Brand owners must build social skills

24 April 2012

NEW YORK: Brand owners seeking to make the most of social media must learn to "monitor", "respond", "amplify" and "lead" on these sites, McKinsey has argued.

A survey by the company of 792 marketers found 39% of firms use social sites as their main digital method to reach customers, and 47% expected this to be the case in the next four years.

One problem is this channel's "nebulous" nature, with shopper conversations occurring on a wide range of properties, and with varying frequency. "It's often difficult to see where and how to influence these conversations," McKinsey said.

Following on from this are related concerns regarding proving the payback from sites like Twitter and Facebook, meaning it is hard "to justify devoting significant resources" to them.

McKinsey reported that social media typically only takes 1% of the average annual marketing budget, but while many organisations are keen to boost this to 5%, further financial proofs will be required.

It also identified four key purposes of this medium. The first, to "monitor" brand buzz, was argued to be the "core function" of social media as it applies throughout the decision journey.

Gatorade, PepsiCo's sports drink, was referenced here, having established a 24 hour "war room" tracking this information in real time, offering vital insights and shopper feedback.

The second task is "responding" to positive and negative comments. McKinsey cited the case of a fake photo on Twitter claiming to show McDonald's asking African American customers to pay an extra service charge, which the firm effectively dealt with via official statements and engaging influencers.

A third duty is "amplification", or ensuring marketing efforts have a "social motivator" encouraging on-going interaction and sharing among web users, thus fuelling conversations.

Gilt Groupe, the online fashion site, and Groupon, the group buying platform, achieve this by giving shoppers credit when they refer a first-time customer. McKinsey found direct recommendations deliver engagement rates 30 times higher than digital ads.

Starbucks also showed how to foster loyalty after purchase, having launched a contest promising a $20 gift card to users uploading pictures of its new ad billboards on Twitter.

Equally, customer service communities have become popular, with Intuit, the software specialist, creating forums for its Quicken and QuickBooks products, where consumers answer 80% of questions.

The final role of social media is to "lead" and encourage behaviour change, as demonstrated by Old Spice's "Smell Like a Man, Man" campaign, which yielded 19m hits and saw sales rise by 27% in six months.

Bonobos, an online menswear company, logged a similar result through providing discounts to its Twitter fans that retweeted its messages a certain amount of times, bringing in 100 first-time buyers and securing a payback of 1,200% in one day.

Data sourced from McKinsey; additional content by Warc staff