Which is the Best Marketing Strategy for Your Business?

Is Social Media Marketing Direct Marketing 2.0?

To the naked eye, the last decade has been a tsunami of companies jumping on the social media bandwagon, with everything from dog collar designers to dental offices having a “like us” or “share” button on their websites, directing customers to their Facebook, Twitter, or other social media pages and accounts.  Marketing gurus touted (and still tout) social media as the future of marketing[i].  And, in an effort not to be left out of the wave, companies of all sizes and across all industries began strategizing about how to use social media as a marketing tool – many convinced that this would eventually replace traditional or direct marketing (DM) altogether.

For many companies, reading about the exponential growth of Fast Company darlings like Facebook and YouTube doused gasoline on the raging fire of buzz for social media marketing (SM).   It almost seemed too good to be true – to build intimate customer relations, not through “hard sell” tactics, but by leveraging social networkers as brand/product ambassadors.  The lure of reaching millions of eager customers through a medium that was highly personalized yet ubiquitous, required an inconsequential start-up investment (the time required to set up a Facebook page, for example), and that could (if one was lucky) reach consumers in every corner of the globe – even if you only had a small storefront operation in a quiet corner of town – was irresistible.  Unfortunately, the “fine print” on SM hadn’t been as widely disseminated.

Throwing Out the Baby with the Bathwater

SM is about establishing and maintaining relationships[ii] with customers, and in this way it is very similar to direct marketing (DM).  But SM has some distinct shortcomings.  For one thing, it requires an existing involvement with social network communities[iii].  A good analogy might be that of fishing.  Using a DM strategy you would start with a wide net – everyone in a large demographic (every woman over fifty in North America, for example) – and then refine it to a more precise location where you know you can find your target customer (every woman in North America over fifty who buys hair care within a certain price point, for example).  But with a SM campaign, while you’re still fishing for customers and casting a net, since the net is fixed in a very specific sphere – the internet – and within that sphere, a distinct location (your Twitter account, for example), the fish (customers) have to meet certain criteria (that may have little relevance to your product/service) to encounter it: a) be active internet users (not a given), and b) be either aware of your company/product or be looking for it (again, not a given).  In other words, the fish have to swim up to and jump into your net, or they’ll miss it.  The difference can be boiled down to two distinctly different approaches: DM goes to the customer, SM requires the customer to come to it.   And while marketers may be eager to abandon offline media, it would be worthwhile to consider whether or not their expectations will actually match the reality of adopting an exclusively online marketing strategy.

Perception Falls Far Short of Reality

In an attempt to determine if Facebook (FB) is still an effective marketing tool, AllFacebook.com joined forces with EdgeRankChecker to review and analyze 4,000 FB pages.  They found that the average FB page post reaches only 17% of the page’s fans.  So, of those people who not only visit a company’s FB page but “like it” only one in six will see your posts. [iv] They also reported a “significant decrease in post ‘impressions’ since June 2011”, meaning that, 1) either FB marketers are reaching fewer people; or, 2) people are seeing their posts fewer times on average.

According to Socialmediatoday.com, one of the major reasons SM fails to live up to expectations, is that the expectations themselves are unrealistic.  The values by which return on investment (ROI) is measured are not identical between DM and SM.  The indirect nature of the SM campaign, the long-term and winding road of building an online community, makes SM ROI by definition more difficult to measure[v].  Even if your campaign goes viral, 7,000 fans do not equal 7,000 conversions.  And the “social” in SM means that marketers lose control of the message to those sharing it and their comments about it.

Misperception plays a great part in the gap between expectation and reality, with businesses being spoon-fed a mantra that SM is easy and anyone can do it (and profit from it) without expending a lot of time or energy[vi].  Another misperception is that if your company does interesting/helpful/useful/etc. things, that connecting with and engaging customers will sort of “occur” of its own accord.  Research suggests the contrary.  Studies show that business owners need to commit no less than six hours per week to social media in order to see a ”positive impact”.   For small businesses or private practitioners, this is a substantial time investment that may be effectively prohibitive. FB was originally created to connect people, not products, and this may account for the declining interest (also known as “Facebook Fatigue”) in engaging with companies hoping to mix business with pleasure.[vii]

An Elegant Solution: Direct Marketing for Niche Markets

According to the most recent US Census (2010), seniors (people age 65 and >) are the fastest growing generational segment of the population, growing at a rate of 15.1% since 2000, compared to 9.7% for the total U.S. the population.[viii] These numbers suggest that the outmoded trend of relegating seniors to the margins of a company’s marketing plan needs to be replaced with a multi-generational campaign based on thorough and considered data analysis of this group.   Years of insufficient market research for this group will make finding robust and suitable data for them a bit of an uphill battle (in academic circles the very definition of “senior” itself is still highly contested[ix]).  But unless the trend of expanding lifespans[x] suddenly reverses, failing to capture this group will become the “blind spot” of any business’ marketing plan.

In their book, No B.S. Guide to Marketing to Leading-Edge Boomers and Seniors, authors and marketing experts Dan S. Kennedy and Chip Kessler discuss the best practices for marketing to seniors, stressing that if marketers are to successfully reach this increasingly politically and economically potent segment of the population, they need to market based on their preferences for receiving information and their engagement behavior rather than attempt to apply a “one size fits all” strategy to reach them.

