Dear Dr. pROfIt
By Kevin Hillstrom
About Kevin
Kevin Hilstrom is president of MineThatData, a consultancy that helps CEOs understand the complex relationship between advertising, customers, products, brands and channels. His clients include billion dollar retailers, international direct marketers, publishers, catalog brands and online pure-plays.
Prior to founding MineThatData, Kevin spent nearly 20 years in multichannel retailing at some of the most well-known brands in the U.S., including Nordstrom, where he was the vice president of database marketing, Eddie Bauer and Lands’ End. Kevin is also author of numerous books, including his most recent, “Online Marketing Simulations,” available at Amazon.com.
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Explore Social Media's Link to Database Marketing
We read surprisingly little about social media and database marketing. Why is that?
The primary goal of database marketing is to capture the kind of information that can be used at a later date to either facilitate a purchase or reduce marketing expense to a customer unlikely to purchase again.
So wouldn't it seem that capturing social media information in a database should be a big deal? By having this information, you can truly learn how customers with prior activity will perform in the future.
Here’s a good place to start: Simply store the date of the last social media activity in your database. It's not difficult to create database fields that list the most recent date of a visit from Twitter, Facebook or any other social media Web site, for instance. This information can and should be used in future marketing campaigns.
Maybe you have a customer who hasn't purchased in 36 months and is primarily a catalog customer. The fact that the customer is visiting your Web site via social media platforms might suggest that she's moving away from traditional catalog marketing. Contact strategy testing among this audience may prove fruitful.
Differentiate between customers who interact with your social media activities (e.g., blog, Facebook friends, Twitter followers, etc.) and customers who interact with social media in general. There's a fundamental difference in subsequent performance between these two audiences.
Many merchants focus on short-term payback. You wonder if social media activities lead to increased conversion rates. You wonder if social media can drive increased retail sales. You may be better served by understanding the long-term impact of social media on your business.
In many cases, social media visitors have low conversion rates — and for good reason. The social media visitor is interested in information/conversation, not shopping (at least at that moment in time). You want to measure how annual repurchase rates, annual orders per buyer and annual new customer counts are influenced by social media. Measure success longitudinally.
Social media, or any form of marketing, is successful if a visitor in April becomes a buyer in November. A focus on short-term conversion rates misses all of the long-term successes that exist.
Success begins with data capture, so start small. Simply capture the most recent date you observe a social media visitor interacting with your Web site. Next, measure the long-term behavior of this kind of customer. Finally, act upon the information.
The secret may not be in managing a wonderful social media program, but in the implementation of a direct marketing strategy based on prior social media customer behavior.
Kevin Hillstrom is president of MineThatData, a database marketing consultancy. He can be reached at kevinh@minethatdata.com.
