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Business Journal
Creating Social Marketing That's Actually Social
Business Journal

Creating Social Marketing That's Actually Social

Despite dramatic marketing efforts to use social media, most businesses are experiencing little, if any, positive benefits from it

by Ryan Darby and Jake Herway

Is marketing through social media an epic fail? Not necessarily -- but it's facing surprising problems.

Being social means that you create a two-way conversation with consumers.

Despite dramatic efforts to market using social media, most businesses are experiencing little, if any, positive benefits from it. According to a Financial Times survey, 91% of businesses report that social media has no real impact on their sales. And Gallup's 2012 Mobile Retailing Study found that 62% of customers feel that social media has no influence on their purchasing behavior. The reality that social media has little influence on buying behavior is especially troubling given the amount of money businesses are pouring into it.

This may come as a shock to marketers; opportunities for companies to reach consumers through social media are staggering. Seven in 10 Americans used a social media site within the last year, and two-thirds of them used a social networking site at least once a day, Gallup's 2012 Mobile Retailing Study found. Facebook alone has more than 700 million daily users. Social media allows unprecedented access to consumers, and companies are investing more and more money into marketing through it.

What are businesses doing wrong?

The primary reason current social media strategies don't work is that businesses approach social media just like they approach traditional media like TV, radio, and print -- they advertise. They want to get their message to consumers, so they broadcast it to all available eyes and ears.

But broadcasting indiscriminately on social media doesn't work because it's a new and unique form of media. Unlike traditional media consumers, social media users have much more control over the conversation. They can contribute, ignore, share, echo, or even deride a broadcasted message. And just as its name suggests, social media is inherently social. People expect to take part in the conversation. They want a dialogue, and when all they get is an advertisement, they come away dissatisfied and disappointed.

Another reason marketing on social media can fail is by violating consumer expectations. The same Gallup study found that 94% of social media users use social networking sites to connect with friends and family, while less than half of that (40%) report a desire to find out information about a company or organization.

That's because people think of virtual socializing the same way they think of an in-person social gathering in their living room. No corporation would barge uninvited into a customer's home touting its benefits or discounts while the customer is chatting with close friends and family. So corporations should be considerate and tactful about inviting themselves into social media sites.

Social media done right: three strategies

When it comes to reaching consumers, using social media as a broadcast medium clearly doesn't work. But our analysis suggests that businesses can do three things to improve the efficacy of their social media strategy: set the right expectations, be social, and use the power of customer engagement.

Set the right expectations. First, clarify the purpose of your interaction for the social media user. If your purpose is to advertise, say so. There's nothing wrong with advertising -- and being upfront about it can be very effective. For example, many people willingly sign up for email advertisements or coupons, and companies reap sales from them because consumers expect and want that communication. Businesses go wrong in their social media interactions when consumers expect a dialogue and instead get an ad.

To avoid this confusion, use your social network profile or summary to detail exactly how you intend to interact with customers. If you want to post special deals or offers, say so. If you intend to answer customer questions, say so. Some businesses may even want to create multiple accounts on each social media platform to separate these functions. Whatever strategy you choose, be explicit and create the right expectations.

Be social. While setting expectations, remember that social media users expect nothing more or less than a social experience. Being social means that you create a two-way conversation with consumers (but not if they are expecting coupons from you).

How Engaged Are Your Customers?Some companies experienced tremendous growth when they embraced the social aspect of social media. Cigna, for example, used social media to create a dialogue with their customers about their claims forms and customer service. They ended up rewriting the claims forms in plain English and became the first major health insurer to offer live phone support 24 hours a day. They saw customer ratings soar by 80% and revenues by 15% annually after implementing a smart approach to going social. They used social media to create real relationships with their customers -- and reaped bottom-line dividends as a result.

Use the power of customer engagement. Engaged customers -- those who are rationally satisfied and emotionally engaged with a company -- are a business' social media currency. When customers are fully engaged, 74% of their conversation about your company is positive. In contrast, when customers are actively disengaged, almost none of their conversation is positive, and 14% of it is negative.

These customers can have a powerful and compounding effect on a social network. About nine in 10 people (88%) report that friends have an influence on their purchasing decisions, far outdistancing traditional influencers like TV, mail catalogs, and magazines.

To harness the power of friendships and generate positive word of mouth, you must create a base of engaged customers. Once you have that base, aim your social initiatives at them, and encourage them to maximize their networks on your behalf. But remember, before you make that request, you must have engaged them. Only then will they be a positive influence for your business.

But that's the beauty of social media. It's social, which is human -- and it's the essence of engagement. Customers become engaged when they feel a product or service fits them perfectly and that the company that provides it cares about them. Social media offers a method to do that in a way no other marketing tactic can. Social media can reach customers individually, pinpointing those most likely to be engaged by your product, service, or brand, while opening dialogues that show your company cares.

A banner ad can't do that. But a social media strategy that sets the right expectations and capitalizes on engaged customers can. And it can do that with hundreds of millions of consumers every single day.

Survey Methods

Results are based on a Gallup Panel study and are based on mail and Web surveys completed by 18,525 national adults, aged 18 and older, conducted in December 2012. The Gallup Panel is a probability-based longitudinal panel of U.S. adults that are selected using random-digit-dial (RDD) phone interviews that cover both landline and cell phone and address-based sampling methods. The Gallup Panel is not an opt-in panel. The sample for this study was weighted to be demographically representative of the U.S. adult population, using 2012 Current Population Survey figures. For results based on this sample, one can say that the maximum margin of sampling error is ±1.0 percentage points, at the 95% confidence level. Margins of sampling errors vary for individual subsamples. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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