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Digital Marketing
Who's afraid of a tweet?
What's in a post? A tweet? A link? The answer could help you
grow your agency's bottom line
By Heather Lockwood
In this age of technology, there are many new and innovative ways to reach potential customers, but many agencies find this type of non-traditional marketing to be a bit daunting. Money is no longer the barrier, with practically free solutions through Facebook, Twitter and YouTube, and growing numbers of agencies are interested in investing in these new technology solutions. Despite the interest, overall agent involvement in social media marketing remains very low.
What's holding agencies back?
There are three possible reasons related to the medium itself:
1) Producers hear about social media, but don't really understand the scope or if anyone has really been successful in that space;
2) They don't know how to set up a Facebook page, a Twitter account or upload videos to sites like YouTube; and
3) They're on board with the concept, but they need content. The messaging and potential resource issues prove to be a barrier to implementation.
But even before you get there, there's the one big question staring you in the face: "If I try this new strategy, what's my return on investment?"
Recent studies around the value of a Facebook lead have resulted in some of the first valuation data. The April 2010 issue of AdWeek (study by Virtue.com, a firm that helps businesses build brand using social media) revealed that the value of each fan on Facebook is worth around $3.60.1
The cost of acquiring that lead was recently analyzed by the analytics firm Webrands and published in The Wall Street Journal in February. So how much does a Facebook fan cost? According to Webrands, about $1.07, so the resulting return on investment (ROI) is close to 300%.2 Compare that to the cost of acquiring a new policyholder, which is sometimes one-and-a-half to two times the first year's commission.
Finally, one more thought on ROI. Try changing return to referrals and conceptually the strategy makes even more sense. Most agencies get the bulk of their new customers from referrals and have traditionally sourced that from community interaction, so when that community moves to cyberspace, it follows that the strategy should move there too.
If you determine that the ROI is worth the investment, the other obstacles can easily be overcome. Start by talking to business people who are successfully using social media (you can find them on Facebook or LinkedIn), and ask them what worked for them. Enlist friends and family to help you get your page set up and to start the chain of comments and tweets. Sign up for newsletters or e-mails about things that interest you to start the flow of content. Then just spend a bit of time each day to comment and keep the two-way-conversation going.
If you have been on the fence about incorporating a social media strategy, consider what you're spending today on traditional marketing and determine the return. Through social media, you have the opportunity to reach well beyond the scope of traditional marketing, at a fraction of the cost. You also have an opportunity to reach potential customers when they are starting their research.
Buying decisions
When making purchasing decisions, people tend to do some research. They may ask friends or co-workers, but chances are they will also do some research online. Today, social media and Web search instantly bring the world of experts and opinions into the decision-making process. You should be one of those experts.
A report of findings from iModerate in March 2010 states that more than one-half of Facebook fans say that social media influences their buying decisions and 67% of Twitter followers reported the same.3
Among Facebook fans, these were the top reasons for being a fan:
49% - Being a customer
42% - To show support
40% - Discounts and promotions
On Twitter the numbers were slightly higher; 51% said being a customer, 44% stated discounts and 42% just do it for fun.
Since almost half of respondents are fans simply because they are a customer, think about this. If you had 25 customers who are your fans on Facebook and they posted or tweeted to 25 more people who posted and tweeted to 25 of their friends... imagine how quickly information about your business can be spread.
1 Study published by Virtue: http://vitrue.com/. Adweek.com: "Value of a 'Fan' on Social Media: $3.60", April 13, 2010
2 The Wall Street Journal whitepaper by social marketing and analytics firm Webtrends; http://blogs.wsj.com: "How Much Does a Facebook Fan Cost? $1.07", February 1, 2011
3 Emarketer.com; http://www.emarketer.com/Article.aspx?R=1007568
The author
Heather Lockwood is Advertising Manager of Foremost Insurance Group. For more information visit ForemostAgent.com.
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