There’s an assumption in social media that if we get fans or followers and cultivate and invest in those relationships, that will create buyers- and possibly even loyal customers.
Well, you know what they say about assumptions, don’t you?
(If you don’t, ask somebody- I’m not going to say it here, because it’s a little inappropriate!)
What if cultivating relationships and engagement with customers doesn’t lead to sales?
Ok, so engagement probably leads to SOME sales. What if it doesn’t lead to very many sales? What if they’re really expensive sales and it’s not profitable?
The data we have from all our clients suggests that for the most part…
Buyers aren’t fans. And fans aren’t buyers.
By the way, before I show you all the data, which some of you are not going to like, let me share a story from when I used to be in alternative medicine…
I used to read a ton of research, because I had to find proof that the acupuncture and herbs I was learned and practicing wasn’t a bunch of B.S.
During all that reading, I ran across this study of medical doctors. It was research about how medical doctors read and responded to research. It turned out that, for the most part…
- If the conclusions of the research conflicted with their preexisting beliefs, they would always question the study’s methodology.
“It must be wrong, so there must be something wrong with the study or data.”
- If the research conclusions agreed with what they already believed, they didn’t look at the methodology at all.
“It’s what I believe so the way it was done must have been fine.”
The upshot? Even our super-smart and scientific doctor friends believe what they want to believe and don’t want to be swayed by the data when it disagrees with their beliefs.
It’s hard to be scientific and objective. It’s hard to be open-minded, because it means you sometimes have to be wrong. Being wrong means you need to change.
We don’t want to change. We want confirmation that we’re already right. We want to keep doing what we already do.
Which is why every agency or social media person that gets paid to do engagement is going to question the validity of the data I use in this post 😉
But this data is based on anywhere from hundreds of thousands of people to millions. In most cases, it’s based on more data than their beliefs will be.
If you disagree with this post- email me (brian at bcg (spell it out) dot com) and tell me what your data is, and how many datapoints or people are in your data. 🙂
Digital Marketing History: From Conversions to Engagement back to Conversions?
How has digital and social marketing evolved?
- I started in 1999 with SEO and AdWords, when the whole digital marketing industry also just starting, and everyone was very focused on traffic, leads and sales.
- Around 2007 and 2008, Twitter exploded and everyone got excited about engagement and relationships.
- By 2010, Facebook was getting hot and companies wanted to grow fans. Initially our first Facebook ads clients back in 2010 all wanted fans. For years, they wanted more Facebook post engagement with those fans and others. Many companies still are chasing post engagement.
Both the original Twitter explosion and the Facebook fan and post engagement movements center on the philosophy that businesses need to be human and relationship-oriented; which you certainly can’t argue with…
Humanized, personable brands certainly are powerful. And relationship building and personality clearly work for one-on-ONE networking. If you’re a salesperson, building relationships makes a ton of sense. No one can argue with that.
But does one-to-MANY big-brand relationship-building create more sales and profits?
Let’s look at the data…
Diving into Consumer Data
As we’ve shifted our Facebook clients toward leads and sales, and as we’ve done Facebook Marketing/Strategy Audits for new clients using Facebook’s data (which includes data from Datalogix, Epsilon and Acxiom)…
- Analyzing creative and targeting: what has worked and what hasn’t?
- Investigating customers on buyer email lists: who are they?
- Discovering prospects on lead lists: who are they?
- Reviewing fans: who are they?
- Characterizing ideal buyers: what makes them unique compared to non-buying prospects and non-buying fans?
Correlating the email addresses, Facebook tells us what it knows about these people, plus:
- Acxiom has detailed entries for more than 190 million people and 126 million households in the U.S., and about 500 million active consumers worldwide.More than 23,000 servers collect and analyze more than 50 trillion data ‘transactions’ a year. pigeonhole people into one of 70 very specific socioeconomic clusters (personas) in an attempt to predict how they’ll act, what they’ll buy, and how companies can persuade them to buy their products.It gathers its data trove from public records, surveys you’ve filled out, your online behavior, and other disparate sources of information, then sells it to banks, retailers, and other buyers.
- Epsilon has the world’s largest cooperative database (over 1 Petabyte of data across global data centers) with over 8.6 billion consumer transactions and 4.8 billion business transactions. The different data Epsilon sells includes age, profession, residence, ethnic information and political affiliation.
- Datalogix, acquired by Oracle in 2015, now called “the Oracle Data Cloud,” it helps Facebook advertisers find customers on Facebook by onboarding first-party data, target customers through relevant audiences, measure campaign effectiveness based on offline purchases; their expertise spans across all industries including; CPG, Retail, Auto, Travel, Financial Services, Telecommunications, Technology and more.Datalogix aggregates and provides insights on over $3 trillion in consumer spending from 1,500 data partners across 110 million US households… across Auto, CPG and Retail Industries;DLX Auto: 99% of all U.S. Sales Captured, 20+ years of ownership data;DLX CPG: 50+ Grocery Chains; 7,000 brands; 300+ categories;DLX Retail: 10 billion transactions; 1,400 retailers; 1,000+ categories.
And by the way, discovering and targeting the ideal buyer is powerful- see our case study of how it lowered one company’s cost per lead by 84% and cost per customer by 60%.
We’ve looked at the data, and the data says: in many cases, buyers aren’t fans, and fans aren’t buyers.
For example, here’s the overlap (or lack thereof) between one company’s…
- Facebook fan base,
- Prospect email list and
- Customer email lists…
Across a number of these audits, we see anywhere from zero overlap to 35%, but that 35% is the exception. The average is 1% or zero.
