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Engaged Social Followers Are Your Best Customers

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Engaged Social Followers Are Your Best Customers

Engaged Social Followers Are Your Best Customers
How Marketers Can Leverage Social Tools Throughout The Customer Life Cycle

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    Engaged Social Followers Are Your Best Customers Engaged Social Followers Are Your Best Customers Document Transcript

    • A Forrester Consulting Thought Leadership Paper Commissioned By Wildfire (A Division Of Google) September 2013 Engaged Social Followers Are Your Best Customers How Marketers Can Leverage Social Tools Throughout The Customer Life Cycle
    • Table Of Contents Executive Summary ...........................................................................................1 Your Audience Turns To Social Media Throughout The Customer Life Cycle.....................................................................................................................2 People Who Engage With Brands In Social Media Are Better Customers.4 Key Recommendations .....................................................................................7 Appendix A: Methodology ................................................................................8 Appendix B: Endnotes.......................................................................................8 ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. © 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester® , Technographics® , Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to www.forrester.com. [1-M81U52]
    • 1 Executive Summary Nearly every online consumer now uses social media, and nearly every marketer has followed its audience into social channels. More than 85% of US online users engage with social media on a regular basis. Likewise, more than 90% of online marketers say they’re already using social tools to reach these social audiences. 1 In May 2013, Wildfire, a division of Google, commissioned Forrester Consulting to more closely evaluate how people use social tools to discover, explore, buy from, and engage with five category-leading brands and companies — and how valuable those socially engaged customers are to companies. Then to further explore this trend, Forrester developed a hypothesis that tested the assertion that customers primarily use social media to engage with the brands they already know, and that these socially engaged audiences are among companies’ most loyal customers. In conducting an online survey of 1,811 US social networking users, Forrester found that people actually turn to social channels and tools throughout their customer life cycle — and that people who engage with a brand in social media are more likely to prefer and buy from that company and recommend its products to others. 2 KEY FINDINGS Forrester’s study yielded three key findings: › People turn to social media throughout the customer life cycle. Our survey shows that customers do indeed use social media primarily to engage with brands after they’ve made a purchase — but they also use social tools at every other stage of their customer life cycle. For instance, social ads and word of mouth create awareness and discovery. Prospects also turn to social networks and peer reviews when they’re exploring and considering a company’s products and services. › People who frequently engage with companies in social are better customers. When we modeled the relationship between customers’ social media engagement with companies and their value to those companies, we found that social media engagement has a strong positive correlation with people’s preference for a brand, their likelihood to have purchased from that brand, and their willingness to recommend that brand. And the more frequently people engage with companies in social media, the more valuable they are likely to be as customers. › Companies must see social tools as part of a larger puzzle. To get the most value from social tactics, marketers must fit those tools into the larger context of their customer’s journey and their own marketing programs. Mapping each social tool to the stage of the customer life cycle where customers use it will let marketers better support those customers. And considering which nonsocial touchpoints customers are using alongside each social tool will help companies design better-integrated marketing programs. People who engage brands in social media are significantly more likely to buy from and recommend those brands.
    • 2 Your Audience Turns To Social Media Throughout The Customer Life Cycle The growth of digital media has changed how both consumers and business buyers interact with companies. Today, most people don’t simply move through a traditional sales funnel that starts with awareness and ends with purchase. Instead, your customers and prospects most commonly follow a circular four-stage customer life cycle in which they: 1) discover your company and the products and services you sell; 2) explore whether your offerings are right for them; 3) buy your products and services; and 4) engage with you, and with their friends and peers, after their purchase (see Figure 1). And while you may consider social media primarily a tool for creating engagement, our survey shows that your audience turns to social tools throughout the customer life cycle: › Social advertising and word of mouth create discovery. Marketers commonly turn to reach tactics such as TV advertising and in-store promotions to drive awareness of their latest offerings — and consumers report that these channels remain an important part of how they discover products and services. 3 But social tactics can also play a key role in helping marketers create discovery. In fact, people who engage with brands on social networks say that paid social ads are the most common way they find out about new products and services online (see Figure 2). Likewise, both online and offline word of mouth play a leading role in driving awareness of new brands and offerings. › Social networks and consumer reviews support exploration and buying. When people seek out greater depth of information about the products and services they’re exploring, they most commonly head online — especially to search engines. But once again, social plays an important role at this stage of the customer life cycle. More than one-third of people who engage with brands on social networks say they typically turn to those social networks when they’re researching products or services (see Figure 3). Detailed reviews from other consumers — on retailer sites, manufacturer sites, and consumer review sites — also play an important role when people are exploring your offerings and making purchases. In fact, one recent survey showed that 43% of all online users prefer to buy products or services from websites that allow customers to post ratings and reviews. 