How People Are Creating Social Media Sales & Profits in 2018

Are you ready to get more from your social media than just awareness and engagement?

Are you dissatisfied with not knowing social media’s impact on your organization’s bottom line?

Do you want to join the organizations and marketers who are developing business with social media marketing?

Then you’ll love this article, which covers how top marketers are driving and tracking sales and profits with social media marketing in 2018.

The State of Social Media Results

Recent surveys of marketers and CMO’s tell us that many companies have not yet solved many basic social media marketing problems:

  • Marketing executives rate their integration of social media with their marketing strategy just 4.1 on a scale of 7 (CMO Survey, 2018, page 48). How can you expect great social marketing results, if your social strategy is out of alignment with your marketing strategy?
  • 56% of 5,700 social marketers surveyed by Social Media Examiner in 2018 are uncertain about their social media profits or were unable to measure it. Only 10% (570 social marketers) strongly agreed they were able to measure their social media profits. 
    These are the professional social marketers- the top of their field. Imagine how difficult and uncertain it is for small business owners who aren’t caught up on the latest tactics and who have to wear seven hats in their businesses. And consider that there are over 2 million small businesses in the U.S., 500 Fortune 500 companies, 5,000 companies in the Inc 5000…. If only 570 social marketers have strong confidence in their ROI measurement, then most companies don’t have someone who’s confident about it.
  • Although marketing executives’ #1 overall goal was customer acquisition, their #1 use of social media was not customer acquisition- it was brand awareness and brand building. Customer acquisition was their #2 purpose for social media (CMO Survey 2018, page 51). This odd priority echoes the above misalignment with their overall marketing strategy. It may be due to a misunderstanding or underestimation of the capabilities of social media marketing, or it may be reflective of the social media freelancers, agencies or employees they’ve had up to this point. When you work with social media personnel whose background is only in PR or branding, their orientation can affect your approach.
  • When marketing executives were asked to what degree social media contributed to their company’s performance (a vague question to be sure, but corporate performance typically is heavily based on revenue and profits), they answered with an average of 3.3 on a scale of 7. That’s not an overwhelming vote.
  • There are older surveys and stats that talk about the challenges of measuring social media, but I’ll stick to recent ones.

Does it surprise to you that marketers are having trouble improving social media profits if they aren’t measuring it well?

It shouldn’t, because as Peter Drucker said, “You can’t manage what you can’t measure.”

In digital and social marketing, you can’t improve what you can’t measure.

And when your social marketing strategies are not aligned with your overall marketing priorities, you have a recipe for social mediocrity.

The solutions to the problems that marketers and executives are surfacing are:

  1. Prioritize the use of social media for business development: customer acquisition, sales and profits. Ask for more from your social marketing. It’s capable of it.
  2. Hold social media accountable for achieving these goals.
  3. Make it a priority to measure social media accurately. Choose KPI’s, sales goals and start to measure profitability tied to your resources, labor, time and costs.
  4. Budget for social advertising, because it’s the most certain way to drive these results in social media.
  5. Get the people, resources, talent, training and tools you need to make this happen.

Easier said than done, right?

But you can do it. Many companies have.

So, let’s dive in!

How Today’s Marketers Are Making Social Media Profitable

How do leading marketers prove the impact of social on their bottom line?

The best marketers have social sales and profits analytics at their fingertips.

Many companies don’t realize their analytics are set up wrong and are inaccurate.

Do you have the tracking, the data and the insights you need to prove how social is driving customer and profits for your business? And to measure and improve it?

