Perhaps the greatest misconception in the world of marketing is that the role of the marketer is to drive awareness to the brand. In reality, marketers are first and foremost responsible for creating customers; awareness is merely one portion of the buyer’s journey.
With the proliferation of digital marketing, social media and the hyper-aware consumer, the journey has changed a little bit and the role of marketing has evolved with it. Having said that, the growth of new channels hasn’t changed the fact that marketers are supposed to be creating customers, but what it has done is make many of our marketing efforts more measurable.
Recently however, some marketing thought leaders have shared ideas that counter the norm. Making suggestions such as “social media isn’t about driving revenue, but something else instead.” While I can see some of the reasons why this may be a topic of interest, for me it doesn’t cut the mustard. Marketing efforts must align with customer development goals at all phases of the buyer’s journey.
Today I wanted to further explore this topic with someone that is an expert on the subject, so I have called upon not only a thought leader in the marketing space, but someone that makes marketing measurable for a living. Olivier Blanchard is the author of Social Media ROI, a book that explores not just what Social Media is and how it should be done, but how it can be deployed and measured.
Newman: Companies using social media for the last few years have experienced mixed results. Some things seem to work but a lot of executives are still scratching their heads. Where’s the ROI? Why hasn’t social yielded better results?
Blanchard: First, it’s important to remember that social channels, like all other media channels, are just pipes. They are only as effective as you make them. If you use them wrong, they won’t be very effective for you. If you use them right, they can be.
I think that a lot of people were sold on the notion that it was going to be easy, you know? That all companies had to do was create social content and publish it to Facebook and Twitter and blogs. The whole “content is king” theory of the social web. That all you had to do was put out content that cost a fraction of the cost of traditional marketing creative, and that it would be as effective as advertising or email marketing. Unfortunately, that’s just not how it works. It wasn’t how it worked five years ago, and it certainly isn’t how it works now. And the truth is that content isn’t king. It has a place in a social publishing and SEO ecosystem, but it isn’t what makes social work. If it were, we would have seen some evidence of that by now.
As for the ROI, that’s been misunderstood too. ROI isn’t likes and followers. It isn’t impressions. ROI is a business metric. You invest in an activity or a program, and there’s an expectation of real return: money in, money out. That only happens if the what you invest in drives business results, and specifically a business result that is compatible with ROI. If all you’re doing is focusing on awareness and reach, and all you really care about are superficial media metrics, you aren’t really driving ROI. So right from the start, you aren’t focusing on delivering the right outcome.
Newman: So does that mean that likes, followers and impressions aren’t real business metrics?
Blanchard: No, they’re real. They have a role to play. But look, imagine you’re CEO of a company. You didn’t wake up this morning hoping to hit 100,000 new followers. When you report to your board of directors next month, you aren’t going to wow them with how many impressions you scored on Facebook. Don’t get me wrong, these are good things to report, but they aren’t what your business is about. So if your social business program drives likes and followers and impressions instead of real business objectives (like sales, customer retention, product innovation, etc.), then you’re probably focusing on the wrong things in social. I see that a lot: companies getting sucked into the trap of creating content solely to drive engagement metrics. It doesn’t drive anything. It’s a waste of resources. You’re supposed to be driving business, not likes. Companies need to reboot, unlearn the nonsense that social media “gurus” have been evangelizing since 2008, and get back to driving real results through social channels.
Newman: So what should businesses focus on then? What business objectives should they try and drive in social media?
Blanchard: That’s totally up to the business. Okay, imagine we aren’t talking about social business. Imagine that we are just talking about your business. What needles do you need to move in the next 3 to 12 months? Do you have targets yet? 14% YOY growth? +5% YOY customer acquisition? Increase customer retention? Recover from a PR nightmare? Every business is different. Every business has unique goals and objectives and immediate circumstances. The way it works is you look at what you want to accomplish between now and whatever your target date is, and you look at how social channels can help you accomplish that. Don’t just blindly chase likes and followers because that’s the thing to do. Focus on driving what matters.
Newman: Can you give us some examples of what you mean?
Blanchard: Sure. First, let’s assume that your business is looking for growth. That means sales, right? More sales. But what does that really mean? What does that actually look like? The mistake most businesses make in social is this: they think that the more likes or followers or fans they get, the more of them they can convert into customers. It’s mostly a customer acquisition play. So they create content and hope that it gets shared, and that every time it is shared, new people see it, start following their account, and eventually become customers. So at its core, it’s really about discovery. Word-of-mouth, if you will. And there’s value to that (on some channels more than others), but that’s sort of the digital marketing equivalent of a game of pinning the tail on the donkey. Unless you’re already an established consumer brand or a famous celebrity, that’s not going to scale super well. Most of the time, you’re just going to be publishing content no one sees. You won’t be acquiring very many customers that way. You’re better off advertising if you want to drive discovery at scale.
If you take a step back though, and look at your business, you’ll probably notice that it is driven by customer behaviors, and that customers have lifecycles. Your relationship with them has phases: a beginning, a middle and an end. How you market your products and services to them, how you interact with them, changes depending on where they are in that journey. So let’s split this up into three types of business drivers: Customer acquisition, customer development, and customer retention.
Customer acquisition is what most companies already spend most of their time doing when it comes to social spend and marketing spend. It’s fishing for new customers. It’s what happens between discovery and first purchase. You’re creating customers out of non customers.
Customer development is what you do AFTER that first transaction. It’s the phase during which you teach your newbie customer how to be a professional customer. What does that look like? If you’re a cable company, it’s the phase in which you drive your basic package customer to become a premium package customer. If you’re a cycling shop, it’s the phase in which you help a customer who bought a beginner bike to start losing weight get to a point where he needs to upgrade to a better, more high performance bike. Though engagement, education, being helpful, increasing your value and mindshare, you help your customers dive deeper into your products and services. You teach them to do more business with you and get more out of what you have to offer.
Customer retention is basically the process by which you turn a satisfied customer into a loyal customer. That’s the objective: keeping that customer forever. Making sure that he or she will never want to leave. We don’t have enough time to get into Lifetime Customer Value this time around, but look into it. Too many businesses look at their sales volume in terms of time periods. Very few look at it in terms of customer lifetime value. If they did, customer service and building relationships with customers wouldn’t just be an afterthought. It wouldn’t be a cost center on the P&L. It would be a business development priority.