For nearly 10 years, social media has been in the spotlight and, at the same time, a thorn in the side of many companies. Retailers in particular are constantly reminded of social media’s influence.
But instead of steeping themselves in expert tips and hacks, companies would be wise step back and remember what’s at the core of the social interaction.
Building a retail brand that promotes a true sense of community requires an investment in the customer experience beyond optimising a handful of social media accounts.
It’s about building connections through a variety of means, including interactions on the company’s website, blogs and in phone conversations or email exchanges. It happens in authentic personal interactions both before and after a purchase has made.
Social platforms are merely tools for achieving a higher goal, which is creating an engaged customer base of brand evangelists.
ModCloth, a trendy, fashion-forward women’s apparel site founded in 2002, has built an online community that includes a significant Twitter following.
“To create a true social-shopping experience, you need to trust your customers and engage them in improving your business,” ModCloth’s chief marketing officer Nancy Ramamurthi tells me in an interview. The company has credited its growth to its community engagement.
On one section of ModCloth’s website called Be the Buyer, visitors can vote on product samples that they would like the retailer to produce and sell. After selecting an item, users can then promote their choices to social-media networks with the click of a button.
By handing over some merchandising control, ModCloth makes consumers feel as if they have a vested interest in the products and by extension the brand. Plus, some will return to purchase the items that they helped choose. ModCloth smartly offers a “notify me” button that can alert a user when a sample has been picked.
The first tenet of creating a brand that people want to share with their friends is making them feel truly connected to the company. For the same reason that people support charities that they have a personal connection to, they support the companies they want to see succeed.
Founded in 2011, StitchFix is a younger startup that provides a personal styling service for women. People visit the website, sign up for the service and fill out a style profile based on their size, budget and lifestyle.
A professional StitchFix stylist then mails out five apparel items, according to each customer’s personal preferences. The customer keeps the items she likes, pays for them and mails back the rest.
Each item comes with professional styling tips, and theoretically the service improves as the stylist receives feedback about a customer’s preferences.
In an age when it seems every retailer is trying to automate personalisation, StitchFix takes a more back-to-basics, truly customised approach. The company’s business model relies on stylists getting to know customers over time and selecting clothes that will surprise and delight them based on their personal style.
The relationship that’s built between the stylist and customer creates a customized shopping experience that’s memorable and worth sharing with others.
“Our clients share personal information with our stylists,” Meredith Dunn, StitchFix’s vice president of client experience, tells me. “And in return our stylists are able to send [each client] pieces that fit her, flatter her body, and help her look and feel great.”
Clients have even told StitchFix stylists that they were expecting a child before sharing the news with friends and family, Dunn says. A personal connection like this can’t be replaced by a clever tweeting schedule or even amazing content. A social-media platform is sometimes the best conduit for building a relationship. But a retail relationship can – and should – live outside of social media as well.
StitchFix stylists ask customers to pin styles they like to their personal Pinterest pages. The content can come from other pinners, competitive retailers or the StitchFix site itself.
As a result, the customer can illustrate her preferences to her stylist with ease. This simplifies and improves communication between the customer and stylist. And in this way some StitchFix products gain traction on Pinterest, as a result of a consumer’s sharing (as opposed to the retailer’s).
Another major retailer, Nordstrom, has encouraged social engagement among its followers. On Nordstrom’s Pinterest pages, the company has created boards that are laser focused on specific topics, such as for shoes only or fall fashion. When customers follow a specific board, they know exactly what they’re will receive.
Building trust with customers means understanding and respecting their preferences and values. Only then might they be willing to endorse a company to their family and friends.
The abundance of customer complaints posted online represents another opportunity for retailers: how they respond can inform future relationships and affect the community they’ve tried so hard to build.
Marketers and customer service representatives should consider each complaint a breach in trust. Not only is the original customer paying attention, many would-be shoppers are watching to see how the company responds. Customers must know that even if something goes wrong, the company is still on their side.
“When negative feedback is posted publicly, we respond publicly to help resolve the issue,” ModCloth’s Ramamurthi says. “This demonstrates to the customer that [his or her] voice is heard and we will do everything in our power to make the situation right.
