A recent survey of US marketers points to a growing use of social media to retain customers and build loyalty. An article from eMarketer reports that over the past couple of years social media budgets have shifted towards customer retention strategies as marketers focus on the benefits of strengthening relationships with existing customers. Budgets dedicated to using social media for customer acquisition, although still growing, is now only around one-third of that spent on retention initiatives.
These findings most likely reflect the results of trial and error campaigns by marketers in previous years who dipped their toes in social media without a true understanding of where it could best be put to use in the marketing mix. It also suggests that marketers are starting to learn how to measure the ROI of their social media investments.
What is clear is that regardless of the primary objective for using social media, budgets are increasing dramatically in this space, which shows that when tapped in the right way, social media can be a highly effective channel for interacting with consumers.
Another study shows that it is small businesses who are having bigger successes in using social media for acquisition purposes. The study showed almost half of small businesses successfully connect with new customers via social media compared to only 28% of large businesses. Perhaps small businesses understand the value of customer relationships more than large firms, and therefore know how to focus their marketing to be more personal and relevant to prospects.
As an increasing proportion of marketing budgets are devoted to social media it may be wise for big business to take a look at what their smaller counterparts are doing to acquire new customers and grow their business online. Arguably it is the social media campaigns and initiatives of smaller businesses that are having a bigger impact on an organisations growth, and are the ones showing the most innovation.