Social Media Spending and Impact
Using social media to acquire new customers may not be as effective as using it to build the relationship you have with your current customers. A recent study by the Direct Marketing Association and Colloquy entitled “Deploying Social Media to Cultivate Customer Loyalty: A Benchmarking Study” found that marketers found brand awareness and customer loyalty as the most effective goals for social media ahead of customer acquisition (ranked first by only 19% of respondents).
The survey also analyzed how much marketers are spending to acheive these goals. The findings?
- Spending on social media has increased from $17,000 in 2008 to $171,000 in 2010.
- In that time, spending on customer loyalty as a portion of the total spend has jumped dramatically, from $6,000 to $88,000, whereas the growth in spending on customer acquisition has been much slower, going from $5,000 in 2008 to $30,000 in 2010.
Social media marketing is still a relatively new channel for most companies, but in just a few short years, spending has grown dramatically and marketers are adjusting their budgets in accordance with the results they are seeing. In this case, social marketing is proving a more valuable tool for strengthening customers loyalty than for acquiring new customers. What does this mean for you as a marketer? Make sure the expectations you have set for your social media marketing strategy are realistic given your budget, and consider whether social media marketing is the right vehicle if customer acquisition is your main objective.