This article was originally posted here on Entrepreneur.com.
The Facebook Ads Strategy That Can’t Lose
It’s a numbers game.
Running a profitable Facebook Ads campaign is simple. Not always easy, but simple.
There is a formula that can guarantee a profitable Facebook Ad campaign. Once you know the formula and the values to plug in, you’ll never sink money into a losing digital ad campaign again. I know it sounds too good to be true, but stick with me…
The Guaranteed Growth Formula
Here’s the entire formula: CPA < AP
Were you expecting coefficients, remainders and dividing by polynomials? Nope, there are only two values that matter when assessing your digital marketing funnel.
1. CPA – Cost Per Acquisition
2. AP – Average Profit Per Client
If your Cost Per Acquisition, the amount you pay to generate a paying customer using Facebook Ads, is less than the Average Profit you make from each new customer you’re guaranteed a profitable campaign.
Calculating Average Profit
To get average profit per client, sum your total revenue from new clients and subtract what you spent to serve them. Divide the result by the total new clients. For example, if you made $75,000 from 10 new clients over the past year and it cost you $40,000 to serve them, your average profit is:
($75,000 – $40,000) / 10 = $3500 Average Profit Per Client
If your average acquisition cost for similar future clients is less than $3500, your campaign will technically be profitable.
Of course most businesses won’t want to spend all of their profit on acquisition. An average business can expect to invest at least 7 percent but no more than 15 percent of revenue in sales and marketing. If Cost of Goods accounts for 60 percent or more of total revenue, your low profit margin may make it difficult to afford successful advertising. Decrease operating costs by increasing efficiency or adjust your margin by raising prices.
Don’t make the mistake of calculating Average Profit based on revenue only from the first sale. Use at least six months of revenue or your lifetime client value as the basis for your calculation, or you risk underfunding your marketing and sales budget.
Calculating Cost Per Acquisition
Let’s assume you’ve considered all of your marketing and sales costs and determined you can spend $350 per new client on Facebook Ads. Let’s reverse engineer your ad campaign to see if a $350 cost of acquisition is reasonable.
The simplest Facebook ads funnel includes four metrics that build upon each other to determine your acquisition cost. I’ve included standard benchmarks for use as a starting point, but your results may differ:
1. Click-Through Rate (CTR) – Percentage of people clicking on your ad. Your CTR should be near or above 1 percent.
2. Cost Per Click (CPC) – The cost of one website visit. CPC should generally be below $3.
3. Lead Conversion Rate – The percentage of site traffic that becomes qualified leads. This value should be 20 percent or above.
4. Sales Conversion Rate – The percentage of leads that convert to a sale. Aim for sales conversion at or above 5 percent. (E-commerce companies often skip the Lead Conversion stage and have a Sales Conversion Rate of 1 percent or greater.)
If 10,000 people view your ad at a 1 percent CTR, you’ll get about 100 website visits. At a $3 CPC, you’ve spent $300. Since 20 percent of your traffic will become leads and 5 percent of those leads become closed sales, we can calculate that you’ll generate approximately 60 leads and three new customers.
Your estimated acquisition cost using Facebook Ads is $100 per client, which is well within your budget of $350. This cost may rise as you scale and target less optimal prospects, but as long as your acquisition cost is less than $350 you’ll make an acceptable profit.
Complex funnels can include several ads and conversion points, but the Guaranteed Growth Formula of CPA < AP still applies. There’s no immediate reason for concern if your metrics differ from the benchmarks. You can and should split test ideas for improvement if your numbers are far from what you expect, but don’t mess up a good thing until you’ve got a better one.
Optimising Your Guaranteed Growth Funnel
If unhealthy metrics cause your acquisition to cost more than what you’ve budgeted, start with these adjustments:
Click-Through Rate Too Low or Cost Per Click Too High
If your CTR falls far under 1 percent Facebook may stop showing your ads or show them to second-rate audiences causing your traffic to tank and CPC to increase. To improve your click metrics, adjust your ad copy (headline and body text), ad creative (image or video) and highlight the benefits in your offer.
Refine your audience. Tailor your copy, images and call-to-action to the audience you’ve selected and ensure that your audience has the desire and means to act.