What does that look like? In our experience, these are the kinds of things you need:

  • Expertise, or at least competence, at understanding, exporting and analyzing data from the social platforms: Facebook Page Insights, Facebook Ad Manager, Facebook Audience Insights, Twitter Ads, Twitter Insights, Instagram Ads, LinkedIn Ads, etc.
  • Professional implementation of social ad tracking pixels: If you are using Facebook, Instagram, Twitter, LinkedIn or similar ads that use conversion code, make sure you either have a professional install and check the code, or hire one to check it. Not only is that code critical and indispensable for tracking, it also it essential to how the ads run. You need it for retargeting and in some networks, it also affects how well or poorly the ads are targeted within your targeting selections. It’s not optional. We’ve heard many IT and programming people who were not professional digital marketers assume that these pixels were only for tracking and that web analytics or a CRM would be enough. They are not. The tracking from the ad platforms must be installed also. If your web or ecommerce platforms are not compatible with the common ad platforms, they need to “get with it”, you need to switch to another platform that is compatible, or you will have to hire programmers to fix it. Or you will be seriously hampered against your competitors in the marketplace. We’ve worked with clients who had to stop marketing socially for 4 months while they had programmers white-label and make their third party scheduling software compatible with Facebook ads. It’s a problem of ignorance in the SaaS industry that will eventually fix itself, but it may take another five years.
  • Google Analytics (or the like) with UTM parameters: you must manually help GA track the source/medium of all website traffic from social, or some will be undercounted. For example, without this, Facebook traffic will be undercounted by as much as 40% and will be placed in the “Direct” category.
  • Google Analytics conversion assist reports: you need to consider both first click and last click, because once you graduate from the search marketing last-click only mentality, you will drive a greater volume of traffic and sales, but without first-click reports, you may cut out some of the first-click sources that ultimately drive your sales. Often, retargeting ads from various networks, and search sources close the sale with a last-click, but they may never have happened without the first click. Facebook, Instagram, Twitter and LinkedIn ads can increase your organic search volume dramatically, but you’ll never have evidence of this and you’ll spend in the wrong places without these reports.
  • Professional CRM, and any additional add-ons required to track accurately: You need something like Salesforce, Hubspot, Infusionsoft, Zoho or the like if you are driving leads for salespeople. Your email account isn’t good enough. You need to track the leads in a professional system, and you need marketing attribution. Also, beware of conflicts in attribution reporting. Just as GA can misattribute social traffic, so can CRM’s. For example, if you use Hubspot free, or even paid without buying the Ads Add-on, Hubspot will not track Facebook ad traffic accurately. They admit this in their help screens.

Branding Alone Doesn’t Drive Sales

How do top marketers do social branding in a way that drives new customers?

Savvy marketers drive engagement, sales and profits while leading their categories.

The painful truth many companies discover is that branding alone doesn’t create sales. Just putting your brand out there doesn’t create sales. Just creating engaging posts doesn’t get you new customers. It might drive a few, but not enough to sustain a business. Not enough to call social media a viable business development channel that you’d want to dump more cash into and scale.

Do you have the tracking, ads, posts and optimization strategies in place to cash in on social?

First I’ll give you a list of the things that don’t drive customer growth and sales in social media- and then I’ll give you a list of the things that do drive them:

What doesn’t drive social media many sales and profits, if any:

  • Tweetchats: they’re usually measure in terms of reach, which is not unique reach, so it’s deceptively high. There often aren’t a lot of links included in the chat’s tweets, so you may not even get much website traffic, let alone sales.
  • Facebook posting without ads: Most pages don’t reach very many people when they post, unless they advertise to promote that post. Without reach, you have very little chance of anything else happening… like traffic, leads or sales.
  • Facebook posts boosted on the page: This is the poor cousin of the engagement ad you can create in the Ad Manager, and it doesn’t work as well. It’s often created by someone who’s not really a Facebook ad professional, the targeting isn’t good, and the post itself may not have a high engagement rate. If it doesn’t have a link in it, there’s little chance of traffic, leads or sales. Even with a link, this is one of the worst ad types to try to try traffic, leads or sales with. You’ll probably just gets some engagement, and that’s it. But your costs will be high and your money won’t go as far as with an engagement ad in the Ad Manager.
  • Instagram posts: you can’t add a link- they have to go to your bio link, and you only get one- it’s an extra step, and you may not have that many followers… so you probably won’t get very much traffic, if any… and even less leads or sales. You can promote these posts within the app, but again, these are not as good as creating Instagram as from within the Facebook ad manager.

What drives more social media sales and profits? Let’s move to the next section…

Social Ads Help Drive and Measure Sales & Profits

Why are Facebook, Instagram, Twitter and LinkedIn ads the most effective and trackable form of social media marketing?

