Some companies are leading when it comes to Social Media.
According to Aberdeen Group’s recent (and very compelling) report – The ROI on Social Media Marketing – Why it pays to drive word of mouth – companies are allocating funding to Social Media Marketing. In some cases they are moving budgets completely from previously planned marketing expenditures, even revising budgets to increase their spend on Social Media Marketing. Though a lot of this has been driven by the recession, it shows companies seeing the opportunity of Social media marketing. Aberdeen Group’s research says the number of companies doing this is as high as 59%. What about justification for Social Media Marketing spending, that elusive goal?
Social media marketing – financial outcomes still hard to justify
It’s still elusive. AG’s research revealed that even though companies are investing in social media marketing it’s still hard to justify in terms of financial outcomes. This is partly because there isn’t a set of defined, across the board performance metrics. And even where these exist it’s challenging to apply them to track and measure marketing performance in terms of financial outcomes. I believe that will change, because, as sessions at last month’s Pod Camp revealed, analytics and metrics are going to be the next big focus. Watch that space. Better still – gear up for it fast because it’s going to be in demand.
Social marketing – driven by business drivers and strategic actions
Social Media marketing isn’t about the tools and technologies. Tools are far down the line… though tools tend to be the bright and shiny objects touted as the “social media plan.” As soon as anyone starts talking “social media tools” I start with my questions:
- “What do you want to achieve?
- Why?
- What are your objectives?
- Who is your audience?
- What’s your strategy?
- Who do you need to engage…
- How will you know if you’re successful?”
- How much support does this have within your company?”
And so on. Focus: goals, objectives, business drivers. Only after these questions have been answered sufficiently, can you decide on which technologies could be right for you. Tools are not the plan, they are enablers of the plan.
So, I found it particularly heartening to read that, when it comes to social media marketing, BIC companies clearly understood:
“achieving the desired objectives means more than just deploying the right set of enabling technologies. Success also requires a combination of strategic actions and organizational capabilities…”
The opportunities for social media practitioners who get the strategic fundamentals are huge because Best in Class companies are the companies who are not only open to new ideas, but are willing, at least to some extent, to use social media marketing to address their most pressing business pressures – and measure the outcomes against the business objectives. And one of the biggest business pressures is raising awareness – for which driving Word of Mouth is proving successful.
Not all companies are this progressive though. AG classifies companies into these three groups:
- Best In Class
- Industry Average
- Laggards
Laggards are distinctly trailing the first two in terms of disparities.
For example, BIC companies were top performers in improving the the likelihood of customers recommending their brand or products (95%).
87% improved their Return on Marketing Investment, while 95% improved their customer acquisition rate.
Laggards were the complete reverse. Only 2% improved the likelihood of customers recommending their products and services. 0% improved their ROMI. And only 6% improved their customer retention rate.
This disparity is startling… and it looks like the gap is widening.
I find this fascinating research. It’s an excellent read on this topical subject so if you can get the research I recommend doing so. Businesses will find it very helpful.
Next up – Word of Mouth and how it’s used.