Lead Conversion Too Low
If leads aren’t converting at 20 percent or more, either the promise made by your ad isn’t congruent with your landing page, or the process of moving forward is too difficult. Try using the same image and headline in your ad and reduce the form fields in sign-up forms to the bare minimum. Also try retargeting visitors who don’t sign up with ads stating the benefits of acting now, or with a different offer.
Sales Conversion Too Low
If you’re an Ecommerce brand with sales conversion below 1 percent your shopping cart or sales process may have too much friction. Simplify the sales process to decrease clutter, or increase trust by adding testimonials and trust signals near important calls to action.
Your sales process may need improvement, but that is beyond this article. In the meantime, you can still increase revenue by cross-selling and upselling those who convert. You may also improve client retention with recurring contracts. Yes, that’s why many software companies are switching to cloud-based subscription models.
When used properly, The Guaranteed Growth Formula of CPA < AP makes Facebook Ad marketing an investment, not an expense. Using the formula, the most you should ever risk is a small initial budget to test whether your estimated calculations hold true in practice.
If your net profit is 3X your acquisition cost, your funnel returns $3 for every $1 you invest. Instead of asking “How much should I spend on marketing?” The question becomes, “How much do I want to make?” I’ve built a Facebook Ad Growth Calculator that incorporates the Guaranteed Growth Formula to help execute your growth strategy. Input your revenue goal and it will estimate the Facebook Ad impressions and traffic required to reach it.
This article was originally posted here on Entrepreneur.com.
How Is Influencer Marketing Going To Change In The Future?
How is influencer marketing going to be in the upcoming time? Read on.
Influencer marketing is definitely not a new story. It’s been more than a decade now that it is immensely dominating the world of digital marketing. While being extremely cost-effective, influencer marketing strategies have very soon ended up with a great exposure. The businesses are building an immense level of reputation and earning various links with the help of this innovative marketing concept. In fact, the influencer marketing agencies are coming up with new approaches of implementation with each passing day.
Moreover, like any other type of marketing, the trends of influencer marketing are ever changing. Like how the story was five years back is not the same now and it is going to further evolve in the future.
The anticipated influencer marketing challenges
With the continuous growth of social media, influencer marketing is definitely going to face a myriad of obstacles. A few of the most expected ones are as follows:
The demand for influencer marketing is continuously on the rise and eventually, the cost is going up. If you want to enter into the market of influencer marketing and establish yourself as an influencer then you need to give a lot of efforts while building a personal brand and earning the reputation for yourself.
You want to become one among such influencers who’ve already amassed a great following means that you’ll need to make it worth it- sometimes paid promotion could be the right tactic. In the future, this scenario is going to be even more prominent as people will have to spend huge bucks to be a worthy influencer.
In recent times, consumers have gradually started distrusting the huge brands when they realised that the corporations are working for only profit without having the user’s interests in the mind. So, for them, influencers are now no more than some mere conduits for big commercial names. So, it is going to be really tough for the influencers to get the trust of consumers back.
High level of competition
Social media is no doubt such a place now which is teeming with massive competition and threats. Many influencers who are already thriving and the people who have an urge to become influencers turn it into a complicated scenario for you to enter in this space as an influencer in your own right.
How can influencer marketing unfold in the future?
Of course, there are multiple ways in which the entire story of influencer marketing can change in the coming years. Let’s check out some of the most expected developments:
Exchanges will be ahead of favours
The chapter of influencer marketing is probably going to be a pretty much an impartial marketplace in the coming time. The brands are more likely to enter into a mutual collaboration with the influencer marketing agencies in terms of interchanging shares, posts, audience visibility while being more organic rather than asking for the favour of mentioning the brand’s name to the influencers
Networking will be preferred over individuals
Gone are the days when influencer marketing used to be the story of respective individuals. Now, markets are assumed to start focussing on the entire networks or industries. The future influencer marketers can get rid of the problem of being based on individual interactions by getting the insights of blog comments, forums etc.
Change in the concept of disclosure
Why has not native advertising sustained over the long term?
