As a direct marketer by inclination and a 1to1 marketing consultant increasingly involved with social media, I have a growing sense of unease.
This concern stems from a growing belief that the ‘new’ generation of marketers, those enamoured of social media, are ignoring a key lesson of the last 20 years of relationship marketing… The critical marketing asset for a company is the customer relationship and relationships are rarely anonymous.
In the early 1990’s Fred Reichheld kicked this thinking off when he found that the most profitable companies have;
- the most loyal customers
- the most loyal employees
- the most loyal shareholders.
His explanation; long term employees remember customers’ needs and serve them better. Long term shareholders give management the time it takes to build customer relationships.
Peppers and Rogers took this simple idea (that customers who keep buying longer make you more money) and pointed out that positive relationships make this more likely. And that relationships require that both parties know each other. Their implementation methodology started with the requirement that you know the identity of your customers, that you do not yell at strangers any more.
Knowing the identity of your customers across transactions lets you watch their behaviour and match your products and services to the needs of some or all of them. Building relationships, 1to1.
How different is this from the average social media marketing plan?
Seems to me that most social media marketers use twitter, facebook, YouTube, MySpace and other social networks as, well, media. Just like TV, radio and billboards, a way to broadcast undifferentiated messages dressed up in Cluetrain rhetoric. You may know their screen name but you do not know what business they do with you, if any. Little attempt is made to ensure marketing relevance – which is different from being authentic and having ‘real conversations’ – which we should also do of course.
Even that most popular of social media strategies; the Influencer / Advocate programs most often seem to be an attempt to replace the 30 second prime time spot. Select your (self reported) opinion leader, get them to promote your widget today and gizmo tomorrow. Just like buying media time.
Now we have nothing against broadcast marketing, it may be the most reliable way to ’seed’ message cascades according to Duncan Watts. But I feel it would be good if we dropped the pretense that a facebook page is somehow different from other above the line activities. Or a twitter account.
There is a convergent approach that we think will grow in popularity – the integration of social media and CRM through online communities of registered (i.e. identified) customers. In these communities, because you know who the customers are you can ‘look inside their shopping baskets’ to work out who and what will engage them and encourage them to loyalty and increased mutual value.
In this ‘hub and spoke’ model, anonymous (in the sense that we cannot identify their commercial transactions with us) social sites like facebook become recruiting ‘billboards’ to invite customers to join your branded community if they are inclined to be served more personally by an engaged supplier.
The opportunity in this strategy is richer customer insight that includes customer attitudes and opinions along with transaction behaviour.
Reichheld says it well; if your marketing segmentation does not explain the difference between your advocates and your detractors, it is not useful in this new social media world. Useful segments will come from the intersection of customer CRM systems with customer conversations.
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