These are the facts…
That doesn’t mean that you can’t:
- Create campaigns to get buyers engaged, or
- Target your fans better to get them to engage…
But what’s more interesting is this:
When we analyze the difference between loyal buyers, non-loyal buyers, and leads who don’t buy, in many cases, we look at the Facebook activity of
- Buyers vs the non-buyers +
- Loyal buyers vs non-loyal buyers…
…the buyers and the loyal buyers tend to score LOW in post likes, post comments and post shares:
In the chart above, the light blue area is the Facebook average. The dark blue is what the loyal buyers are doing. As you can see, they’re:
- Liking fewer pages than the average Facebook user
- Commenting less than the average Facebook user
- Liking fewer posts than the average Facebook user
- Sharing fewer posts than the average Facebook user
- They’re even clicking on ads less, so we should expect and be OK with a lower ad CTR
We’ve seen this pattern in many buyers and loyal buyer groups.
What does that mean?
Often, the more of a buyer someone is, the less of a social media engager they are.
Now, of course this is not true for every brand…
There are some brands with highly engaged buyers- depending on that brand’s psychographic or demographic.
There are exceptions, and you should analyze your own customer and prospect lists to discover the truth about your customers.
But be open to the idea that your best buyers and your most loyal buyers may not be the people who want to engage with your fan page or posts.
Think Realistically About Buyers and Engagement
When you go to Amazon to buy, are you feeling chatty?
Or do you just want to buy the danged thing and get going?
Speaking for myself, I might do some research or comparison before I select the item or the company to buy from, but I’m not in the mood to like or comment on Facebook posts- I’m ready to buy.
I’m often buying something that few or none of my friends have ever bought. I may not be in a community of people based on that thing I’m buying, so trying to get that purchase info socially is not always realistic. Not all purchases are social- and not all the people who buy them are social.
For example, I rock climb, and I even have a local climbing gym, but I don’t care at all what the guys at my local climbing gym think about my next pair of climbing shoes- I just read the Amazon reviews. That might be a form of social, but it’s not on Facebook.
On the engagement side of the equation, who are the most socially engaged people you know?
Consistently the Facebook tell us the most engaged demographic is 13-18 year old females. They’re also one of the groups with the least money! They’re high engagement but don’t have much buying power.
Facebook Audience insights won’t show us the 13-18 group, but here are the 18-24 females:
See how every interaction is above average, except for promotions redeemed- interesting… redeemed promotions requires money, and they’re only average at that.
Now, think about the no-nonsense rich powerful guy in his 50’s; does he want to sit around and engage with you on Facebook? No! He barely even wants to be ON Facebook! He want to get in and get out, because he has more important things to do. The following chart is the activity level of the over 50 guy with a net worth over $1 milion:
As soon as I switched it from both genders to men only, the activity dropped. And by the way, in some of our audits, we find that the loyalty groups are more men-predominant… so there you go- loyal buyers not wanted to engage on Facebook!
Early in our Facebook marketing days, we had a client whose customers were all action sports dudes- they all wanted to buy GoPro helmets, but none of them wanted to interact with Facebook posts. They just wanted to go outside and do stuff. They weren’t into social media engagement. Make sure you know your audience.
There are some exceptions- some of the female demographics are very engaged- but again, this engagement doesn’t always lead to sales. I recommend a healthy dose of skepticism, measure your engagement tactics and monitor very closely whether they’re actually converting.
So many social campaigns are called successes based solely on engagement metrics- yet here’s no proof they’re leading to any bottom-line results.
Is It Because of How Facebook Ads Work?
There is actually a really good reason about why buyers would not be fans and fans would not be buyers- and it’s baked right into how Facebook ads work.
The ad type you choose adds another level of targeting to the ad- so
- When you do a page like ad or a post promotion ad, your ad is shown to the type of people who engage, but not necessarily those who click links or buy.
- When you do a conversion ad, you’re shown to the type of people who buy, but don’t necessarily engage.
The fact is, some people are more likely to do one or the other, and the Facebook ads display algorithm picks the subgroup based on your ad goal.
So, if you want to beat that, you’ll have to
- Do conversion ads targeted to fans (but stop them if they’re not cost-effective)
- Run post promo ads that get conversions (but often these are not cost-effective)
You’ll have to keep an eye on the costs of both. In our experience, they are not the most profitable approaches.
The Most Cost-Effective Facebook Strategies
We find that the best approach is not this strategy:
With every step in a digital funnel, most people drop out, so longer funnels are not good.
Reachpocalypse happened, and now organic visibility on average is only 2.6%. You have to pay to get fans, pay for visibility, and then post promotion ads don’t tend to lead to affordable link clicks.
The entire process is very expensive, and you spend a lot of time with fans who may be more interested in engaging than buying.
The fan marketing is the strategy the entire industry started with, and it wasn’t until we tried other methods with multiple clients, the data convinced us this wasn’t the most efficient method.
This strategy is better:
Here we’ve cut out three steps, which means losing three failure points.
We can still target fans, or email audiences, or totally new cold audiences, but we send them directly to the website right away. If they don’t buy right away, we retarget them.
The website retargeting ad guarantees a higher quality visitor that’s more likely to buy (this is a second level of targeting I’ll explain on further slides).
Cost per sale is as much as 90% lower with this method than the fan marketing method.
We recommend you use conversion ads to go straight for sales.
And if you’re doing lead gen before sales, use this:
Get to it!