For the next few minutes, I want you to forget everything you have ever been told about social media and social media marketing. I want you to forget about the importance of likes and followers and shares and whatever other social media metrics “social media experts” told you were important. I want you to take a step back and think about your business. I want you to think about what you are trying to accomplish, business-wise, this year. For some, the answer will be growth, more customers, more sales. For others, it will be coming up with new products, more market penetration, better customer service. It doesn’t matter what the answer is as long as it’s the right answer for your business. The true answer. What do you want to celebrate six months from now? What are you really looking to drive between now and next year? Write it down.
Now write down how many likes and followers and shares and clicks you think you will need to accomplish that objective. (Kidding. Don’t bother… unless you already have a pretty sophisticated system in place, you probably won’t be able to accurately connect likes and followers to actual business results.)
What was the point of that little exercise? First: to show you how disconnected social media metrics and business outcomes can be. Second: to get you back on track in regards to the role social media channels should really be playing in your business. Let me ask you something: what would you rather have: 1,000 new Twitter followers or 20 new customers? 1,000 clicks to your website or 20 solid leads?
If the answer is new customers and leads, why are you focusing on likes and followers? Doesn’t it seem that you are using the wrong metrics to measure the effectiveness of your social media efforts? More importantly, why is your activity on social media channels not specifically geared towards driving the business outcome you wrote down a few moments ago?
Now that we’re all on the same page…
Okay, let’s recalibrate. Let’s go back to what you wrote down: your company’s real business objectives. That’s what we are going to focus on, starting right now. Over the next few posts we are going to dive into how to rework your social media and social business programs to make them drive actual results. Results with a measurable impact on your business. Not just likes and digital impressions and clicks, but real numbers that your CFO will be able to highlight in your P&L.
Why don’t we start with the “increase sales” business objective. The general “I want to sell more stuff” focus. Not the sexiest or the most original thing in the world but probably the most common for most companies, whether you’re a small retailer, a mid-market services provider or a global consumer products juggernaut. But before we dive into some strategies and tactics, it is important to understand what “increasing sales” means.
Ask most sales or marketing managers around the world where they think they should start with increasing sales, and what they will tell you is “we need to reach more customers” (translation: “we need to create more customers”). Nothing wrong with that, and there isn’t a single marketing professional out there who will disagree with that answer, but there is a little more to it than that. Customer acquisition is definitely a big part of the equation, but there are two more elements of the customer lifecycle piece that you need to factor into you overall “more sales/more customers” objective: customer development and customer retention.
Customer acquisition is great… except for one little detail.
This is probably as good a time as any to bring up a statistic that far too few sales managers and marketing professionals know about: the cost of customer acquisition is 6x the cost of customer retention (source: Bain & Company) So for every dollar spent on keeping a customer happy, it will cost you 6x more to replace him with a new one when he leaves.
Quickly: what is your customer erosion rate? How many existing customers do you lose on average over the course of a month? A quarter? A fiscal year? (If you don’t know, find out.)
Now let me let you in on a little secret: social media channels may not be the most effective channels to maximize reach. In other words, they may not be the best channels to focus on when it comes to acquiring new customers. Take a step back and look at social channels from a potential customer’s perspective:
Twitter is a fire hose. Unless something snowballs into a trending topic (generally a scandal of some sort or some kind of real-time marketing coup pushed out during a major sporting event), blink and you’ll miss whatever content digital marketers just tossed into the Twitter fray.
Facebook’s organic reach for company pages is now somewhere between 15 and 5% (which means that 85-95% of your audience doesn’t see your Facebook updates even after they have “liked” your page). Only about 1% of “fans” ever visit a brand page once they have liked it anyway. Unless you pay Facebook to boost posts (or advertise), pretty much zero potential customers (people who don’t already like your Facebook page) will ever accidentally/organically see content you post to Facebook.
LinkedIn is nice but it’s become noisy and everyone seems to be there to sell rather than buy. It works better as a deep channel than a broad channel. In other words: it’s effective but you really have to work the relationship angle for it to really work for you.
Instragram and and Pinterest are great if you can fit yourself into a lifestyle brand, but good luck making either one scale for you if you’re a mid-market service provider.Don’t get me wrong: social channels are still powerful customer acquisition channels if you work them properly (and we will get to that in upcoming posts), but getting back to a place where you can realistically use them for that purpose might take a little time and a little work. What is important for you to focus on right now is that social channels can be extraordinarily effective when it comes to customer development and customer retention. (Remember: it costs 6x more to create a new customer than it does to retain one.)
In the next post, we will take a closer look at how to use traditional and social channels in concert to drive customer acquisition, customer development, and customer retention. Your homework before our next installment is to look at your company’s customer erosion rate, look at your customer retention efforts (spend and activity), and think about what you could be doing better in terms of developing existing customers into loyal lifetime customers. (What you do to drive repeat business after you have created a new customer.)