On the surface, Facebook seems like a marketer’s dream. It has on the order of one billion users around the world. It’s particularly popular with younger users (read, enthusiastic buyers with disposable income). Best of all, they share an ocean of individual information about the places they travel, movies they like, clothes they’re buying, gadgets that interest them, and more. And yet the firm is having substantial problems monetizing its business. This points to a fundamental disconnect between established companies and the customers they’re trying to reach.
Executives from powerhouse advertisers like Walmart, Unilever, Coca-Cola, and others are pushing Facebook for access to more user data. Problem is, users don’t want them to have that data and are highly sensitive when it’s used to market to them. Facebook risks a consumer—and perhaps a legal—backlash if it provides the data, anyway. The result is poor ROI results for advertisers who “make do” with what little information they can glean.
The message is clear: Despite their propensity for splashing the details of their lives all over the Internet, people balk at having that information used to sell them what they may not want. It’s true that TV watchers tolerated (for a time) interruption advertising based on broad demographic data—but mining personal information from social media sites to target ads to consumers is high risk, low reward.
The problem is that marketing departments are trying to apply traditional marketing approaches to an entirely new environment—and it’s not working.
Why fight nature? Why not instead work with what users of social media are looking for rather than try to shoehorn old marketing methods into an entirely different kind of environment?
I offer the following suggestions:
Build your own customer communities. Salesforce.com’s Marc Benioff recognized early on that Facebook is how people, including his customers and prospects, want to communicate online. So his team developed a “Facebook-like” platform called Chatter. Among other uses, it serves as a superb customer community-building tool. For example, it’s used by attendees and employees prior to and during the firm’s annual user conference, Dreamforce, to reach out, establish connections, and form personal interest groups prior to the conference.
That has substantially raised participation in Dreamforce. Since 2009 when they started using the Chatter platform, attendance at Dreamforce has grown about 50 percent per year—except this year, when it nearly doubled from the previous year. And this has been during what we’re now calling the Great Recession, when conference attendance in general has significantly declined. Salesforce gives a great deal of the credit to its Chatter platform.
Restore community marketing. Used properly, social media is accelerating a trend in which buyers can approximate the experience of buying in their local, physical communities. When you contemplate a major purchase, such as a new roof, a flat screen TV, or a good surgeon, you don’t go looking for a salesperson to talk to, or read through a bunch of corporate website content. Instead, you ask neighbors or friends—your peer network—what or whom they’re using. Companies should position their social media efforts to replicate as much as possible this community-oriented buying experience.
In turn, social media firms, such as Facebook, should become expert at enabling this experience. They can do this by expanding the buyer’s network of peers who can provide trustworthy information and advice based on their own experience with the product or service.
A new firm, Zuberance, makes it easy and enjoyable for a company’s loyal customers to advocate for it on their social media platform of choice. At the moment one of these customers identifies herself as a “promoter” on a survey, she immediately sees a form inviting her to write a review or recommendation on any of several social media sites. Once she does, the Zuberance platform populates it to the designated sites, and the promoter’s network instantly knows about her experience with the firm.
Find and leverage your customer influencers. Many firms spend lots of resources pursuing outside influencers who’ve gained a following on the Web and through social media. A better approach is to find and cultivate customer influencers and give them something great to talk about online. This requires a new concept of customer value that goes way beyond customer lifetime value (CLV), which is based only on purchases.
There are many other measures of a customer’s potential value, beyond the money they pay you. For example, how large and strategic to your firm is the customer’s network? How respected is she?
One of Microsoft’s “MVP” (Most Valuable Professional) customers is known as Mr. Excel to his followers. On some days, his website gets more visits than Microsoft’s Excel page—representing an audience of obvious importance to Microsoft, which supports Mr. Excel’s efforts with “insider knowledge” and previews of new releases. In return, Mr. Excel and other MVPs like him are helping Microsoft penetrate new markets affordably.
Help them build social capital. Practitioners of this new, community-oriented marketing are also rethinking how they repay such MVP (or “Customer Champion” or “Rock Star”) customer advocates and influencers. Traditional marketing often tries to encourage customer advocacy with cash rewards, discounts, or other untoward inducements. But a better way is to help advocates and influencers create social capital: help them build their affiliation networks, increase their reputations, and give them access to new knowledge—all of which your customer influencers crave.
National Instruments used an especially creative approach with its customer influencers, who were mid-level IT managers at the companies they did business with. NI engaged them by providing powerful research and financial proof points they could take to senior management, showing that NI solutions were creating strategic benefits. That got NI into the C-suite. It also increased the reputation of the mid-level advocates, who were seen as strategic thinkers bringing new ideas to senior management.
Use advocacy to improve demand generation. With the rise of the Internet, demand generation has gone from a marketing backwater to a multi-billion-dollar industry in itself. One of the challenges facing the demand gen industry now is developing a steady stream of interesting content that will attract buyers and move them through the sales funnel. Increasingly, companies like Intel, Hitachi Data Systems, Procter & Gamble, and others are bringing customer content into their demand generation efforts—in the form of customer communities, customer videos, customer success stories and case studies, and the like.
Another challenge is to tease out where the buyer is in her “buyer’s decision journey,” as well as what her specific need is. Software at firms like Eloqua is helping to guide buyers to the content they want to read or watch, or even the person they may want to talk to—in both cases, that will often be a current customer.
Social media marketing is actually much more appealing than traditional marketing. Rather than trying to persuade people to buy what you want them to buy, you’re giving them information to help them make informed decisions on what they need and want. For many marketers it’s a whole different way of thinking—but once you make the switch, you’ll find it far more rewarding.
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About the Author:
Bill Lee is author of The Hidden Wealth of Customers (Harvard Business Review Press, 2012). He is also CEO of Customer Reference Forum, and has spent the last eight years building vibrant communities of customer advocacy professionals. His conferences have attracted leading global ﬁrms, such as Microsoft, Apple, Wells Fargo, McKesson, Salesforce.com and others.
Bill is also the author of Mavericks in the Workplace and has written for a number of publications, including the Wall Street Journal
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