I find that a lot of times companies create a social presence out of fear of being left out, only to find that once they have “jumped in the pool” they are just treading water with no real direction and no real results. Other times a goal is stated, but with little understanding of the tools and best practices. This leads to unrealistic and unmet expectations. If you and your management team are discussing social media it is important that you have set a goal that is aligned with your companies objectives and a realistic time frame for reaching that goal.
More followers on Facebook or twitter, thousands of views on your viral video or visits to your site may be precursors to dollars in the bank, but your goal should be focused on showing you the money, not the potential of money. Here are the three things you should be focusing on as a retailer.
- Frequency: Increasing the frequency of transaction from your existing customers
- Reach: Getting new customers in the door
- Yield: Increasing the dollars spent per transaction from customers
Planning for Success
There is an old proverb that says “He who fails to plan, plans to fail”. Social media is the same. Creating a page, making it look good and posting pictures and news about your events may gain you a modicum of success regarding your page’s popularity, but more than likely this will not show huge gains in NET profit over the long haul.
Spend some time in your POS data. A simple segmentation can help you identify customer segments and focus your efforts on something specific. Try dropping your customers in three groups based on their Recency, Frequency, and Monetary value. Once you have determined their RFM value you can break them into 3 groups.
- Group A – high frequency, high avg. spend
- Group B – frequent, moderate/low avg. spend
- Group C – (At Risk) inactive/infrequent, low avg. spend
Now try and find out what the similarities are within them and between them. See where there may be opportunities to move the C group to the B group or the B group to the A group. How can your social media initiatives help you achieve these goals?
Don’t forget to measure your efforts against your goal. Are your actions moving Group B members to Group A members for example. What are the precursors to this shift? It is ok, and recommended, to look at likes, follows, page views, etc. Just remember that those alone will not help you assign value to your efforts.
