'Tis the Season to Know Your Customers

Posted by Kate Jurras on Wed, Jan 5, 2011

Guest post by Dean Whitney. Dean runs a social media ad agency, is a sought after speaker, blogger and has worked with many of the world’s most recognized brands and collaborated with top agencies. Follow him on Twitter, and check out his blog! This is one of several guest posts in the MITX 2011 Perspectives Blog Series. Stay tuned for more posts by Boston's most influential thought leaders.

For brands that are going to be successful, 2011 will be more focused on building awareness. The job of marketers has always been to reach customers at the point where they are most influenced to purchase products. That’s why P&G in the early years decided to produce TV shows to target housewives - hence the term "soap opera." Social media has changed fundamentally how consumers purchase products and services.

awareness resized 600
 
Source: McKinsey Quarterly report - The consumer decision journey

We are observing much longer purchase patterns where customers are aware of the brands much longer prior to engagement. User generated content, word of mouth, and brand perception play a much more significant role in the conversion process. Awareness is the foundation of customer acquisition.

So, how will brands build awareness and get to know their customers, promote engagement and increase awareness? It starts with a solid understanding of the target audience, and that segment of your audience that is most influential. Marketers need to develop a framework for outreach, promotion and interaction that will foster engagement.

  • There are more than 200 million blogs
  • 34% of bloggers post opinions about products and services
  • 78% of consumers trust peer recommendation
  • There are 600 million Facebook users and 165 million Twitter users
  • There are 3,000,000 Tweets every day

Social Networks

An April 2010 study, Social Media Marketing Industry Report by Michael Stelzner of 1900 marketing professionals, showed that by far Twitter, Facebook, LinkedIn, and blogs were the top four social media tools used by marketers.

twitter resized 600

Social media marketing has become a significant part of marketing efforts for major brands. Here are some examples of successful campaigns:

Dell - Dell Computer has a strong blogging presence with its Direct2Dell forum. Not only is this a chance for bloggers to learn about new products, but it has also helped improve the organization's reputation. The amount of negative blogs dropped from 49% to 22% since the start of the site. Dell was able to connect with its customers and immediately address their concerns, comments, and questions through the blog. Dell’s online VP Manish Mehta said the company's Twitter handle has over 1.5 million followers, and has resulted in over $6.5 million in sales.

Target - Target has been successful on Facebook by "getting real" with customers and exposing products which resonate with the customers. Target took time to understand the medium and learn how to use it to connect with the customer. They embraced the learning curve and did especially well by allowing customers to help shape the group.

Starbucks - Starbucks can be found on Facebook, YouTube, Flickr, Twitter, and on their own blogging site My Starbucks Idea. Starbucks is considered to have one of the best social media strategies. The focus is geared toward the needs, wants, and interests of existing companies, and building that relationship to help gain new customers.

Customer Communities
Listening to customers is the best way to get to know them. A trend in social media is community support forums and idea management tools that allow customers to discuss ideas and issues in an open forum. This ultimately results in a better customer experiences, far lower support costs and more buying activity in the long run.

Dell IdeaStorm - Launched in 2007 the Dell IdeaStorm is a website where Dell customers can share their ideas - from product marketing to hardware design. Since it launched, customers have submitted over 10,000 ideas and more than 400 have been implemented.

My Starbucks Idea - Starbucks believe that their customers know better than anyone what they want from Starbucks. MyStarbucksIdea.com provides customers a forum to share, vote, and discuss product ideas. About 40 Starbucks Idea Partners from various departments answer questions and provide insights to the discussions. From big ideas, like healthier morning and food options and bold coffee discussions, to smaller initiatives such as a "reusable cold cup." In just a few short months My Starbucks Idea has become a major force in helping direct the future of the company.

Get Satisfaction - Get Satisfaction is a simple way to build online communities that enable productive conversations between companies and their customers. More than 40,000 companies use Get Satisfaction to provide a more social support experience, build better products, increase SEO, and improve customer loyalty.

Paid Advertising

So, in the new world of consumer generated content and conversation marketing, what about paid advertising?

Display Ads - CPM, clicks, and impressions show that online display ads aren’t very effective. Consumers seldom click on ads. Ad networks have developed sophisticated technologies and networks to help then target consumers with the right ads at the right time. But with such poor performance why are marketers still pumping money into display ads? Online ad impact tools show lift of visitation to an advertiser’s site, post-exposure to the ad, but without a click. The ads contribute to the brand perception and awareness driving traffic indirectly.

comscore resized 600
 
Source: ComScore

Paid Search - Natural search is the holy grail for marketers. The ultimate way to drive traffic is for links to brand related content to come up first in search engines. It all starts with keyword research and understanding how your target audience searches. With keyword research tools like Google Adsense you can understand how competitive the natural search placement for those terms are so you can supplement searches where you are weak with paid search ads on popular search engines.

Facebook Ads - There are 600 million Facebook users. Facebook allows brands to create highly targeted ads. With Facebook Pages or Facebook Events you can turn your ad message into a trusted referral by including content from a user's friends who are already affiliated with your products.

Did you just discover this series? Don't worry! You can check out our last post, by Nitzan Shaer, here!