Social Media Marketing Can Succeed for Leaders -- and Laggards
According to the Aberdeen Group, 59 percent of companies have changed their investments in social media marketing due to recessionary conditions -- but not all companies are succeeding with these modifications. The attention paid to this category may reflect a rise in consumer demand for company engagement on the social Web, and social media marketing has a reputation for being inexpensive, but companies have had a difficult time measuring the accuracy of that belief using traditional metrics such as return on investment. In a recent report, "The ROI on Social Media Marketing," author Jeff Zabin, an Aberdeen analyst, establishes that word-of-mouth or social marketing -- although not always easy to tie to financial outcomes -- do, in fact, generate a return on marketing investment, as well as improved rates for customer acquisition.
Aberdeen classifies the top 20 percent of companies as Best-in-Class, the midrange 50 percent as Average, and the lowest 30 percent as Laggards residing at the bottom of the maturity model. Zabin's research -- examining the experiences of more than 275 enterprises to deliver key findings about social media marketing -- indicates that the top social media marketers greatly outperform those barely or rarely using social media. Those Best-in-Class companies (BICs) are 87 times more likely to see higher returns on marketing performance than Laggards are. Overall, however, the research reveals that:
- 68 percent of companies have a process for monitoring social media;
- 58 percent have devoted resources to social media marketing;
- 79 percent have email marketing sofware; and
- 61 percent engage customers in online communities.
"This whole world is fairly nascent and evolving rapidly," Zabin says, pointing to particular growth in the market for social media monitoring, and an apparent convergence with feedback management tools to capture the full cycle of what's come to be known as the Voice of the Customer.
Zabin says he isn't overly surprised with the proliferation: "Every company is pretty much under pressure to reassess their planned marketing spend and reallocate their budgets," he says. "As they migrate from high-cost channels and programs and traditional media -- and they reallocate some of the spending to programs that will be more cost-effective in terms of achieving desired perspectives -- social media marketing is a big beneficiary." Social media can be an affordable way to drive increased visibility and to drive customer engagement, he says -- but it doesn't happen in a vaccuum.
"In terms of social media marketing, the technology is the easy part," Zabin says. Companies need email marketing software and tools to monitor social media, he says, but beyond that the bar is relatively low. "More importantly, what you need is to manage the process," he says. Bearing in mind that companies are at different stages in their approaches to social media, Zabin breaks down his recommendations for success for laggards, average companies, and BICs:
Laggards' Steps to Success:
- Define best practices. Glean insights from social media and look at what competitors in the field are doing.
- Train employees to engage in conversations. To effectively utilize social media enterprisewide, organizations must involve multiple stakeholders. This often involves a learning curve.
- Establish a process for social media marketing campaigns. Make clear distinctions about how social media is unlike traditional media, in both approach and outcome.
Industry-Average Companies' Steps to Success:
- Use monitoring to identify and measure key influencers. "Influence is less about the number of links and friends," Zabin says, "and more about the quality of the interactions and the duration of the relationships, which is measured not only by Web traffic but by customer advocacy."
- Segment customers engaged in online conversations about the company brand. Companies must take into account profile data about the customers to truly glean information from conversations. Technology designed to montior social media can aid in this.
Best-in-Class Companies' Steps to Success:
- Integrate social media marketing with other marketing tactics. Zabin acknolwedges that few companies are actually doing true multichannel integration, but the goal should be kept front-of-mind.
- Align customer advocacy with financial outcomes. Zabin says there's more than one way to measure customer advocacy, yet fewer than half of BICs have established performance metrics for social media marketing initiatives. He writes: "But companies will figure it out eventually, because when it comes to measuring customer advocacy, nothing speaks louder than money."
To some extent, engaging in social media is a leap of faith, Zabin admits. He says it's critical for companies to get the right level of support and commitment and to have the chief marketing officer on board. He also warns that the results probably won't be immediate, but the risks of not getting involved outweigh any costs.
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