Companies are facing tough challenges in direct marketing effectiveness. Automation technologies have caused message saturation, and marketing ROI is being compromised across multiple channels. Everyone is talking about Big Data and social influence as the new Promised Land, but finding and proving the value is difficult. So what can direct marketers do to deliver the expected sales results?
It starts with customer and prospect data, but not where you think. Marketers only looking at individual actions and keystrokes are missing out. By combining Big Data techniques with factual evidence of social influence, marketers can map meaningful relationships between people in their databases and unleash the power of the social graph of real-world relationships to influence purchase decisions and enhance brand loyalty.
Social media presence doesn’t equal influence
Identifying topic-based influencers is the best place to start. True influencers are not consumers with the largest Twitter following or the ones with 500+ Facebook friends, or even those who comment, like, repost, share, and tweet every product they purchase. In fact, social media rock stars likely don’t have any influence over their 500 so-called friends. Social media activity doesn’t mean anyone actually listens, and it certainly doesn’t prove they are driving others to act or buy.
Social can drive sales when the approach relies on the power of real-world connections and purchase influence rather than stopping at online friendships. Put simply: People buy what their friends buy. Meaningful relationships with the power to turn prospects into customers and inactive customers into buyers are rooted in offline connections, not online interactions. Real-world relationships tend to involve more in-depth interactions, a heightened level of trust and intense similarities—from current interests, hobbies, and activities to salaries, education level, stage of life, etc. Combined, these factors make real-world relationships much more influential than online social circles when it comes to people’s buying decisions.
For example, we’ve found that the higher the price of a product, the higher the influence prospects or customers can have on their social circle. For instance, if one of your prospect’s influential friends purchases a high-end TV, his social circle is five times more likely to purchase that same TV within an eight-week window. Buyers typically try to justify their big, new purchase by actively advocating (think during a dinner party or while watching Monday Night Football with friends) its benefits.
Influence is topical
Purchase influence is topical. For instance, there may be one person to whom someone turns for advice on a new laptop purchase and another on everything fashion related. There is no magic bullet of influence across all product categories.
Identifying people with topic-based influence helps marketers better reach potential buyers who are more likely to act because their friends have already done so. Tapping a social graph that maps out powerful, real-word relationships based on concrete bonds (e.g. family, coworkers, college roommates, neighbors, teammates) lets marketers get more from existing prospect and customer data.
Unlocking potential
By knowing who in your database tends to create a domino effect of purchasing activity based on past transactional history and sales data, marketers can better determine the right audience, channel, and offer to reach and convert prospects. Thanks to advances in Big Data and analytics, marketers can now pinpoint and target purchase influencers—reaping the rewards of socializing data to drive sales. Two key examples for direct marketers are email marketing and direct mail campaigns such as seasonal catalog.
Let’s face it: Many companies have spent the past few years spamming their prospects and customers with ineffective email campaigns. The power of the in-house list is quickly disappearing as consumers either opt out or simply ignore the vast majority of promotional emails in their inbox. By discovering who in your database can most likely drive sales and targeting them with special incentives, you can not only create better brand engagement and loyalty but also drive significant sales increases. Sony, for example, increased its response rate 300% by taking this approach.
Also, while many industries still rely on direct mail campaigns to reach and engage consumers, the sales return doesn’t always justify the cost to design, produce, and mail pieces like catalogs.
Most consumers receive beautifully designed catalogs regularly, and while they may flip through the pages or leave them on their counter for a few weeks before tossing them into the recycling bin, the catalogs may not lead to purchases. And neither do the friends of these consumers. If retailers took the time to target only those prospects and customers with proven purchase influence, their sales would increase and they would be able to redirect the saved resources and budget to other marketing initiatives—further adding to the potential sales and ROI.
Ultimately, it simply makes sense to connect the dots of real-world relationships with sales and transactional data. Combining the power of Big Data with the value of the social graph, marketers are realizing a two- to five-time boost in ROI. It’s the next logical step in an ongoing evolution, and it’s already changing the game in acquisition, cross-sell, and retention across a variety of industries. Are you in the game?
Ran Shaul is founder and chief client officer of Pursway