It’s because the publishers always negate to disclose which posts are the paid promotions. In such a scenario, influencer marketing strategies can move a bit ahead of this transparent problem in the future. All that they are expected to do is formally announce the sort of partnership or arrangement that is existing behind each and every content. The experts believe that this process might end up being quite a tedious one. Howbeit, the consumer trust will not be hampered at all.
Limited and sensible partnerships
Influencers might lean more towards self-preservation in the coming days. Rather than establishing a relationship with hundreds of marketers or products, influencers are expected to focus more on developing authentic professional relationships which really make some sense. For examples, the influencers are intended to concentrate more on such relationships which can be profitable for themselves as individuals and also seem to be appealing to their followers. Say, a move towards quality over quantity!
No doubt, the evolution of influencer marketing is not only dependent on the aforementioned factors. There’s much more that can happen. The time can only reveal that. Influencer marketing is certainly going to change on its own in either of the two ways, a more sophisticated one or become a mere peripheral strategy which won’t be completely accessible.
Let’s just wait and watch how it comes up to us in the future!
Aren’t you taking an advantage of the current extraordinary status of influencer marketing in the meantime?
Top Marketing Trends For 2019
When you reflect on marketing trends that have taken centre stage in 2018, what stands out?
Maybe it’s the proliferation of Instagram stories or influencer marketing? Or the fact that video content has become even shorter and simpler with the rise of GIFs.
The real question is how have you incorporated these trends in to your marketing strategy, and what should you focus on in 2019? Here are six up and coming trends that you don’t want to miss:
1. Say hello to the social CEO
Customers want ‘real’ brand stories and to know what drives them. Leaders who are successful on social media show their companies’ human side and give their brands’ credibility and personality. This builds loyalty and, in some cases, an emotional connection that goes beyond the product or service.
Customers who feel this connection may even go on to become brand ambassadors.
Tip: Share stories that demonstrate your leadership style as well as company culture.
2. Initiate conversations
While 2018 brought the chatbots, the trend for 2019 is really using these bots to gather information about consumers by engaging with them on a personal level and steering them towards a sale. Bots are being trained to be authentic and sound more like people than the robots they are.
For example Facebook Messenger becomes more and more useful for brands as the platform allows customisation of automated messages and the ability to initiate a conversation at the right time.
Tip: You can also integrate this with Facebook shopping and increase conversion rates by enabling the bot to sell products to a consumer through the Facebook platform.
3. Keep it local
Influencer marketing can be short lived or a little superficial. So try to identify and partner with local influencers that are happy to work on long-term campaigns. Also use multiple touch points including podcasts, YouTube and Snapchat as well as Instagram and Facebook.
Tip: Before you reach out to an influencer, follow them and learn a bit about the way they represent brands and engage with their fans to see if they’ll be a good fit.
4. Try Instagram ads
As Facebook ads continue to dominate our feeds, advertisers are looking for a new place to stand out and get noticed. Instagram ads are on the rise, according to the Merkle report that showed that while Facebook ad spend grew 40% year-on-year in the second quarter of 2018, Instagram ad spend jumped 177% in the same time period.
Tip: Do some A/B split testing with different styles of images and calls-to-action.
5. Personalise email communication
Make sure to use automation and personalisation to really make your customers feel that you are listening.
Using hyper-segmentation, you can target very specific parts of your market. This will ensure that they receive personalised emails based on what they have expressed interest in or actions they have taken with regards to your brand.
Tip: Use automated campaigns after a first purchase; to request a review on social platforms; or just thank customers for shopping and remind them to share their purchase online.
Related: Free Sample Marketing Plan Template
6. Post in real time
In an effort to bring offline marketing into the online world, Instagram TV or IGTV allows brands to create a place for consumers to watch live events or brand content in their own time.
In addition, IGTV replaces the need for YouTube in some cases as brands are able to upload 10 or more minutes of footage directly to Instagram for consumers to watch as ‘episodes’.
This will become more prevalent in the years to come as businesses include this in their strategy. IGTV videos are less formal and will typically cost less than a traditional TV advert to create.
Whatever trends come our way, the key is to remain agile and adapt to how customers engage with your brand. And more than ever before, it’s important for all marketing touch points to align and communicate the same message.
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