A while back, I wrote an article for my company newsletter that touched on well-known basics for successful marketing. In a search for some blog inspiration, I decided to revisit some of these key fundamentals and see if the last year of my increasing personal reliance on social networks and digital media had altered my perceptions at all, or if leveraging social media made meeting these basic objectives any easier.
I stumbled across this gem of wisdom – talk to your customers more often. It seems like common sense, but many companies forget to follow this simple guideline. Luckily, the advent of social media has made this basic principle a lot harder to forget.
Brands can now have a direct two-way communication with their audience any time, anywhere. With the rise of new technologies (mobile apps specifically come to mind) consumers are no longer tied down to their computers and are communicating, updating and sharing brand experiences on a minute-to-minute basis.
The challenge for brands comes in managing these communications in a way that builds brand loyal relationships and drives return on investment. Most businesses immediately think of developing new business when they define return on investment. However, in my opinion, social media has the highest potential for return on investment when it comes to retaining an organization’s client base.
Depending on your source, statistics state that securing a new customer is five to seven times more costly for a company than retaining an existing one. More interestingly, it’s been found that a 5% increase in client retention can drive profit increases of up to 100% (Harvard Business Review). Don’t get me wrong, new business development has its place in digital media strategies. However, for the majority businesses entering the social media realm, it makes more sense to focus initial activities on building on and increasing the value of existing relationships.
Why? Because managing an integrated digital media strategy is extremely time-consuming. Unless you have a competent, in-house social media team or hire a digital agency as support, it can be difficult to keep up with the constant stream of digital chatter and still run your business successfully. Unlike many traditional forms of new business development, consumers using social media expect a greater level of interaction before they will accept being directly marketed or sold to.
While this may not be true in all situations, (let’s be honest – I don’t really need my local coffee shop to tell me a funny anecdote to convince me to buy a latte) it is becoming increasingly expected in digital conversations.
For small companies, or those taking their first steps into social media, speaking to existing consumers has the maximum potential for return on investment. When you have an existing, brand loyal relationship you can bypass the first stages of conversation, where self-promoting is a major faux pass. In this segment, the focus can shift to encouraging trials of other products and services and maintaining customer satisfaction. Most importantly, these relationships hold the potential to tap into powerful referral networks by leveraging influential consumer-to-consumer relationships.