In the past few weeks, I've corresponded with several start-ups regarding social media marketing as part of their business launch. One prospective customer asked me the reasonable number of customers that he could expect for the campaign - and the cost per customer acquisition.
This type of question is one I receive often ('what's my ROI?') and it's even more complex to provide an answer for a start-up business. In fact, I've customized a sales funnel graphic - which will soon be on the home page of my forthcoming website - to showcase social media's role in this process.
The first two tiers - generate awareness and build relationships - are shaded in blue because these are the areas where social media is most relevant.
Generating awareness often overlaps with offline and traditional marketing efforts (think speaking to a local chamber, print advertising or brochures, and participation in trade shows) to help us bridge the gap. The plans we develop for our clients generate awareness through a variety of tactics. Paid online advertising such as Facebook 'likes' ad or boosts, sponsored posts, or Google Adwords are often critical for jumpstarting growth and brand awareness. At the core of this tier is content marketing - from finding compelling content to pique interest to drafting relevant and helpful content that can be distributed via syndication sites for greater visibility.
Relationship-building is the foundation of social media marketing. We use a variety of community-building and public relations tactics to fulfill this step. As awareness builds, so does audience engagement. This is where it's time to provide followers with relevant and valuable content and work to establish a community. From there, social media starts to take a life of its own - through customer and prospect engagement, word of mouth and social sharing efforts. If not already part of the first tier, we want to include connecting and establishing relationships with thought leaders, journalists and influencers. With that, I urge all businesses to give relationship marketing at least one year before anticipating a steady stream of qualified leads. Social media is a relationship-building tool, and strong relationships take time. Keep in mind that if relationship building is done well, a business can build customers for life.
The final three tiers are where the waters get murky as the reliance on social media starts to dwindle. In the third tier - identifying needs - we can still utilize social media for listening and polling the audience. We recommend this in conjunction with website landing pages, email blasts and blog posts that can be used to ask questions, which help prospects diagnose their own problems. We can then analyze this data to tell us what's most important to the audience.
Solutions can come in the form of content marketing. This could include solution-focused social media and blog content or email marketing campaigns with a clear call-to-action. The solutions provided in this tier are also a lead-in to conversion - and where business operations and customer service are often tested.
Finally, lead conversion happens when the prospect accepts an appointment, comes into the store or buys a product or service. If there’s a lack of sales conversion, there are a myriad of factors that could be involved – and I urge a business to go back and evaluate operations or website functionality. And while it can be unnerving, it’s critical to evaluate the market need for a service or product, how it compares to the competition and the ease by which customers can move through the sales process.
Notice very little mention of social media in this final tier. We can integrate social media into this process, but it's use as a sales tool, is minimal - arguably non-existent.
As you can see, determining a customer acquisition cost is difficult because social media only dominates the top of the sales funnel. From there, it's estimated that 10 percent of those folks make it to the middle tiers (qualified prospects), and only 10 percent of the qualified prospects actually convert to customers. This is a challenge for any business - let alone a start-up business.
Social media has helped our clients to increase their visibility, build relationships and reach customers and prospects in ways like never before. But, there's no silver bullet - and limitations do exist. It's my job to help my clients and prospects determine this reality and get the most from their efforts.