Why are these ads the main drivers in social media sales and profits?

Because social ads drive not just engagement but also traffic, sales and profits… from 300% to 700% and higher.

Here are a few very short results from some case studies using social ads:

Lead Generation Case Studies

  • HOME GOODS: We helped a home goods company lowered their cost per lead by 84%, getting them 7x the leads. We also more than doubled their new customer acquisition speed across their entire company. They were using an omnichannel approach, and the social ads, used as a swiss army knife for awareness, engagement and lead generation also directly drove some sales. We commissioned a third-party impact study and discovered that the social campaigns had stimulated an increase in organic searches in Google for their brand name. It was a shot in the arm for their entire company. Most of these effects happened within 4 months. The first month wasn’t brilliant, but soon after our measurement abilities enabled us to drop costs and drive performance.
  • IT/CLOUD: We worked with a number of Microsoft’s partners in the cloud hosting business. For one, we created a new whitepaper. They wanted to experiment with Facebook ads rather than LinkedIn ads. We targeted CIO’s, sys admins and IT people. The most affordable leads were $29 each. According to industry stats, average lead in IT costs $370. Our cost was 92% more affordable than that. Facebook’s ad costs are quite low, and its ability to target job titles makes it both powerful and affordable. Sometimes LinkedIn is better, but LinkedIn can also be expensive and lower volume, since people spend an average of 2 minutes a day on LinkedIn and 35 minutes a day on Facebook. This, of course, varies with the audience.
  • RECRUITING/STAFFING: We’ve worked with a number of companies to fill staffing and recruiting gaps applicants. We’ve been able to drive job applicants at 75% lower costs than CareerBuilder. Our social advertising for job candidates drives more traffic for these companies than any other source including Indeed.com.
  • MARKETING: We created a lead-quiz for a marketing agency and drove thousands of leads for just $1.74 each. The average lead cost in this industry is $173. Our cost was 99% more affordable.
  • SAAS: A SaaS company wanted to reach only people who worked at Fortune 1000 companies. We drove traffic to their whitepaper and got them new demos for $26 each. Again, the standard here is $370, and this was similarly about 93% more affordable than average.
  • EDUCATION: We teamed up with an educational bookstore to run multiple lead gen contests. The average email acquisition cost has been around $0.60 apiece. The average lead cost in the Education industry is $60. Our leads were roughly 99% more affordable than average.

Why is the average lead cost so high and were ours so affordable? In part, the average costs are high because they include many traditional offline lead gen sources, which are more expensive. They also may include mark-ups for retail selling of leads. And we always see drastic reduction in costs when we do a lot of testing and discovery online. In traditional marketing, you can’t test a lot of things to find the most effective, compelling offer, wording, video or picture. Online we discover huge advantages through testing, and it saves companies lots of money and increases profits dramatically.

Again, when you can measure it, you can improve it. And we can measure a lot more things a lot more finely online.

When you explore the best in each of these categories, your improvements multiply:

  • Targeting and customer psychology
  • Creative, video, ads, copywriting and persuasion tactics
  • Landing Pages and conversion optimization
  • Lead Magnets, ebooks, whitepapers, quizzes, etc.

Make sure you aren’t lazy about your creative and testing/discovery processes. If you are, you’ll pay more than you need to, and you won’t get the kind of results we’re talking about here.

Ecommerce Case Studies

  • HOME GOODS: With the home goods client above, we achieved a 60% reduction in cost per new customer. We saw over 900% ROI on the social video ad campaigns. 1,000% ROI on post engagement. And overall a 274% ROI on customer acquisition.
  • TRAVEL: We’ve worked for years with a specialty cruise company drive customer bookings for as low as $30 apiece.
  • FOOD & BEV: We drove 22x in revenue for a small pizza chain in Scotland of all places. I’ve been told not to talk about this one because the ROI sounds so high that it’s unbelievable. Oh well… those were the real numbers. Believe what you want. It’s true!
  • HEALTH: We opened up a new revenue channel for a health products business. It was 700% ROI and the first year we drove 6 figures in revenue monthly.
  • FITNESS: We helped a franchise personal training business open up a new marketing channel. Their goal was $700 per customer. We drove new customers at $415 apiece.