4 › Branded social networking pages foster engagement. People have many options for staying up-to-date with their favorite brands and companies — including signing up to receive email and postal mail, as well as visiting those brands’ websites and retail stores (see Figure 4). But over one-third of people who engage with brands on social networks say the reason they do so is to stay in touch with the company or brand. And while many of those customers are looking for special offers or discounts, four in 10 say they also visit branded social networking pages to hear about companies’ latest products and offerings. Customers also report that branded communities and blogs play a role in how they engage after the point of purchase. FIGURE 1 Most Buyers Follow A Four-Stage Customer Life Cycle Source: “Win The Social Marketing Measurement Game,” Forrester Research, Inc., November 21, 2012
    • 3 FIGURE 2 Social Ads And Word Of Mouth Play A Leading Role In Driving Discovery Base: 1,684 social networkers who do engage with brands on social media (select responses shown) Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013 FIGURE 3 Social Networks And Consumer Reviews Are Vital When People Explore And Buy Base: 1,684 social networkers who do engage with brands in social media (select responses shown) Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013 FIGURE 4 People Turn To Branded Social Networking Pages To Engage Their Favorite Brands Base: 1,684 social networkers who do engage with brands in social media (select responses shown) Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013
    • 4 People Who Engage With Brands In Social Media Are Better Customers Not only does your audience use social tools throughout their customer life cycle, but the people who engage with you in social media are likely to be among your very best customers. In fact, a recent survey of 1,811 US social networkers shows that social media engagement positively affects the likelihood of several key brand events, including purchase, recommendation, and brand preference. 5 For our analysis, we used logistic regression modeling to quantify the relationship between a social media engagement and the quality of a customer. (This study focused on five leading brands from a range of product categories, including several Wildfire clients, who boast enough social media fans to provide a usable survey sample.) These models assess the impact that drivers like engaging with a brand in social media have on such metrics as making a purchase from, recommending, and preferring that brand. By specifying characteristics of an individual or target, a logistic regression model predicts the probability of occurrence of an event. In other words, with everything else being equal, this analysis shows the influence of one variable on other variables — and found that social engagement with brands has a strong positive influence on other key behaviors throughout the customer life cycle: › Social media brand engagers are more likely to purchase from the brands they engage with. For all five brands in our study, individuals with a social media engagement with the brand have a higher probability of having made a past purchase. 6 For example, an individual who engages in social media with one large entertainment brand we studied has a 54% probability of having made a brand-related purchase in a 12-month period, compared with a 24% probability of an individual who does not engage that brand in social media (see Figure 5). Similarly, someone who engages in social media with one leading consumer electronics brand we studied has a 51% probability of having purchased their products in the past year, compared with a 26% probability of an individual who does not engage with that brand in social media. › People who engage with brands in social media are also more likely to prefer those brands. Across the five brands we studied, people who engaged with the brands in social media have higher probability of preferring the brand compared with nonsocial media brand engagers. For instance, someone who engages in social media with one quick-serve restaurant chain we studied has a 71% probability of preferring it over similar restaurants, compared with a 47% probability of an individual who does not engage with that chain in social media (see Figure 6). Likewise, an individual who engages in social media with a consumer packaged goods (CPG) organization in our study has a 65% probability of preferring it over similar brands, compared with a 48% probability of an individual who does not engage with that CPG in social media. FIGURE 5 Purchasing Is The Largest Social Factor For Some Brands Base: 1,811 social networkers Note: Social media engager refers to individuals who engage with the brand on one of five large social networks Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013
    • 5 › Social users are more likely to recommend the brands with which they engage. Individuals who engaged with the five brands in our study also had a higher probability of recommending those brands to others. For example, someone who engages in social media with one national retailer in our study has an 82% probability of recommending the retailer to friends, compared with a 65% probability of an individual who does not engage with the brand in social media. And an individual who engages in social media with the entertainment brand we studied has an 81% probability of recommending the brand to others, compared with a 60% probability of someone who doesn’t. › The more someone interacts with a brand in social media, the higher their likely value to the brand. Our surveys show that people who engage with a company every day in social media are likely to make twice as many purchases from that company as those who engage only monthly (see Figure 7).Brand perception and likelihood to recommend are also typically stronger among people who engage with brands in social media more frequently (see Figure 8). One important statistical note: These findings suggest correlation, but not necessarily causation. Our models quantify the relationship between social media engagement and brand metrics like past purchase, recommendation, and brand preference. However, it says nothing about causation. These social media brand followers may already be brand enthusiasts who are already avid customers. But either way, the large impact of a social media engagement on brand metrics means that your social media followers are both valuable customers and brand advocates. FIGURE 6 Brand Preference Is The Biggest Social Factor For Other Brands Base: 1,811 social networkers Note: Social media engager refers to individuals who engage with the brand on one of five large social networks. Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013 FIGURE 7 Those Engaging With A Brand Daily Are Likely To Make Twice As Many Purchases Than Monthly Engagers Base: respondents who engage with brand(s) on social media Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013
