IABC St. Louis’ June luncheon drew professionals from a wide variety of industries and experience levels. One thing everyone had in common was the desire to understand whether Social Media really can make a difference. We’ve been inundated with articles lately proclaiming that social is broken. With titles like “There is no ROI” and “One in five companies say they’re losing money in social,” it’s no wonder people are starting to question its true merit.
But as our guest speaker, Brian Cross, explained, it’s understandable. Brian is managing partner and co-founder of Elasticity, a digital communications firm here in St. Louis. He’s also Executive Director and co-founder of Rally St. Louis. It goes without saying that we were all tuned in for what he had to say about social media.
The truth is there are issues with social: The Community Manager role has changed, there have been reach and engagement issues, ROI is hard to define, and it’s difficult to tie social directly to sales, among other things. Brian had a great deal of info to share with us in just an hour’s time, so here are the top 5 take aways from our June luncheon:
1. The sales funnel is no longer linear, because the purchase process is no longer a linear one! Rather than an upside down triangle (awareness – familiarity – consideration – purchase – loyalty), social media has changed the look of the funnel. The new sales funnel is filled with twists and turns. The two most important pieces being purchase consideration (word of mouth, peer comments/recommendations and online social behavior) and post-purchase experience (complaint or delight, giving feedback and advocating for a brand or product to those in the consideration phase).
2. The “True” value of a social media community is underestimated.
If you were to measure these things:
- Number of customers
- Number of customers that can be converted
- Number that can be moved to higher tiers (additional products, more expensive products, higher tiers of service)
- Length of relationship
- Typical sale total
You would learn the true LTV, or Lifetime Value.
3. It’s time to challenge the old adage “It’s cheaper to keep current customers than get new ones.” Given a finite budget, most people would split the pie approximately like this:
- Acquisition 20%
- Retention 50%
- Development 30%
But… research shows that Retention numbers are set – there is very little room to move the needle. And while Development does move the needle, it’s only at small increments. Development efforts are actually more expensive. So Acquisition is the best chance to move the needle. It doesn’t matter what costs more! Would you ask for the cheapest lawyer? The cheapest employees? No. You want the best… The Best VALUE. And that’s Acquisition.
4. Those who think Social doesn’t work are measuring the wrong stuff. That’s right. Go ahead, read it again… They’re measuring the wrong stuff. What we need to measure is:
- CLV (Customer Lifetime Value) of social customers
- NPS (Net Promoter Score) of social customers. Your NPS = % promoters – % of detractors. The average social media follower has a HIGHER NPS than your average customer. So stop trying to convert the non-believers (ugly ducklings). Just buy more swans!
- Development opportunities of existing audience
- Share of SERP (search engine results page) for unbranded buying search strings
5. Utilize the toolsets available:
*And Remember… we’re ultimately measuring the VALUE of the community!
A big Thank You to Brian Cross at Elasticity for these top five – and an entire hour filled with relevant, insightful information. You can follow Brian on Twitter @vanceopel and @goelastic.