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Social Media Networks Most Valued for Loyalty Promotion

A recent study finds U.S. companies that use social media to deepen customer loyalty spend nearly twice as much on that marketing as do companies who use social media to attain other objectives.

Average spending by respondents who focused on loyalty is expected to top $100,000 – nearly twice as much as those focusing on brand awareness and three times the spending levels for customer acquisition. Those were the three top goals of social media marketers.

But even though social media usage is roughly doubling every two years right now, only 1 in 4 marketers spend as much as 2% of their total budget in the social arena. Smaller companies, however, which tend to have smaller and tighter marketing budgets, are significantly more likely to go the social media route – devoting almost half their marketing budgets there.

The challenge for marketers is to go beyond the dollars-and-cents decision, and to find ways to make the investment pay off – no matter how large or small. It’s easy for even the smallest company to jump into Social Media, but creating a Facebook page and a LinkedIn profile is futile unless backed by a strategy that links back to company objectives.

Customer Loyalty Promotion

The study, “Digital Marketing Practices and Trends,” was conducted by the Direct Marketing Association and David Shepard Associates.

Other major conclusions of the survey include:

  • Brand building is the principal objective of digital marketers, with 71% of companies placing it atop their list of priorities.
  • Direct mail still commands the largest share of promotional spending, commanding 17% of overall marketing budget, the largest share of any media.
  • Roughly 35 percent of companies us CPM (cost per 1000 impressions) to evaluate online programs.
  • The most frequent use of digital media for publishers is generating online sales.

“Two findings come through loud and clear from this report,” says DSA’s George Orme. “First, most marketers today are using digital media to both sell and nurture a stronger bond with their customers. But the study also underscored that very few companies have mastered the analytics and found ways to accurately measure the incremental effect of each media within a multi-media campaign.”

With nearly 7 out of 8 direct-to-consumer retailers at least dabbling in social media, it’s clear that marketers should pay more attention to linking their anchor site to videos, blogs, YouTube, Facebook and Twitter. The study indicates companies will increasingly test targeted messages across various media as they try to find the most effective means of communication in the multichannel digital age.

Facebook reigns as the leading social media tool with 78% of respondents using the site. That was followed by Twitter with 69% and LinkedIn with 56%. (Parenthetically, females are almost 20% more likely to turn to Facebook than are men: 75% of women have Facebook profiles, compared with only 63% of males, according to data compiled by Lightspeed Research).