Photo originally uploaded by SOCIALisBETTER
Is there a formula that tells you if it’s time for your brand to engage in social media marketing?
By Kevin McIntosh
If you know your audience is online and you’re wondering if social media marketing is for you, here are 10 questions you might ask yourself to see if you’re ready for the social media marketing journey.
October 2008 changed everything. It changed credit availability for businesses and consumers. It wiped out consumer confidence. And it must change the way businesses market.
Why? Because business is now more competitive than ever.
Since October, you’ve likely experienced at least one of the following:
1. Current clients/customers have cut back spending.
2. Current clients/customers have totally stopped spending.
3. Prospective clients/customers have put planned expenditures on hold.
Furthermore, your current clients/customers may be getting more attention from your competitors who are trying to make up for their lost business as well.
If you thought business was competitive before, you haven’t seen anything yet. Recessions are the business world’s way of thinning the herd.
It’s now survival of the fittest. It’s the businesses who innovate and offer the best perceived value to their clients that will thrive in a recession.
So to keep on your competitive toes, here are 5 marketing-related questions business owners need to ask:
1. Is our marketing message as relevant today as it was before October?
Your marketing message may have worked for years. But an economic shake-up can change things real fast. What’s important to people when making purchasing decisions can change. Your marketing message may have to change, too.
2. If not, what should our new marketing message be?
Maybe it’s a value message. Maybe it’s a message that says your business is solid and is here for the long haul. Or it could be a message that reflects how your business is changing with the times to reflect the new economic environment. Look at what’s going on in your industry right now and ask how your marketing message can be adjusted to better reflect the times.
3. What new opportunities does the recession present for our business?
Are there new markets that have opened up for you? Perhaps larger clients would be more attracted to working with you than before for cost-savings reasons. Perhaps the service your business offers will now be attractive to companies who are now outsourcing for the first time due to employee cutbacks. Remember, just because some of your regular opportunities have dried up, doesn’t mean new ones can’t be created.
4. What can we do to provide greater value to our clients?
In a recession, everything becomes more value-driven than ever. Take a good honest look at your service and/or product to see what you can do to offer greater value. And make sure you communicate it in your marketing.
5. Is it time to explore new ways of getting our marketing message out there?
Some of the ways you’ve marketed over the past years may not be as effective now. That trade show that you’ve always spent much of your annual marketing budget on may not have a big turnout this year, as companies cut back on travel expenses. Perhaps this year, to get the ROI you need on marketing, you’ll need to start to leverage social media and public relations to your advantage to create digital word-of-mouth.
October 2008 changed everything. As a result, you are going to feel the competition breathing down your neck in the next year like never before.
If you want to survive this recession, the way you market will have to change.
–Kevin McIntosh
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What is a customer worth to you? I ask that question, because until you understand the lifetime value of a customer, you’ll always have trouble justifying spending money on marketing.
This is how companies like Coca-Cola and Proctor & Gamble can justify spending billions each year to sell products that cost as little as 99 cents. They aren’t advertising to capture a one-time sale. They’re advertising to capture customers for a lifetime. They’re advertising to develop brand loyalty. Their annual sales don’t simply reflect the marketing expenditures they’ve made over the year. Those sales reflect the cumulative impact of advertising over several years.
For example, let’s assume a restaurant owner runs an advertising promotion that brings in 150 new customers in a week who spend an average of $14.95 per customer. That represents $2,242.50 in revenue. Next, assume the restaurant has done its job in creating a dining experience that makes customers want to come back, and that these customers come back 2 times a month for the next 5 years, spending an average of $14.95. Each customer then is worth $358.80 per year, which in five years represents $1,794 in sales per customer. That single promotion then has earned the owner $269,100 in sales over a 5 year period ($1,794 x 150 customers). That doesn’t even begin to take into account the people who they may start to invite to the restaurant for dinner, who then become regular customers as well.
A few months ago, I had a client who told me a single customer could be worth as much as $50,000 in profit to his business. Yet this client had trouble understanding why he should spend a few hundred dollars to write and distribute a press release.
If a bank announced an investment product that could yield $50,000 in a short period of time for an investment of $500, there would be people lined up for miles to purchase it.
Marketing/branding is an investment. It’s an investment in attracting and retaining customers who could possibly generate revenue for you far in excess of your investment. And that doesn’t even take into consideration the extra revenues those customers could generate for you through word-of-mouth marketing.
So when it’s time to budget for your marketing projects, don’t just think about the immediate return on investment. Think about the lifetime value of a new customer gained.
–Kevin McIntosh