    • 6 FIGURE 8 Brand Perception And Likelihood To Recommend Are Stronger From Those Who Engage More Frequently Base: respondents who engage with brand(s) on social media Source: A commissioned study conducted by Forrester Consulting on behalf of Wildfire, May 2013
    • 7 Key Recommendations To get the greatest value from social media, marketers must both see the broader picture and learn to focus on the right specific tactics. Follow these five rules to build successful social programs: › Use social tactics throughout the customer life cycle. Many marketers still think of social simply as a tool for engaging their existing customers. But while many who interact with companies in social media are existing customers, our data show that customers also use social touchpoints when first discovering companies and exploring what they have to offer. To succeed in social media, it’s important that marketers map each of their social tactics to the stage of the customer life cycle where customers use it — and then consider the messages, content, and experiences they should offer customers at those exact stages of their journey. › Utilize multiple social networks. Sure, the largest social networks play an important role in your customers’ social behaviors. But this survey shows that your audiences use a range of social sites in their customer journey — and so should you. For instance, people often turn to consumer review websites when they’re exploring a product, and many use blogs and communities on marketers’ own sites as a form of post-purchase engagement. Smart marketers are using a mix of social channels and destinations to support the entire customer life cycle. › Give people what they want from social sites. You probably know by now that most people who engage you in social media are looking for offers, discounts, and promotions. 7 But many are looking for other types of value as well. More than 50% of people who engage with brands on social networks say they want to hear about your latest products and services — which shows that discounts aren’t required to upsell these followers. Likewise, 40% follow you in social channels simply to read entertaining or interesting content — proving the value of engaging topical social content. › Post regular updates to keep your followers coming back. Our surveys show that people who frequently engage with a company in social media are likely to be among that company’s most important customers. So keep your existing social audience active by posting at least once each day. Many large marketers now create content calendars to ensure a constant flow of interesting and useful posts into their social channels. › Use social in concert with other channels. Remember: While important, social is just one piece of the marketing puzzle. At every stage of the life cycle, customers cited nonsocial channels that were also important to them. And our regression analysis showed that while social media engagement is highly correlated with purchase, recommendation, and brand preference, other brand interactions, such as visiting a website or participating in a loyalty program, also show a strong effect size in our models. 8 The bottom line? Marketers must use nonsocial touchpoints alongside social tools to craft successful integrated marketing programs.
    • 8 Appendix A: Methodology In this study, Forrester conducted an online survey of 1,811 US consumers. Respondents to the survey were screened on their use of social networking sites. Questions in the study related to their awareness of specific brands, their interaction with the brands on various social networking sites, and their buying history/plans. Respondents were offered an incentive as a thank you for time spent on the survey. The study began in May 2013 and was completed in June 2013. Appendix B: Endnotes 1 Source: “Global Social Media Adoption,” Forrester Research, Inc., June 27, 2012 and “Integrate Social Into Your Marketing RaDaR,” Forrester Research, Inc.,August 7, 2013. 2 The sample of our survey represents a social media-savvy audience and consists of US social networkers who engage with brands on various social media websites. 3 In fact, TV and promotions are among the top offline methods for consumers to discover new brands, products, or services: 71% of US online adults report using TV and 51% report using in-store promotions as ways they typically discover new brands, products, and services. Source: North American Technographics ® Consumer Deep Dive: Investigating The Customer Life Cycle (Discover Phase) Survey, Q3 2012 (US), Forrester Research, Inc. 4 Source: North American Technographics ® Retail Online Benchmark Recontact Survey, Q3 2012 (US), Forrester Research, Inc. 5 Note: Purchase refers to having made a purchase from the brand in the past 12 months, recommendation refers to recommending the brand to a friend or family member, and brand preference refers to preferring the brand over similar brands. 6 Note: Social media engager refers to individuals who engage with the brand on Facebook, Twitter, Google Plus, YouTube, or Pinterest. 7 Sixty-three percent of US online adults who engage with brands on social networking sites look for deals, discounts, or special promotions, the top action taken by consumers engaging with brands in social media. Source: North American Technographics ® Online Benchmark Survey (Part 1), 2013 Q2, Forrester Research, Inc. 8 Effect size is measured by the odds ratio. For example, the odds ratio for being a social media engager of a large entertainment brand in the purchase model is 3.7. This means that the odds that an individual who engages with the large entertainment brand in social media will purchase a product from that brand or service are 3.7 times higher than the odds of someone who does not engage with that brand in social media (all other things being equal). Do not confuse odds with probability.