“What’s the Value of a Like?” an article in the March-April issue of CRM, HBR, Harvard Business Review, lands on the social marketer like a proverbial ton of bricks. In it Leslie K. John, Daniel Mochon, Oliver Emrich, and Janet Schwartz report on four years of experiments, 23 in all, that engaged 18,000 people and concluded that, “Social media doesn’t work the way many marketers think it does. The mere act of endorsing a brand does not affect a customer’s behavior or lead to increased purchasing, nor does it spur purchasing by friends.”
If that’s all you read you might believe that everything we’ve thought and acted upon involving social media marketing was wrong; however, it’s not, though the research clearly signals that we have to adjust our thinking. Back before there was experimental data to support various contentions, it made perfect sense to believe that the likes and endorsements posted to friends on social media would drive more business. After all, didn’t we all subscribe to the idea that a disgruntled customer will tell many more people about a brand’s shortcomings than a happy customer will sing its praises? And didn’t we all accept that a social megaphone could be a brand disaster if not handled properly?
Yes, and yes, we did all that and it’s not wrong, at least not totally, but there are two ways to see this as the authors point out,
“It’s possible that getting people to follow a brand on social media makes them buy more. But it’s also possible that those who already have positive feelings toward a brand are more likely to follow it in the first place, and that’s why they spend more than non-followers.
Teasing this apart is important because millions of dollars in marketing budgets hang in the balance. But also, according to the same article, a survey of CMOs showed that 87 percent couldn’t document how social creates new customers. When a number like this gets this large, the next step is often disenchantment which vendors understandable want to avoid.
The research shows that social likes and endorsements might be good to have but successful brands still understand that their marketing job isn’t done simply because a friend liked something. Such a friend will still need convincing so social’s value here is more one of teeing up the opportunity for more conventional marketing. Interestingly, the authors conclude that the social set up is a good precursor for good old advertising.
So in this vignette we can observe the latter stages of social marketing’s hypecycle. The technology arrived with great fanfare, a stampede of people bought it, and it promptly failed to perform up to inflated expectations—that’s a pure hypecycle. The good news is that towards the end of a hypecycle things settle down as we come to understand the best uses for new technologies based on real-world data. That’s what this report tells me. It sets social down in a continuum of marketing tools and approaches and demonstrates how it can best work in that milieu.
As a practical matter this now focuses most directly on customer loyalty. It’s nice to get incremental new business with an assist from social marketing, but the effect is most dramatically about loyalty for the simple reason that the hidden message of the study is the need for active engagement. Active outreach by a brand to get and keep customers involved is what drives the likes long after the original purchase.
A like from a one-time buyer says something about a product but likes coming in from customers over time indicates engagement and loyalty. Even customers who aren’t actively buying more can still retain a positive impression of a brand and that drives recommendations.
The research seems a little light on engagement and loyalty and I hope the authors revisit and write more. For many the relationship between engagement and loyalty is still a mystery and the article doesn’t help by separating ideas about initial and subsequent sales but it should. Most markets today have gone way past their exponential growth phases and social media marketing can easily be the difference between zero-sum markets and retaining some of the vibrancy that comes with product exploration and adoption. This is worth internalizing.
(Cross-posted @ Beagle Research Group)