Category Archives: segmentation

Social Contagion

new-product-diffusion-model-diagram-ppt

Social contagion is the process through which individuals learn about new things from others.  A phenomenon can become contagious when people see others engaging with something and enjoying it.  The standard research in the area says that contagious things tend to fit into people’s lifestyles, are seen out and about and offer the opportunity for people to try it out for size.

Marketers who understand social contagion can better target customers and manage the customer adoption process.  The reasons why a product or service might be adopted by a set of people may differ.  For example, a new fashion item, such as skinny jeans may spread through a population because people become aware and interested in the new item.  If so, generating awareness might be a goal of a communications strategy. Financial services adoption would operate differently because individuals would change beliefs about a financial instrument through a process of assessing risk versus return. In this case a strategy aimed at experts would be more effective in generating trial among those who trust them.  This is also true in the prescription drug market in which doctors may be better candidates for initial communications strategies than individuals.  Market can assess the likelihood that social influence follows a particular pattern and develop appropriate strategies for enhancing adoption. The chart below indicates different strategies for different firm goals that marketers may choose to pursue.

 

Motivation for Adoption

Strategy for Influence

Awareness and interest in an item

Generate significant buzz in many outlets by creating engaging content with a viral component

Learning leading to changing beliefs

Focus on experts to provide message arguments aimed at beliefs

Influencing the legitimacy of an item

Encourage influential targets to adopt the item

Status disadvantage of not adopting

Emphasize activities of close connections in a social network to influence behavior

Benefits grow with additional users in the system

Focus on the most important network users and their connections

(Iyengar & Van den Bulte, 2011)

 

Traditional Media and the Art of Shaving

20131228-172856.jpg

I have been listening to some recent podcasts suggesting that traditional media is dead. Mitch Joel’s Twist Image Podcast recently hosted the authors of Z.E.R.O, Joseph Jaffe and Maarten Albarda, who advocate for zero paid media as a conversion model.

At the moment most major brands disagree with the strategy because traditional media is still delivering. For example, I noticed a subway car before the holidays filled with transit ads for something called the Art of Shaving. The ads were somewhat cryptic to me because I was not familiar with the brand. Since I teach advertising I decided to go to the site to learn about the brand because I could tell from the quality of the copy and art that it was professional grade. The Art of a Shaving was a Procter & Gamble site selling shaving kits as gifts. The brand also has retail locations.

Clearly P&G thinks there is some value to traditional advertising, but I have two criticisms of the ads. First, I was likely one of very few people who actually took the time to go to the site after having viewed the campaign on the subway. As such, P&G would have benefitted from a more obvious execution, though the ads did deliver a brand identification. Second the target was off. The ads only discussed shaving for men and did not indicate that a woman should check out the site. Women are a great target for buying men’s shaving items as gifts.

The Art of Shaving did one thing right. They used traditional media to generate interest in the brand and drive potential page views or retail visits. Transit ads are often forgotten in the social media world, but people still commute to work and ads on the subway have a captive audience. With all the clutter in social media and the small likelihood that content will go viral, marketers still need traditional media to drive response. As time goes by and more and more content appears in social media traditional ad executions and multiple impressions will be important to get people to pay attention. The old hierarchy of effects model from the advertising literature that suggests people need 7 exposures to a message before responding still has value as a concept.

The big question with social media is how to get the content into the hands of those who might benefit from it. Can you rely on your followers to do that for you? An established brand with many loyal followers who are active creators and critics might expect people to share a very interesting piece of content. However, sharing content depends on the individual’s motive to appear intelligent to others and provide their friends useful information. Relatively few pieces of marketer generated content meet those criteria.

As such brands have to use traditional media to get some attention where they can control the message. The media planning process is so much more complicated when you have many new outlets, but still must consider the old ones. Welcome to the traditional, online, social media, mobile world. It is only going to become more complicated as mobile grows.

The Customer Experience and Profitability

One of my favorite podcasts is Internet Marketing by Kelvin Newman and Andy White of Site Visibility.  I have learned so much from them about online marketing, search engine optimization, social media and mobile marketing.  Much of the knowledge I have incorporated into my classes.

This week Andy interviewed Rosie Freshwater of Leapfrogg, a UK company specializing in customer experience marketing.  The content was directly related to my prior blog post on customer lifetime value so I thought I would share it with you.  Rosie talked about how her firm uses customer lifetime value to segment the buyers and then customize marketing efforts for the different segments.

The process for evaluating the segments is as follows:

  1. Mine Google Analytics data to determine buying patterns of your customers and segment them by their value to you.
  2. The value is based on an analysis of how much a customer spends, how often he or she buys and your expenses in serving that person.
  3. Ask each customer a question to determine their level of commitment to your product or service: On a scale of 1-10 how likely would you be to recommend our business to a friend?  Provide the number one reason why.
  4. You now have groups of customers telling you whether they like you or not and why. This information can be used to improve the poor experiences and elevate the good experiences.
  5. Map the optimal customer experience for each segment.

Rosie Freshwater indicated that by using this technique she discovered that if a client offered free shipping sales and profits would increase. For another client she discovered that email was a much more effective form of communication than social media.

In general, social media may or may not be the right strategy for a particular segment.  Like all communications the decision to use a particular media depends on the target market and their level of engagement with the medium. Social media isn’t free and spending on other types of promotions may be more effective and efficient.

In closing the podcast makes the important point for businesses: Grow profitable sustainable revenue, not just revenue.

Here is a link to download the entire podcast.

Thanks to Kelvin Newman, Andy White and Rosie Freshwater.

Surprise Tablet Owners are Wealthy

The Pew Research Center, a highly reliable source for research data found huge growth in tablet ownership since April 2012.

Now, 34% of US adults own tablets and their demographics are attractive to marketers. The most likely owners are ages 35-44 with incomes over $75k.

Prior research on tablet owners suggests that these customers spend more money on purchases than people who don’t own tablets. Why not? Tablet owners appear to have more money to spend.