Social media driven ecommerce is the most challenging thing we’ve seen in digital marketing, but with enough time, investment and the right people and tools, profits can be found.

Sometimes it’s easy. Sometimes it’s difficult, and there are technical, branding and budget challenges. Every situation is different.

How Do Businesses Make This Happen?

These kinds of successes don’t happen instantly. There’s no magical CASH button in digital marketing. There are plenty of people trying to sell short-lived or fantastic tricks and short-cuts. As in many areas of life, those who can only tolerate easy answers tend to fall for get-rich-quick schemes and lose their shirts.

If you’re smart, responsible and realistic, you have much better chances of success.

Creating profitable social marketing is a process that takes 3-6-12 months. Businesses need to commit $5k in ad spend or more per month. It’s an investment. You’ll see a return on it, but not instantly.

  • Month one is all about set-up. Ads may start running, but you have to get all the pixels and analytics in place, have the right targeting, all the right creative, etc.
  • The first three months tells you what’s going to be profitable and what isn’t. You should have some really effective targeting and ads by the end of month three. That means affordable, high-quality leads if lead-gen, or profitable ads if ecommerce.
  • By the six month mark your entire social campaign should reliably drive efficient results to the extent that it has made up for the costs of the first three months.
  • By 12 months you should have learned so much and be getting such great results that you won’t even recognize your social program. It may have revolutionized your entire marketing program with the insights you’ve gathered.

Who Can Help You Accomplish All This?

We’re not born with kinds of skills you need to do the social advertising and analytics that drive social media profits. Digital natives don’t have them just because they know how to use Snapchat. Experts need business skills, copywriting skills, technical ad platform experience, analytics talents, and marketing experience.

You’re going to need:

  • Social ad expertise: Facebook ads, Instagram ads, Twitter ads, LinkedIn ads. Do you want to have all those options? Do you already have someone who does Google ads for you? You may get some social strategy expertise when you get someone who can do the social ads, but you probably want to ask them about it.
  • Analytics expertise: Website analytics like Google Analytics or Adobe Omniture expertise, CRM analysis, marketing automation analytics if you use Infusionsoft or Marketo or the like.

So how do you add that to your company? These are your real-life choices:

  1. If you’re a small business owner, you may want to do it yourself… sacrifice your own hobbies, free time and families to spend 20-40 hours a week learning for 3 years (why do you think all the job listings for this stuff ask for a minimum amount of experience?)
  2. Hire someone with no experience and wait 3 years for them to have significant experience and expertise. Are they taking online courses to learn? Are you paying for that?
  3. Outsource to someone freelance and part-time via a platform like Upwork. They’ll cost anywhere from $30-$60 per hour.
  4. Hire expert employees, experienced at ad platforms or analytics: $50-80K per year each – you’re going to need several to cover all the areas of expertise you need.
  5. Hire an expert agency: $30-60K per year (we find that the costs our agency are lower than in-house employees because we have multiple experts on staff who can more efficiently cover our various clients)
  6. Do nothing. Keep your social media status quo. Risk falling behind the competition.

Notice- what is not an option is: Do a whole bunch of random things you read on social media blogs… with no experience, no analytics, no skills… You CAN do that, if you don’t want to create any real impact. But if you want to drive new customers, sales and profits, you need expertise.

Conclusion

So, if you want your social to be as profitable as it is for these businesses:

  • Make a commitment to build the program for 6-12 months.
  • Set your goals.
  • Create a budget.
  • Hire the people or the agency.
  • Start using social ads and all the analytics I talked about above.

Once you’ve done that, you’ll be able to measure your social media results.

Now go improve them!

3 Simple Steps to Build a Social Media Marketing Sales Funnel

Originally posted on SME

Are you looking for a smart way to use social channels for lead conversion?

Are you tracking and leveraging your target customers’ path to buying your product?

