About Lance Neuhauser

Twitter

A recent study published by Chadwick Martin Bailey revealed that 64% of people who follow brands are also customers of those brands. This data point has created quite the buzz. It’s been shared, tweeted, and used as ammunition by social brand managers to justify more social spending and Twitter activity.

First and foremost, I am not anti brands upping their social ante.

I am, however, fearful of brands looking at the wrong data points to make decisions, resulting in a less than stellar bottom line impact, causing a backlash on a brand’s willingness to invest further in social activities.

Let’s really take a look at the stat above.

64% of people who follow brands on Twitter are customers…

What does this tell us?

1. 36% of brand followers are not customers
2. 36% of brand followers, while never having made a purchase, have gone out of their way to engage with the brand, to listen to the brand and be made aware of special brand offers.
3. The brand has not yet figured out how to convert a Twitter following directly into sales with a whopping 36% of its Twitter base!

If I’m the brand…

The 36% who are not customers would be the interesting stat, the point of future focus, and the impetus for new social investment.

I would then begin asking myself:

• How do I learn which of my followers are or are not customers?
• How do I learn the habits and preferences of my followers?
• How do use what I learn to alter my Twitter content strategy and drive more purchase intent?
• How can I better entice my followers to visit my website?
• How can I use what I know about my followers to create dynamic and personalized experiences on my site?
• How do I ultimately ensure everyone who ends up following me turns into a customer?

Now, I recognize the number of followers who are not customers should not make its way down to 0% (love me a double negative!). If it made its way to zero, it would mean the brand stopped using Twitter effectively as an initial engagement channel.

If used properly, there should always be potential customers for whom Twitter is their initial engagement point with a brand. And, therefore, an effective outreach strategy would also mean brands have their conversion tactics ready when potential customers come knocking.

I also recognize that Twitter is not (today) meant to be a direct marketing channel. It is mainly used for brand awareness, re-engagement, retention and any other upper-funnel term you want to use.

But c’mon marketers! Investment in the upper funnel is done with the intention of eventually moving folks down through the bottom of the funnel!

It’s time for brands to really develop a mechanism by which they connect brand-building social activity to revenue. For now, this mechanism can be nothing more than a measurement system, because inherently we know social activity will move potential customers in the right direction and a system that shows this correlation would be a step in the right direction. However, to be a truly effective social brand marketer you need more than just measurement correlation…you need a system for sales causation.

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According to The Detroit Free Press, the average price of a new car purchased in 2010 in the US was $29,217.

That said, I’m fairly certain you can’t buy a brand new Lamborghini for just under $30K. And, if you paid $30,000 for a Hyundai Accent, you were carjacked.

Given this information, it’s highly unlikely that Lamborghini and Hyundai use a blanket $30,000 purchase price to determine sales forecasts and their respective target markets. I’d even go so far to say that you would likely approach a potential Hyundai Accent customer differently than a potential Lamborghini customer.

Bold, I know…

Let’s play with one more.

According to the US Census Bureau, the 2006 adjusted Household income was ~$50,000/yr. However, the top 6.37% of the population account for roughly 1/3 of all US income. This means that the top 6.37% make roughly $360,000/yr. and the remaining 93.63% ~$35,000/yr.

That’s an awfully large skew with monstrous impact on purchasing power.

Now, I’m no marketing genius, but I’d imagine its skews like this that would help Hyundai and Lamborghini determine which folks to target with their respective marketing resources.

So then riddle me this readers…

Why on earth are we using and attracted to such archaic and misleading blanket data points for our social efforts?

$4.00 is the average value of a fan?!

$2.10 is the average value of a share?!

Are you kidding me?

If you believe this type of data is useful, I have a Hyundai Accent to sell you for $30,000.

First off, category-to-category, brand-to-brand, PERSON-to-PERSON patterns and values differ.

Social marketing is supposed to allow us to capitalize on personalized communication and individual solutions.

Think back to ’99 when it was about Display CPM’s, ’05, about Search CPC’s and now ’11, Friend/Follower CPF’s.

Now think about where the data stands in ’11 for search and display.

We have…performance, brand impact and engagement lift metrics…emergence of dynamic creative platforms, landing page testing and yield optimization.

We tie this data together using our web analytics, which allows for overlays like referral traffic, path analysis and audience comp that, in turn, can be used for better acquisition planning and on-site product position optimization.

Layer in the individualized first party CRM data and we have the reason why digital has come into its own!

Yet, somehow, we’ve reverted back to fan totals and impressions for our social planning, and we’re constantly being distracted by the latest shiny-blinking marketing toy.

We’re fascinated by the likes of broad social indexing technologies, which help us see that Lady Gaga and Justin Bieber are influential. If I am Crate and Barrel or Nordstrom that data really isn’t all that helpful. I would need to know who my ‘Lady Gaga’ is (also potentially known as Doris from Kansas City) and how she impacts my bottom line.

We are also seeing third party social sharing tools trade you technology usage and top-level audience data for data ownership. This merely perpetuates a data gap and reliance on directional information at best.

There’s no doubt our industry is evolving.

We are attempting to sort out the actionable insights wheat from the dangerous data chaff.

We are beginning to see the emergence of basic social segmentation technology to deal with the drastic participation inequality that exists amongst a user base.

However, because we are still figuring out how to perfect the art of social communication, we are confused and, in the process, forgetting all we’ve learned.

If we are going to deliver on the promise of social, we need not flock to technology that only takes us as deep as surface level.

What we need is more comprehensive-but-actionable analytics and even loftier user segmentation.

Let me ask you this…are any of you marketing to your email database using industry level data or average consumer statistics? Are any of you giving away the rights to your email database only to get a free tool that allows you to see blanket open rates

Doubtful.

Then let’s remember 3 things as we move forward:

1. Don’t accept missing data.
2. Personalized experiences are key and, thus, measurement systems must be able to track actual personal experiences.
3. Deploy with a purpose. Don’t chase Fans and Followers unless you know the value you get from these folks—like page views, registrations and sales!

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