If you like me, you’ll buy my services!

I recently came across a piece of work by Gina Sverdlov of Forrester Research in a report called “The Facebook Factor”. In the report she shows how she applied statistical modeling to add real facts to this controversial marketing dilemma – is there value in having facebook fans?

At some point, we have all been caught up in the argument…do you recommend a facebook page or not? And depending on the brand, customer-base and demographic of the brand owner (age, outlook and skills with new technologies), we may have followed the wait and see cautious approach, hoping to prove with a real ROI to back our decision.

Gina appears to have provided us with an answer. She has examined a large number of factors that potentially contribute to whether a consumer will purchase, consider, or recommend a brand. She specifically analyzes Best Buy, Walmart, Coca-Cola, and Blackberry. The results are very interesting…

With all the four brands, being a Facebook fan of the brand definitely boosts purchase, consideration, and recommendation. Quote..79% of Best Buy Facebook fans bought there in the last 12 months vs. 41% of non-fans. And 74% of them recommend Best Buy vs. 38% of non-fans.

Of all the questions asked, being a Facebook fan had more influence over these behaviors than any other factor. Quote…Being a Facebook fan of Best Buy increases the odds that a customer will purchase by 5.3 times; the next closest influence factor is having researched consumer electronics, which only increases the odds of purchase by 1.4 times.

The pattern appears to repeat itself for every single behavior, with every single brand. For example, having a Walmart nearby doubles the odds that you’ll consider buying there, but being a Facebook fan of Walmart increases those odds by more than a factor of four.

So where does that leave us? Should we be setting aside large budgets to build a massive fanbase on facebook? I think not. Correlation may be an answer for the positive behaviours exhibited by the fans (ie to buy, consider or recommend) but there is not yet proof that being a fan means that person will buy, consider or recommend. Many fans fail to engage even if they like the brand. And if the fan base is created artificially, then is no basis for any purchase as there is little, if any, customer need.

What I have taken away from this is that there is value in having fans and using facebook or other social media to engage with. Fans who feel they are “known” by a brand will be more likely to to buy, consider or recommend that brand. What it does imply is that the brand facebook page will serve as a platform where fans can find engaging content and can interact with other customers and with the brand itself. In turn, they become brand ambassadors, each other happily spreading your messages. So if you are not there, another brand will be, building relationships and interacting with your customers. I think this is a wake-up call.

The allure of luxury goods

The results of the UK Luxury Benchmark survey from Ledbury Research, run in partnership with the Walpole – the UK’s luxury industry body have just been released.

Reading through the summary of findings from the report, it is very obvious that the market dynamics are changing, especially where and when the purchase is made. BRIC markets are in, and the marque of luxury appeals to a a much wider, emerging market, where the consumers are younger and mostly found online.

Following are the highlights..

UK Luxury Benchmark Report 2012

– The UK luxury goods market stood at £5.8bn by the end of 2011.
– The internet has extended the reach of luxury brands: today’s luxury consumer is new to the brand, younger, and found online.
– Tourism remains a key factor in the success of the UK luxury market, and 63% of brands have made plans to specifically target this audience.
– Though London dominates the revenues of the luxury sector in the UK, 60% of stores are based outside the capital.
– Looking abroad, British luxury brands are heavily involved in overseas operations. There is strong interest in the BRIC economies, China in particular, but other emerging regions are beginning to make their mark.
– Assessing the marketing activity of the leading brands, it is clear that focus remains on reaching these younger consumers and growing the client base.
– While 74% of British luxury brands are optimistic for the year ahead, many have expressed a level of cautiousness. This is reflected in the mixed expectations for sales in 2012.

http://www.ledburyresearch.com/walpole

Social Media as a Branding Tool

While over 90% of major brand owners are now using social media such as Twitter and Linkedin, however social media still remains primarily a marketing medium rather one that generates tangible revenues according to a recent survey by Booz & Co and Buddy Media.

From 100 large organisations, (94%) listed Facebook among their top three social priorities, closely followed by Twitter on (77%), with YouTube lagging at (42%). Blogs and branded platforms scored (25%) each, LinkedIn posted (13%) and location-based tools like Foursquare received (8%).

The average organisation typically has 4 to 5 social media sites at present, set up by Marketing departments (81%); digital teams (62%), PR units (48%) and customer service groups (26%).

The general consensus (94%) was that being an early adopters and reacting quickly was essential to social media success. They also believed in having an internal “owner” and “champion” (93%), all of which was well supported by leadership and in-house education (90%).

What are they being used for?
The main use for sites such as facebook and twitter is advertising and promotions (96%), while (88%) used them for PR; 75% maintained open links for customer service and (56%) used them for market research.

Commercially, it is still early days, although (44%) expect to have revenue-generating platforms linked to social media in two years time. Just (40%) are employing them for sales purposes, and a further 46% think they deliver purchases and meaningful leads.

By contrast, (90%) mentioned benefits tied to brand building; 88% agreed they stimulated buzz, 81% referenced securing consumer insights and 78% cited enhanced marketing effectiveness.

A majority of companies also already have dashboards, and enjoy partnerships with specialist agencies as they follow a clear, integrated social media strategy.

Similarly, while 67% of businesses allocate less than 5% of digital marketing budgets to social channels today, a 55% share believe the proportion of new media spending directed to this route will be at least 10% three years into the future.

What this shows is that large, leading companies are shifting their marketing focus to actively transform their model from brand management to brand curation.

via Booz & Co & Buddy Media as read in WARC

Leaving a lasting impression

How good is your social branding? Are you influencing enough of the right people? Are you using social media to determine your ongoing strategy?

Some 83% of companies worldwide use social media, but fewer than half of those have teams that use social media to influence proposition (service or product) design, creation, or strategy.

In a recent Forrester report, it appears that 72% of consumer product strategy (CPS) professionals claim that social media will enhance their existing capabilities of using customer input to shape product strategy. They talked about how social co-creation is an important opportunity for consumer product strategy (CPS) professionals — and it’s something that some, but not all, of those companies who are active with social media use.

In a discussion on the topic among Before and After 6 business network members, it was obvious that social branding was the topic of the day. Apart from leveling the playing field, it allowed companies to carry out a form of dialogue with clients, colleagues, friends or simply “followers”. Linkedin, Twitter and facebook topped the list of social networks in use, although there was a difference in opinion on their effectiveness within the target markets, especially for service providers such as lawyers and accountants. In fact, many saw it as an extension of their business networks and networking initiatives. Whatever their industry though, it was the undoubted decision that social media cannot be ignored from a branding perspective.

We are currently working with clients to help them navigate the social branding arena. We help them build their brand, determine their positioning and extend the brand online with relevant pages and groups targeting their markets. In this way, at least they are harnessing the phenomenal reach of this medium, even though it may still be early days for them in terms of active conversions from followers to clients.