Ask the Expert: Should your Business Jump on the Social Media Bandwagon?

A reader asks in the Minnesota Star Tribune: As social media (Facebook, StumbleUpon, LinkedIn, etc.) provide a new form of marketing, how much of a company's overall marketing effort should be geared solely on social media? And if there is not a "magic number," is there a way to gauge, by industry or customer base, for example, online-only customers vs. storefront? Consumers' media habits are changing rapidly and current trends suggest a greater number of consumers will spend more time online in the future. While this does not point to a "magic number" of promotional dollars one must invest in social media strategy, it suggests that today's marketers cannot afford to ignore the Internet space. The first step in gauging whether to spend on social media is assessing the techno-graphic profile of your consumers. This will help you understand the extent to which your customers access the Internet and other social media, and their usage patterns: for example, whether they use these channels to connect with other customers, write product reviews or make product recommendations to others. Once you understand the profile, the next step is to define your social media strategy objectives. Do you want to use the social media to have a dialogue with customers or create word-of-mouth advertising? Do you want to listen in to what customers are saying, generate new product ideas or seek customer feedback? This will dictate the online tools you will need to create as you embark on your social media strategy. The next step is to create an implementation plan that provides guidelines about the frequency of contact you may have with your customers online and the nature of "dialogue" you may engage in with your customers. Once you have these steps in place, it becomes easier to determine how much to allocate to your social media budget. Investing in social media should be a strategic decision -- not an ad hoc or a reactive one. Firms that benefit from such endeavors are those that use social media to gain crucial consumer insights and constantly create and deliver superior customer value based on those insights.

Online Shopping for Price Comparisons

Online shopping has made consumers’ lives easier in so many ways. But it has also increased expectations, Kathy Crosett, of Marketing Forcast, says. Today’s savvy consumers expect to find exactly what they’re looking for, want the product to ship immediately and believe all this service should be available at a reasonable price. And how do they know they’re getting a reasonable price? Until now, consumers have been using comparison shopping sites to be sure they’re not paying too much. But that strategy may be about to change. According to a new survey by e-tailing group, “Comparison Shopping is a Way of Life”, more marketers are using their Web sites to show how their price compares to the competition. This strategy is winning consumer loyalty and ensuring return visits to Web sites. The survey revealed the following consumer attitudes about retailers who display competitor prices: • Likely to return to a retailer who displays competitor prices: 78% • Feel an increased sense of loyalty to retailers who provide competitor prices: 36% • No longer feel that it’s necessary to comparison shop for the item: 53% • Believe that the displayed competitor pricing data is correct: 52% The e-tailing group survey indicates that consumers often spend up to half an hour using a variety of tools to research products before they make the purchase. Analysts believe that retailers who begin offering this information on their Web sites will win consumer loyalty early, especially since they’re making the shopping process easier, and may be able to continue the positive relationship with the consumer far into the future.