In 2011, a multi-million dollar financial services provider commissioned an independent study to determine how modestly affluent to very affluent boomers and senior clients are engaged (a sage move given that US Census data reveals that affluent households are the fastest growing segment of the population).  The results illuminated valuable senior consumer insights for industries interesting in capitalizing on this market.  The largest percentage of those engaged (34%) report they were engaged through word of mouth recommendations from family, friends and colleagues, which Kennedy and Kessler suggest is indicative of the value of incentivizing customer satisfaction (via welcome gift packages, newsletters, special reports, client appreciation events, formal referral rewards programs, and seasonal gifting, for example ) for existing financial services customers, as they lead the way in generating new business within their peer group.

Thirty-three percent of senior/boomers were engaged through offline media advertising and direct mail marketing (i.e., educational seminars and workshops), which reinforces the theme of DM as the optimal vehicle for senior/boomer engagement, promotion, and retention.  Fifteen percent were engaged through non-event-related media exposure, via TV, radio and print advertising.  Of those surveyed, not one was engaged by online media or SM, a clear signal that this demographic can be engaged and then, in turn, become brand ambassadors within their social sphere, if they are engaged through the appropriate channels.  The backstory on the progressive statistics for seniors and internet use[xi] reveals that while the number of seniors online has increased in the past decade, the majority do so to stay in contact with others (email), and that they are averse to using it to find services or professional assistance, and especially disdainful of having their information harvested for online marketing campaigns (Source: ProMarketing Sales Lead Lists).

Cognizant of the inextricable role the internet plays in modern life and enterprise, the authors concede that an online presence is essential to creating brand legitimacy, but also point to the study as a reaffirmation of the fundamental credo of effective marketing: if you want to reach your audience, you have to speak to them in their own language.  A sentiment nicely expressed by bestselling author and marketing guru, Seth Godin, “One option is to struggle to be heard whenever you’re in the room. Another is to be the sort of person who is missed when you’re not.  The first involves making noise.  The second involves making a difference.”

Making a Difference, Instead of a Noise

The study on senior/boomer consumers is instructive for other consumer segments, as well as for any industry that doesn’t want their marketing campaign to be classified as “white noise”.  For the healthcare industry[xii], consumer insights across all age segments continuously support a DM strategy as the strategy of choice.  According to the 2011 Healthcare Leaders Industry Survey, only 4% of healthcare leaders reported social media as “very effective”.  The detractions to using SM for healthcare services were consistently in line with other industries which provide services that incorporate personalized and highly sensitive information, revealing that from Millennials to Centenarians, consumers prefer “more traditional approaches”.

According to the Bureau of Economic Analysis (BEA)[xiii], the services sector, which comprises 70% of the economy, grew 3.7%, making it the leader in GDP growth (from 2003 – 2005).  And while the U.S. trails countries like China in manufacturing, we lead in service industries such as finance, real estate and health care.  For service industries looking to revitalize their DM campaigns, companies like ProMarketing Leads can be instrumental in creating a diversified and customer-centric approach that produces results.  ProMarketing Leads gives healthcare and other service providers the tools they need to engage consumers, through providing targeted lists tailored for optimal customer engagement.

The “Hot Lead” Advantage

The convention, in lead generation, is to generate direct mailing lists that encompass everyone within a given range (e.g., city, age, etc.), a strategy a bit analogous to playing a “numbers game” and about as effective.  For a leading healthcare supplement producer, ProMarketing used exhaustive transactional data, demographics, and competitor customer data to create a robust DM campaign.  The lists produced for this client went beyond typical supplement consumers, to include those who had not only purchased supplements from competitors, but also those who had been most responsive to being engaged through DM (including which channels they responded to most favorably).  The difference was tangible, with the company doubling their business shortly after using the business mailing lists provided by ProMarketing.

ProMarketing calls this the “hot lead”, an active and engaged customer, who not only fits the target demographic, but is most likely to engage through traditional marketing, or, to disengage if approached through social marketing channels (Source: Telemarketing List by ProMarketing Leads).  They have found that clients in a range of service sectors, such as financial services, car dealerships, tourism, healthcare placement services, and others, have seen marked improvements in their ROI, when given the proper tools to engage their desired customers.  DM requires less time and therefore less money to produce customer engagement than SM, thereby enabling companies to get more value while spending less in advertising dollars.  In the words of one marketing insider, “In the end, you still have to choose where it makes sense to invest more of your marketing dollars.”   For companies in the service sector, DM has been and remains the solid choice for exercising your advertising dollars.

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[i] http://www.toprankblog.com/2008/04/direct-marketing-social-marketing/

[ii] : http://techlunatic.com/2011/06/direct-mail-versus-social-media-marketing/

[iii] http://techlunatic.com/2011/06/direct-mail-versus-social-media-marketing/

[iv] http://socialmediatoday.com/jcsocialmarketing/452958/facebook-still-effective-marketing-tool and http://allfacebook.com/facebook-page-17_b73948#idc-cover

[v] http://techlunatic.com/2011/06/direct-mail-versus-social-media-marketing/

[vi] http://socialmediatoday.com/jcsocialmarketing/452958/facebook-still-effective-marketing-tool

[vii] http://socialmediatoday.com/jcsocialmarketing/452958/facebook-still-effective-marketing-tool

[viii] http://www.census.gov/prod/cen2010/briefs/c2010br-09.pdf

[ix] http://www.marketing-trends-congress.com/content/who-senior-consumer (dead link)

[x] http://www.reuters.com/article/2012/12/11/us-usa-health-rankings-idUSBRE8BA1D220121211

[xi] http://www.pewinternet.org/Reports/2012/Older-adults-and-internet-use.aspx

[xii] http://www.healthleadersmedia.com/page-4/MAR-266053/Is-Social-Media-an-Effective-Healthcare-Marketing-Tool

[xiii] http://www.bea.gov/bea/newsrel/gdpindnewsrelease.htm