June 25, 2012

4 Tactics to influence the new, SOCIAL consumer!

Traditionally the value of a customer was measured by his ability to purchase a company's products and services or CLV (customer lifetime value). But now with consumers recommending products and sharing experiences on social networks, the purchase cycle has changed. It is becoming increasingly necessary for companies to measure their social influence. Therefore, as shown below, value of a customer increases with customer revenue as well as social influence, also known as social CLV or CLV 2.0.

So what tactics can Marketing deploy to influence the social consumer?
There are 4 tactics that can be deployed depending on level of customer's revenue and social influence.

marketing tactics to influence social consumer
4 tactics to influence the social consumer

Tactic 1 - Engage
Customers who have not purchased your products or services and are also not engaged in your social ecosystem (i.e. don't follow you on Facebook or Twitter) will need to be engaged with your products and services. Now it's a well known fact that the cost of acquiring a new customer is far greater than retaining an existing customer. However if companies are able to get prospective customers into their social networks, the overall customer acquisition cost can be reduced and marketing effectiveness can be improved. For instance the cost of acquiring a customer via Facebook is much lesser than sending out mass mailers, offline campaigns, or traditional methods of acquisition.

Tactic 2 - Connect
Customers who purchase often or have a high purchasing power have the potential to influence their friends and impact future sales. Companies should try and connect with such consumers who have a high purchasing power but focus on those who have been very satisfied with the purchased product or purchase experience. The idea is to have them start engaging with your business.

Tactic 3 - Convince
Customers who may not have bought products or services but have a strong presence in your social ecosystem are the ones that need to be convinced. By leveraging digital experience platforms where customers are able to interact with the products and services and understand your value proposition, companies will find it more easier and more cost effective to identify prospective buyers.

Tactic 4 - Retain
Companies should get more aggressive in identifying high value customers who have a strong influence in your ecosystem. More than loyalty programs, collaboration platforms (e.g. Starbucks ideastorm) that allow consumers to provide feedback and co-create new products and services have the potential to engage and retain customers in a sustainable fashion.

Updating the Holistic View of the Customer
Besides, collaboration platforms and apps that provide the means to connect and engage with consumers, BI and CRM (includes social CRM) analytics tools will also be required to provide a holistic, 360 degree view of the customer. These tools will be able to help Marketing identify and track social consumers; thereby aiding in the retention process. This kind of view will need to be derived from big data analytics that consolidate structured data (transactional or customer revenue) and unstructured interaction data (social influence). 

As consumers become increasingly social, CLV 2.0 is the new metric that Marketing could use to measure their effectiveness in deploying the 4 tactics mentioned above.


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