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Social Marketing Grows Up

By Denis Pombriant
Feb 23, 2017 3:56 PM PT
social-marketing

For an article that lands on the social marketer like a proverbial ton of bricks, check out "What's the Value of a Like?" in the March-April issue of the Harvard Business Review.

"Social media doesn't work the way many marketers think it does. The mere act of endorsing a brand does not affect a customer's behavior or lead to increased purchasing, nor does it spur purchasing by friends," concluded authors Leslie K. John, Daniel Mochon, Oliver Emrich, and Janet Schwartz in their report on four years of experiments, 23 in all, that engaged 18,000 people.

If that's all you read, you might believe that everything we've thought and acted upon involving social media marketing was wrong. However, it's not -- though the research clearly signals that we have to adjust our thinking.

What's in a Like?

Before there was experimental data to support various contentions, it made perfect sense to believe that the likes and endorsements posted to friends on social media would drive more business.

After all, didn't we all subscribe to the idea that a disgruntled customer would tell many more people about a brand's shortcomings than a happy customer would sing its praises? Didn't we all accept that a social megaphone could be a brand disaster if not handled properly?

Yes, and yes, we did all that. It's not wrong, at least not totally, but there are two ways to see this as the authors point out.

It's possible that getting people to follow a brand on social media makes them buy more. However, it's also possible that those who already have positive feelings toward a brand are more likely to follow it in the first place, and that's why they spend more than non-followers.

Teasing this apart is important, because millions of dollars in marketing budgets hang in the balance. Also, according to the same article, a survey of CMOs showed that 87 percent couldn't document how social created new customers. When a number like this gets this large, what often follows is disenchantment, which vendors understandably want to avoid.

Social likes and endorsements might be good to have, but successful brands still understand that their marketing job isn't done simply because a friend liked something, the research shows.

Such a friend still needs convincing, so social's value here is more like teeing up the opportunity for more conventional marketing. Interestingly, the authors conclude that the social set up is a good precursor for good old advertising.

First Hype, Then Data

In this vignette, we can observe the latter stages of social marketing's hype cycle. The technology arrived with great fanfare, a stampede of people bought it, and it promptly failed to perform up to inflated expectations -- that's a pure hype cycle.

The good news is that toward the end of a hype cycle, things settle down as real-world data helps us understand the best uses for new technologies. That's what this report tells me. It sets social down in a continuum of marketing tools, and it approaches and demonstrates how it can best work in that milieu.

As a practical matter, the focus now is most directly on customer loyalty. It's nice to get incremental new business with an assist from social marketing, but the effect is most dramatically about loyalty, for the simple reason that the hidden message of the study is the need for active engagement. Active outreach by a brand to get and keep customers involved long after the original purchase is what drives the likes.

A like from a one-time buyer says something about a product, but likes coming in from customers over time indicates engagement and loyalty. Even customers who aren't actively buying more can retain a positive impression of a brand and that drives recommendations.

The research seems a little light on engagement and loyalty, and I hope the authors revisit this topic and write more. For many, the relationship between engagement and loyalty is still a mystery. The article doesn't separate ideas about initial and subsequent sales, which would help, but it should.

Most markets today have gone way past their exponential growth phases, and social media marketing easily can be the difference between zero-sum markets and retaining some of the vibrancy that comes with product exploration and adoption. This is worth internalizing.


Denis Pombriant is a well-known CRM industry researcher, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. He can be reached at denis.pombriant@beagleresearch.com.


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What's most likely to cost a company your customer loyalty?
a major product fail
major unethical corporate behavior
public advocacy of social or political views I oppose
a really bad customer service experience
stagnation -- I'm attracted to innovation
none of the above -- I'll stick through thick and thin