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Multichannel Merchant
Multichannel Merchant
Multichannel Merchant
O+F Operations and Fulfillment

Every now and then I hear about the successful marketing use of social media. And almost daily I hear about the unsuccessful marketing use of social media.

What do I mean by “successful”? A medium is successful if the cost-per-transaction is at least competitive with other media. So if Facebook or Twitter or Google+ brings me results at least comparable to email or direct mail, it’s successful. Heck, I’ll even extend that to qualified inquiries.

So here’s where I separate myself from those whose passion overrides cold-blooded comparison. Two questions about any medium:

1. Is the transactional net-total from a random group of “members” greater or less than the cost of acquiring and fulfilling the transactions?

2. What percentage of buyers become multibuyers? (Any of us will invest in a buyer whose potential for reorders is respectable. Only one-shot marketers depend on a single transaction for survival.)

An imperative that often is dismissed when any marketing factor is being advocated: Test it against other media, being sure on both sides to include all the costs as well as anticipated lifetime value.

For example, visualize this scenario: A soft drink has a split-run promotion in a Sunday newspaper free-standing insert. One side of the split says, “Tell us you ‘Like’ this drink and take $1 off a six-pack.” The other side of the split is a simple coupon, “$1 off a six-pack.”

Will the addition of a declared preference increase response beyond the added cost of whatever cements the offer, which may be mailing or emailing a coupon—or just adding the “Like” to a pile? And will the “Like” bring continuing sales of the soft drink when no further incentive is offered?

That’s why we test. Uh—or why we should test.

It ain’t necessarily so.
Let’s take a dispassionate look at Facebook as a marketing medium. Some early experimenters are asking, “Are we there yet?” Some marketers who jumped into the Facebook stream are reporting that too many transactions are two-step rather than go-for-the-jugular—and without a major “freebie” or a contest, that additional element transmutes an apparent dollar-for-dollar winner into a dollar-for-dollar loser. Some marketers, such as General Motors, have concluded that when they add the handling costs of a “Like”-originated response, a Facebook offer isn’t competitive. Other marketers say the medium brings encouraging or superior results.

You have to test to find out which result applies.

This, word for word, is an email to me (misspelling my name and misinterpreting my business function, as so many lists do):

Hi Hershell,

This is a reminder that you only have 2 weeks left to take advantage of special pricing on a “Facebook Likes” campaign for your nonprofit organization.

Somewhat condensed, here’s the follow-up text:

Your organization decides how many new “Likes” you want—up to 100,000!

Care2’s experts do all the work creating and promoting your campaign. We target our own fans and reach out to their friends and other cause-minded folks on Facebook … you only pay for performance, with a low fixed price per “Like.”

The soft drink Mountain Dew had a Facebook sweepstakes. Procter & Gamble swapped a chance to win a $5,000 sweepstakes for testimonials. Colgate toothpaste offered a discount in exchange for a “Like” communication. Lucky Vitamins said, “Like us on Facebook and you can enter to win a year’s supply of vitamins.” Any number of candidates for any number of political offices on any social or economic level will “Facebook” their connections with voters. Nonprofits are also involved: The Red Cross said it’s initiating a training program “for any volunteer who wants to use the social Web to talk about the Red Cross.”

For every one of these, the machinery for separating responders doesn’t function automatically. Somebody pays for it.

An increasingly popular and valid advantage social media have over non-personalized media is the use of celebrities to send messages to their fans and followers. For nonprofits, this could mean a lift with no cost for spokespeople; for commercial marketers who pay these celebrities for endorsements, the careful scrutiny of results, standard practice for conventional media, is very much in order.

One to one? Or one size fits all?
The founder of footwear retailer Zappos is quoted, relative to social media: “Communications should be personalized and not one-size-fits-all. You’ve got to determine who each person is and where do they stand.”

So the word from a major, successful online marketer is specific: Avoiding the clutter of traditional media can pay off. But what happens as social media mature and develop their own clutter? (Two years ago, who ever heard of Pinterest? Or Groupon? Whatever happened to Friendster, generally recognized as the first social medium?)

A genuine “You have to determine who each person is and where does each person stand” posture involves analytical and communicative costs well above standard online media. It means a re-split of responses, which in turn means multiple handling costs and analyses. So that basic dollar-for-dollar, pound-for-pound, euro-for-euro balance comes into play: Does personalization of response to responses add income beyond the additional expense?

Even the most enthusiastic advocates of fan bases agree that amassing huge numbers of likers and followers has fractional significance when matched against activity level. What is the sharing-percentage? What increase in transactional volume can be traced to this source? How about shifts in share of market? Are a disturbing number of people using social media to criticize rather than endorse?

Positive answers to those questions mean adding a plateau of attention. Dispassionate and professional management can be the obvious key to converting unproved enthusiasm to verified result-enhancement.

As social media mature, they’re developing their own pile of clutter. Certainly within the next two years, simplicity will have to yield to psychological specificity. The constant question: What are you delivering that lifts not just interest and ongoing attention, but specific results beyond what any competitor offers?

Does a one-sentence statement exist clarifying the effective use of social media? Oh, sure: You can’t make a major mistake, centering on ROI.

The logical imperative: Keep your prejudices out of your marketing decisions.

I’ll try to do the same.

Herschell Gordon Lewis ( is the principal of Lewis Enterprises, Pompano Beach, Florida, and author of 32 books.

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