Last month, our very own Keegan Forte wrote a post on the evolution of social media marketing from its initial days of manual content creation to the game changing technology solutions that are enabling CMOs to automate and interact via social media like never before.
As content generation and management have evolved, so have the adaptive reflexes between consumers and enterprises in capturing value from this content. The first wave of social media focused on users generating and absorbing content with minimal focus on enterprise value. In short order, corporations rushed to cash in on this wave of consumer exuberance through social media marketing strategies that enabled them to reach new and exciting user communities, some of which are utilizing the tools that Keegan referenced in her post. As these strategies became increasingly more sophisticated, firms began to exploit the data behind user content, giving light to applications that enabled improved insights on consumer behavior that improved both targeting and relevancy. And, as this pendulum swinging between consumer and enterprise driven adaptations continues, consumers are now being empowered like never before due to their social media presence.
While legacy CRM solutions focused almost exclusively on transactional and demographic information in establishing the likely value of a customer, these measures fail to capture the full breadth of digital information available for assessing the evolving components of a Customer’s Lifetime Value (CLTV). Initial marketing strategies focused on using social media as a means to reduce churn or customer acquisition costs (CAC), however, marketers are now reengineering consumers as brand ambassadors to extend the reach and efficacy of their marketing efforts.
The emergence of social influence has created further differentiation across customer relationships, and consumers have transformed awareness of this influence into differentiated customer treatment. While brands were able to attract and retain customers with transactional loyalty rewards systems in the past, consumers are now expecting to be “compensated” for their social activity as well. Despite the additional costs of operating expanded loyalty reward frameworks, many brands are happy to do so recognizing the incremental value of a customer’s brand affinity and propensity to recommend products those in their network (Syncapse estimates that “Fans” of a brand are $166 more valuable than their “Non-Fan” counterparts when accounting for these factors).
Digital loyalty, however, can be measured more granularly than a page “like” and new tools are evolving to better track loyalty behavior through analysis of consumer social media interactions. The transparency of social media inhibits multi-homing across competing brands providing immense value to top marketers, however the majority of brands are only beginning to tap into its value. While 55% of marketing executives claim their companies are collecting social data, a whopping 75% admit that their companies have a hard time integrating and accessing social data with their media and CRM systems. (Axciom) Making this data more accessible and actionable will ensure that next generation loyalty and CRM solutions become more pervasive in the market and more accurately capture the holistic value of a customer. Initial solutions in the market have yielded superior returns for their early adopter clients with enrolled customers spending up to 8X more per transaction and generating 10X webpage views than other customers. (Crowdtwist) Evolution of these systems has the chance to fundamentally impact the way that consumers and enterprises interact with one another, while creating immense opportunities to market products through an enterprise’s own customers, rather than through paid advertising.