Collecting fans and followers is one thing, converting them to paying customers can be quite another. That is, unless you have a customized sales funnel in place.

In this article you’ll discover how to put together a marketing and sales funnel with the right channels and key trackable metrics. You’ll also find advice on how to test and tweak your funnel for maximum boost.

Why Is Your Marketing and Sales Funnel Such a Big Deal?

Social media marketing is about using social networks and tools to guide prospects through a series of steps–a funnel–to get them to take the actions you want (e.g., becoming a fan, sharing their email address or buying your products or services).

There are tons of social media tools, networks and options that include everything from Facebook and Twitter to landing pages and email marketing to SEO and ads. Each of these social marketing channels is one more way to guide your prospects through your sales funnel.

marketing channels

Use varied social marketing channels to guide your prospects through your sales funnel.

With all of these marketing channels at your disposal, how do you decide which ones fit within your sales funnel?

To answer those questions, you have to know who your potential customers are and how you can reach them most effectively. You also have to know your company’s goals, how you’ll measure those goals (i.e., the metrics you’ll analyze) and what your target numbers are for those metrics.

Without those key facts, your marketing and sales funnel will be skewed. Excessive focus on one part of your funnel can cause problems elsewhere. If you focus only on owned media like follower numbers and email addresses, you may have trouble with conversions. Or, if you only focus on brand awareness and neglect email marketing, you’ll likely miss out on sales.

Every decision you make about how to create brand awareness, garner engagement and make conversions and sales should be a reflection of your funnel.

The rest of this article shows you how to build, track and test your marketing and sales funnel to give your company the big results it wants.

#1: Define and Implement Channels and Jobs

Did I mention you have a ton of social marketing tools at your disposal? Frankly, it can be overwhelming to think about using all of them at once as part of your marketing and sales funnel. So don’t.

Start by determining what your high-level sales path should look like. In the example a little further down, I’m using Awareness, Repeat Visibility and Engagement and Sales.

Next, prioritize the social channels and tools your audience is already using and that you’re familiar with, then organize those by their primary function (or job). For example, Facebook is great for raising awareness and driving leads, but not for converting sales. Email blasts are excellent for conversions, but not awareness.

As you’re deciding which marketing channels go where in your funnel, consider which ones are most relevant to your short-term and long-term goals, what each channel’s strengths and weaknesses are and what job you’re expecting that channel to do.

marketing funnel concept

Use your funnel to organize your channels and hold each accountable for its role in the process.

As you see in the illustration above, you may have channels that overlap; for instance, different kinds of social ads in the Awareness part of the funnel. In addition, each channel may have different facets (e.g., Facebook ads versus Facebook fans). Each facet builds upon its own functions, as well as the functions of other networks, to lead to your ultimate goal: sales.

Your funnel should be stable, but not inflexible. If your company cares more about email marketing than its number of followers, adjust your tactics accordingly.

For example, instead of using Facebook ads to increase brand awareness and gain more fans, jump straight to an ad campaign targeted at list building. Create an ad that sends leads to an optimized landing page on your website where you ask them to share their email address to access content, a download, etc.

#2: Assign and Measure Key Metrics

Any bottlenecks in your funnel will slow your momentum or stop it completely. Depending on where the bottleneck happens, you could miss out on brand awareness opportunities, growing your owned media lists or conversions and sales.

To measure the health of your funnel, you need to assign key metrics to each stage. That usually looks something like this:

marketing funnel channel metrics

Set a key metric for each tactic in each part of your funnel to quickly diagnose where the funnel is anemic.

With your key metrics in place, look at each tactic in each funnel section and set any industry benchmark standards.

Use these benchmarks to compare your company to your competitors and your industry as a whole. How do you stack up? Look at which of your tactics and funnel sections are best or worst compared to industry averages and adjust as needed.

Speaking of benchmarks and comparing, are you making the most of your analytics and tracking what you need to track? Awareness metrics, Facebook Insights and Google Analytics all have flaws, but I have a few tips for you.

If you’re tracking awareness, I suggest looking at impressions instead of reach. Tools like AdWords don’t give reach data and Facebook’s reach data is inaccurate.

