? My bet is that it would be more than an annual subscription to Social Studio. And data that can be gleaned in minutes in virtually real-time with actionable social listening will always trump a study that takes weeks or months to complete. The ability to run studies in real-time and adjust on-the-fly completely changes the way marketers have done research for decades.
Social is coming into its own for showing direct sales lift. While social will probably never win the last-click-attribution war, most will agree that social can play a significant role in driving brand preference, consideration, and purchase.
So, are companies making money with social? The answer is yes, all across the lead-to-deal continuum. Whether it's on the front-end of the sales cycle with initial lead generation or closer to purchase conversion by driving customers to online shopping carts or into stores with trackable coupons, social media is driving revenue for the brands doing it correctly.
When most people think about lead generation, they immediately think pure B2B plays with a traditional sales professional "mining their patch." While many B2B sales teams I have worked with have seen revenue growth attributed to social media engagement with this type of activity, it's important to note how many consumer-facing organizations are also driving lead generation in social media.
Chris Bennett notes in his blog post on Entreprenur.com that brands like Dropbox, Airbnb, and Uber are all using social media to encourage their current followers to invite their friends to sign up for services. The exciting thing here is that this activity is the perfect mix of Art & Science — using technology (science) to drive what is the oldest type (and many would say still most effective) of advertising — word of mouth referrals from people you trust.
Oliver Blanchard's quote which I mentioned in my previous post deserves a second mention. "You can't measure what you do not value or know how to value." As marketers, we need to strive to think more like our business leaders, but leverage the insights and experience we have as marketing leaders. Right brain and left brain, unite!
I'd love to hear your thoughts and comments on this post. Next week, we'll use more of the left side of our brains when I discuss storytelling and the Art of Purposeful Edutainment.
For more research on social trends in 2015, download our latest research report, The 2015 State of Marketing.
