The Australian - The Deal - - Extra - An­drew Bax­ter is the chief ex­ec­u­tive of Ogilvy Aus­tralia. Fol­low him on Twit­ter: @an­drew­bax­ter3.


CLAM­OURED to jump on the so­cial me­dia ex­press in the past five years. But now some are ques­tion­ing the sales and profit re­sults re­lated to so­cial me­dia. Has the in­vest­ment been worth the re­al­lo­ca­tion of their mar­ket­ing bud­get from other ve­hi­cles?

Like the word “dig­i­tal”, “so­cial me­dia” has be­come a catch-all phrase for many com­mu­ni­ca­tion tac­tics in the “so­cial space”. There’s so­cial ad­ver­tis­ing, so­cial cus­tomer re­la­tion­ship man­age­ment and so­cial lis­ten­ing, and you can drive loy­alty through so­cial, en­cour­age cus­tomer en­gage­ment through so­cial, ser­vice cus­tomers through so­cial, do re­search through so­cial, run pro­mo­tions through so­cial and drive word of mouth through so­cial. But which of th­ese, if any, can de­liver a re­turn on in­vest­ment for your brand? And should mar­keters be look­ing for a short-term or long-term re­turn?

There are cer­tainly a limited num­ber of ex­am­ples of so­cial me­dia lead­ing to an im­me­di­ate sales re­sult. Retailers in Aus­tralia, for ex­am­ple, have re­lied on tele­vi­sion, press and mail cat­a­logues to reach more than a mil­lion cus­tomers at a time and quickly cre­ate aware­ness of a new prod­uct and where and when it is avail­able. So if you take that model in its sim­plest form, a re­tailer would need close to a mil­lion fol­low­ers and “likes” on so­cial me­dia to repli­cate that kind of reach.

How­ever, as of Fe­bru­ary this year, only 12 con­sumer brands in Aus­tralia had more than 500,000 likes and/or fol­low­ers on Face­book and Twit­ter. Very few brands have de­vel­oped their own mass­mar­ket so­cial ad­ver­tis­ing chan­nels as yet.

One Aus­tralian brand that has done so is KFC, which has 700,000 Face­book likes. In the mid­dle of 2012, it re­vived a prod­uct called The Dou­ble for just two days and com­mu­ni­cated this to Face­book fans only. The next day queues that ex­tended out the door were re­ported at some stores, as fans and friends lined up to buy the bread­less burger.

Other lo­cal brands are us­ing so­cial me­dia to boost loy­alty and cus­tomer en­gage­ment, and they are find­ing this de­liv­ers a strong long-term re­turn on in­vest­ment. Bank of Melbourne cus­tomers who have en­gaged and in­ter­acted with the brand on so­cial me­dia do 40 per cent more busi­ness with the bank than those that have not.

Of­fice­works cus­tomers who are en­gaged with the brand through so­cial me­dia con­vert to sale at a rate more than 60 per cent higher than those that don’t. They might not all buy im­me­di­ately af­ter see­ing an ad on Face­book, but they are brand ad­vo­cates and long-term spenders, both on­line and in stores.

Re­turn on in­vest­ment should not be mea­sured only through top-line growth. Driv­ing cost ef­fi­cien­cies through so­cial me­dia is a per­fect way to ob­tain a bet­ter bot­tom-line re­turn. One great ex­am­ple is where brands have “so­cialised” their call cen­tres.

Com­pa­nies trust their call-cen­tre teams to an­swer ques­tions and com­plaints via the phone, so why not trust themto do the same via so­cial me­dia? And once a ques­tion is an­swered on so­cial me­dia, the ex­change ex­ists for oth­ers to search. So in­stead of 100 cus­tomers ring­ing with the same ques­tion and the call cen­tre hav­ing to an­swer it 100 times, it can be an­swered just the once. In some cases, this has al­lowed call cen­tres to cut staff by a third and save mil­lions of dollars.

So­cial­is­ing call cen­tres can also drive top-line growth through bet­ter ser­vice, en­gage­ment and ad­vo­cacy. Be­cause the call-cen­tre teams can lis­ten to con­ver­sa­tions and com­plaints in real time via so­cial me­dia, they can also im­me­di­ately re­spond to that cus­tomer. Qan­tas was one of the first Aus­tralian com­pa­nies to do this. For ex­am­ple, when a dis­grun­tled Qan­tas cus­tomer tweets that their plane has been de­layed, the call cen­tre quickly sends a re­ply to that tweet. The teamem­pathises with the cus­tomer’s frus­tra­tion and asks them to send their mo­bile num­ber via Twit­ter, so Qan­tas can try to help. In do­ing so, the air­line turns a neg­a­tive en­coun­ter­with the brand into a pos­i­tive one. And as men­tioned ear­lier, brands that en­gage well with cus­tomers via so­cial me­dia are rewarded with long-term in­creases in spend­ing.

Win­ning that trust max­imises life-time cus­tomer value. So while “so­cial” has been a buz­zword in busi­ness for the past few years, there are signs it can de­liver a re­turn on in­vest­ment in the short and long terms.

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