Now that’s the spirit: During a six-week period this past holiday season, a single emailed Christmas gift guide promotion from Kirkland's Inc. doubled recipients’ dollars per transaction over average performance in its 300 stores across 29 states. That added $8.7 million in incremental sales and $4.6 in incremental margin, while capturing 330,000 new email addresses--gold for the retailer, which stopped conventional direct mail. So what made the campaign such a winner for the Nashville-based home décor retail chain?
It listened to social media.
Kirkland's Facebook page and the MyKirklands.com community site taught the company more than it could have ever guessed about its business and practices. Monitoring customer remarks, Kirkland's learned how to avoid a hitch in its sales process that suppressed results in a previous email coupon promotion. And customer suggestions in September actually drove item choice for the gift guide. "We get a lot of feedback from our customers through social media that helps develop [email] promotions going forward, as well as promotions in the store," said marketing vice president Mark Krebs, in an interview with CMO.com. Feedback on promotions, coupons, and collateral also led to two 2010 campaigns that together netted 390,000 new email addresses.
Many companies see social media merely as channels to talk to customers and respond to the stray complaint. Maybe they track volumes of posts mentioning their brands and the associated sentiments. And yet Twitter, Facebook, discussion forums, YouTube, blogs, and other platforms offer far more than what most are mining their data for. For example, these tools can be used to spot trends, follow chains of influence, analyze comments, and uncover important consumer associations. A growing number of savvy CMOs and their teams realize what’s at their fingertips. For those just starting to grasp the possibilities, here’s what you should know.
Perfectly Imperfect Data
In theory, social network data should be suspect. Participants are self-selecting--not random samples of the population, and most active comments come from a small portion of users. According to social media monitoring vendor Sysomos, in 2010, 22.5 percent of Twitter users accounted for 90 percent of all its activity.
However, this is business, not theory. "It's hard to ignore if you're crawling the Web and looking at 50 million opinions on one topic and you're seeing trends," said DeeDee Gordon, president of innovation at Sterling Brands, an OmniCom-owned consultancy that counts MTV, Time Inc., Royal Caribbean, Coach, and Visa as clients. "You want to talk to the people who matter--the people who use your product and are passionate about your product."
Like many companies, Vienna, Va.-based marketing automation software vendor Eloqua uses Net Promoter scores—a customer loyalty measure—as a critical business metric. "Ninety percent of our revenue comes from existing customers," director of content marketing Joe Chernov told CMO.com. "As a whole, customers that engaged with us on social media have a 450 percent higher Net Promoter score than our average customers." Any trend among them is, by definition, significant.
Furthermore, people active on social media might influence others and outweigh those who are less vocal. Insights can be startling. Gordon told CMO.com that companies in the music industry can find performers whose fans and followers are "statistically in line" with established acts. That type of information can help a label identify a potential future act. Or a company like Starbucks can identify up-and-coming artists mentioned most often with the brand and then use the information to help reach potential customers and choose music that sell well in the stores.
Next: Mining associations for better marketing.