Have you noticed that you’re getting inconsistent results from your Facebook Insights? Start exporting your Insights data to an Excel spreadsheet so you can consistently track and compare the right metrics and get a better idea of how your tactics are working long-term.

You’re probably using Google Analytics on your website, but if you’re not using the Google URL Builder or event tracking, you’re missing out on a lot of useful data. Google URL Builder allows you to customize URLs for posts and ads so you can track visitors from social networks and how they move through your site.

yoast wordpress plugin

Yoast’s Google Analytics WordPress plugin tracks events.

Event tracking gives you information about button or link clicks, which is especially useful if customers have to go offsite to buy your product. If you have a WordPress site, you can even install this plugin that automatically creates event tracking for you!

#3: Test and Tweak, Then Test Again

The number-one thing you can do to boost your results is test everything. Every good idea you think of is something to test.

As you test, always think in terms of your key metrics and make use of your analytics to find out what works and what doesn’t. Let’s use Facebook as an example.

You can constantly test your Facebook success by trying a variety of status updates. Which has the best engagement rate—photos, text, links or video? Does your audience prefer news or funny videos or memes? Take the time to analyze your previous and current posts to see what worked and what didn’t.

If you want to find your engagement rate for a given post, I suggest dividing its total engagement (likes, shares, comments, clicks, etc.) by total post impressions. If you’re using Facebook ads, the Facebook ad display algorithm shows which posts get the most engagement.

post engagement metrics

Pay attention to which posts your fans respond to.

The key is to look at your best and your worst posts. In both instances, keep an eye out for differences in post type, topic, colors, sentiment, message and graphic style.

What do your 10 most engaging posts have in common? What do your 10 least engaging posts have in common? Just knowing the commonalities of those top and bottom posts can help you dramatically boost your post engagement.

When I went through this exercise for a client, their page had a month-over-month increase of seven times as many likes, comments and shares and 31 times as many link clicks!

Are you using ads? Then you definitely need to be testing!

Ads burn out fast, so it’s important to create and test ads weekly. If you have the budget for it, you can create, test and optimize new ads three times a week or more.

If you’re using AdWords, create new ads until the point of diminishing returns. Check actual search phrases to see if you need more negative keywords. If your AdWords manager is slacking, get an AdWords Audit.

google adwords

Do you use Google AdWords?

Not sure which channel ads to spend money on? Compare your options. Run Facebook, Twitter and even Reddit ads to see which works best for your audience and gives you the best awareness or conversions for your money.

A Quick Note About Content Calendars

A lot of brands use a content calendar to create a month of posts (for Facebook, Google+ or any other channel) ahead of time and then submit it for review. This seems organized and diligent, but in practice I believe this approach makes you less likely to improve your posts and get better results.

Every month you need to analyze your key metrics and learn from any mistakes. It’s hard to implement those lessons when you’ve already assigned content for the next month (without the benefit of analysis).

In place of content calendars, I recommend submitting examples of types of posts you want to test or creating your posts daily, or at least weekly.

Conclusion

Customers like to make decisions on their own terms. In most cases, they’re looking for a relationship with a company, not necessarily a hard sell. You can use this human nature to your advantage.

Take note of the social channels your audience is using most, then use those channels to guide them through your sales process.

Set up a funnel that allows leads to jump in wherever they need to. If your funnel is stable but flexible, you’ll be able to adjust its use to fit your customers’ behaviors and needs—and make sales.

Your biggest sales results will come from constant measuring and testing. Be prepared to make changes quickly and match your customers’ reactions to your efforts. You’ll be seeing intensified results in no time.

What if Your Fans Aren’t Buyers and Your Buyers Don’t Want to Be Fans?

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!)

spaceyknow

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?

  1. 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.
  2. Around 2007 and 2008, Twitter exploded and everyone got excited about engagement and relationships.
  3. 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?

buyers

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…

buyerfanoverlap

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:

interactionofbuyers

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:

1824fem

 

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:

over50over1mguy

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:

assumedfbstrategy

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:

bettersalesstrategy

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:betterleadgen

That’s it.

Get to it!