Our friend Matt Keylock at dunnhumby posted a summary of our latest research on the sales benefit of targeting known customers in advocacy marketing over at RetailWire. Matt asks readers “As social media continues to transform how brands and retailers engage with their customers, do you see advocacy becoming a more solid component of the marketing mix?” and “What programs or activities have been effective at driving high-quality, meaningful advocacy in social media?” An interesting conversation is starting in the comments. Check it out and chime in.
Here’s his post.
The more authentic the endorsement, the more effective it is in increasing sales for your brand. New research I presented with our social marketing group, BzzAgent, at this year’s ARF Audience Measurement 7.0 Conference shows how important loyal customers are to the success of advocacy marketing programs. Our study found that targeting people based on their purchase behaviors — along with social influence scores and demographic profiles — drives higher levels of in-store sales than using social scoring or demographics alone. In fact, advocacy programs focusing on loyal customers increased sales by an average of eight percent. This is 19 percent higher than previous studies using demographic targeting.
But it appears the benefits don’t end there. These advocates have a more authentic and personal connection to the brand so it’s likely they will keep talking long after their involvement in a program ends. The shopper-targeted campaigns in our study saw sales lifts continue at levels averaging 50 percent of their peak as long as six months later.
Today, advocacy marketing is big business. While trust in traditional media has plummeted, trust in earned media has risen 18 percent since 2007. According to Nielsen, 92 percent of people today trust earned media, including recommendations of their friends and family, more than traditional media. One national retailer estimates that improving advocacy among their customers can be a $5.3 billion opportunity.
It seems obvious to focus on loyal customers for advocacy marketing, but most marketers are not doing so. Many don’t even know which of their customers are active in social networks. Their customers are anonymous online and the conversations they have about the brand aren’t connected to in-store purchase activities. Those with the potential to be persuasive advocates are not recognized or engaged in a personal way.
Instead, many marketers target based on demographic profiles (collected by surveys), the brand’s Facebook/Twitters followers or by scores measuring their social influence. These consumers may be social-savvy, but they don’t have a strong connection to the brand. Their advocacy can lack in-depth personal experience and be short-lived, limiting their influence on sales of the product.
Our study indicates strongly that targeting customers based on their purchase histories (collected by retailer loyalty card programs), makes a big difference in the quality of the advocacy created and, thereby, the impact it has at the cash register. It’s the difference between asking them what they like to buy and seeing what they’ve actually bought. The ultimate goal is finding those customers in the right demographic target, with a relevant purchasing history, who have active social media followings.ReTweet