Monday, March 1, 2010

Social Media Business Model - Lead Generation?

Every once in awhile I have an ‘ahha’ moment. That’s one of the fun aspects of working in an emerging discipline where we are still figuring things out. A few months ago it was the realization that we don’t need to use awareness—in the traditional media sense—as a social media objective. Why spend money on marketing research to measure creation of awareness when we can offer people reasons to act? Is it possible for a person to take action, even a simple click-through, without having some minimal level of awareness? I don’t see how. We can manage the results of behavior to take them a step further, perhaps following the steps of the traditional hierarchy of awareness, but we can use behavior to measure each step, not marketing research. Here’s one related post.

That line of thinking probably led to the ‘ah ha’ I had last week. Almost all social media marketing is the first step in a conversion process. There are several possible scenarios:
• Most marketers are not going to sell things directly on social networks, at least for some time to come. Threadless is one of the few successful businesses doing so. Others like Zappos use social media as an integral part of their online communications but sell from their website. That’s the typical model today.
• Whether you are using social media to drive people to websites or to retail stores, there is clearly a ‘next step’ behavior you want them to take. It is possible that you link to a product page on your website or to a retail coupon, and the ‘next step’ is taken immediately. If so, you have metrics, and you can track the referral back to the social media site. However, research shows this is often not the case; purchases are often not made as a result of a first visit to a website. That requires the marketer to build a complex tracking process to match a later purchase with first exposure. That is part of conversion marketing metrics.
• Social media is often part of a relationship building strategy. Getting people to friend our Facebook page or getting them to register for our enewsletter represent two good examples. There are all sorts of reasons why people may not purchase right away. There are an equal number of good reasons why marketers should be in touch while they move through the purchase cycle.

All except the immediate click-through and purchase represent the need for formal conversion marketing strategies. I don’t have any data, but my guess is that the second and third bullets represent the bulk of social media-initiated contacts with customers. The second scenario requires creating a conversion path through the website. The third requires a conversion strategy that’s based in a set of communications steps. Both are conversion marketing!

That begs a simple definition of conversion. Consider the possibilities. For the social marketer, “conversion” can be a referral from the social network to the website. For the online marketer it can be registering for brand communications. For the brand marketer it is likely to be the purchase. It’s a process, the traditional conversion funnel. Today there are even more marketing actors involved in the process. That’s complex from the perspective of the marketing organization. It has to be seamless from the perspective of the customer.

So does this statement make sense? Most social media marketing is the first step in converting someone from a spectator to a customer.

4 comments:

Rob Torte said...

In short, the answer to your question is "Yes". I think marketing, by it's very nature, has the purpose of causing someone to take a desired action, usually a purchase. I don't see how social media marketing could be different in that respect. We could argue about creating "awareness" in traditional media, but as you've pointed out a number of times: If someone is taking an action online, then the awareness is there by default. As a business, it seems to me that companies create facebooks, twitters, blogs, youtube channels, etc with the overarching goal of turning users into purchasers.
Now, that doesn't mean they do this very well. After all, it has to be subtle. Simply creating a twitter feed that constantly spams people with ads for a product won't work. Likewise, having a youtube channel that no one ever watches is equally as ineffective. Take Toyota and their facebook page, for example. Right after the recall crisis hit, we saw the negative reaction there. Toyota's job is to sell cars, and they were inept on how to use their social media to further that aim during a crisis. I saw a Toyota commercial on TV today that did a much better job. They showed people who had purchased the car in the past couple days and they made a strong and compelling argument that the cars are good. I haven't gone to Toyota's facebook page today, but my guess would be that same message is still absent.

Mary Lou Roberts said...

You said it better than I did, Rob. Thanks!

arvin said...

Think of lead generation as a series of conversations with your audience, not campaigns. Show your prospects that you understand their industry, and specific issues, and that you are interested in building a long term relationship.

Conversion Marketing said...

The Internet is an amazing resource for any business. It is a network which connects all of the world's people. Social media is often part of a relationship building strategy.