Customer loyalty gets most marketing dollars in social media: study

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Marketers are spending nearly twice as much to deepen customer loyalty as they do on other core social media marketing programs, according to a report by the Direct Marketing Association and Colloquy, a loyalty marketing organization.

The study, released August 27, says the average social media spend for marketers whose primary goal is to obtain customer loyalty is $88,000, compared to $53,000 for brand awareness and $30,000 for customer acquisition.

The research indicated that social media budgets for loyalty programs have experienced the highest growth over the last three years.

“It's still important to use all of the [traditional] loyalty principles, but with new techniques,” said Yoram Wurmser, DMA research manager.

However, the report indicated that marketers are spending a low amount of money on social media in general. The organizations found that 17% of respondents allocated 1% of their annual budget to social media, while 16% said they allocated 4% to 5%.

Wurmser said he was surprised to learn that two-thirds of survey respondents do not know what methods have been most effective in their social media programs. He also pointed out that 65% of companies don't use a listening tool to track online conversations.

“I would think that more companies would want to monitor what is being said about them online,” he said. “Seeing the impact of your campaigns to justify the expenditure for marketing is critical.”

Wurmser said that the biggest challenge he sees for marketers is making themselves a part of consumers' conversations, as much as they need to dictate them.

“Marketers must integrate themselves into the conversations,” he said.

The survey was conducted between late June and early July to both DMA's membership and Colloquy's subscribers. Results were based on 369 respondents who handle social media spending.

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