The Value of Social Media Customers Is Different
Case Study: Social Media Customers Are More Valuable Customers
Case Study: Social Media Customers Are More Valuable Customers

Too many companies looking for proof that social media marketing works tend to look at the wrong things. “How much money will I make?” “How many new sales will I have?” Both are frequent questions from executives and business owners investigating social media marketing as tactics for their businesses. And they’re not bad questions, just sometimes the wrong questions. Sometimes it’s not how much you make, but how much of a difference your social media (read: relationship-building) efforts make in what your customers look like.

CareOne Debt Relief Services opened the doors on it’s online community — a place where anyone could register and ask questions about debt relief, consolidation, budgeting and more — in 2006. In that time over 1.4 million people have signed up because the community was a valuable informational resource from a trusted company. (CareOne has Better Business Bureau and similar certifications like many people have freckles … they’re not a flash-in-the-pan debt reduction or loan consolidation scam.)

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But in 2009, CareOne started using a social media team, led by Nichole Kelly, to not only help spread the word about CareOne through social media channels — Facebook, Twitter and YouTube — but to engage customers in their already active online community as well. When Kelly and team realized many of the online community members were prospects looking for help rather than existing customers, they realized they had an opportunity to prove some worth in their social efforts and show that a social media-connected prospect or customer was different than someone who came to the company from non-social channels.

“Our primary goal with social media was customer retention,” Kelly told me. “But I found myself in meetings with other parts of the marketing team who could measure their bottom-line impact and I couldn’t. So one of the first things I did (with our IT department) was build an end-to-end measurement solution so I had all the reporting everyone else had.”

What Kelly devised was a system to track new community members who came in from social networking sites (through a web analytics package) and visited the community. Then track those members along the buying cycle, past hurdle number one (signing up for a debt relief plan) through hurdle number two (making their first payment).

Because CareOne had little interaction on social media channels before their program started, Kelly was able to put together a focus group of customers who had no social media contact with the company, then compared those conversion rates (for signing up, then paying), to a control group of individuals who had interaction with the social media team in the community.

What CareOne found was that the personal connection for consumers (having some sort of social media contact with the company) led to a longer buying cycle (24-28 days versus as low as 30-minutes for those without a social media relationship with the company), but an incredible jump in successful conversions through the sign-up process and ultimately the point of purchase.

How much of a conversion? Social media connections filled out the consultation (lead-generation) form at a 179% higher rate than the typical customer. Sales? They were 217% more likely to make their first payment. For one particular problem area (people who partially fill out the sign-up form then quit), social media prospects went back and completed the form at a 680% higher clip than non-social media leads. They made their first payment at an astonishing 732% better rate.

When you are talking about opportunities for investment in highly converting prospect channels it’s clear that this one should be at the top of the list for consideration to see if it can scale from tens of thousands of accounts to the six-figure volume found in traditional paid advertising channels.

Now that you can see the value of a social media customer versus one that comes through traditional channels, at least in this circumstance, let’s put a point of clarity on this. Social media customers aren’t more valuable. Every customer is. The company investing the time to connect and nurture those relationships is what’s more valuable. The point of this exercise was not to say that CareOne should allow the social media team to keep doing what they do because they have higher conversion rates while the rest of the company just churns out sausages as usual.

The point is that when your company fosters a relationship with customers, then each customer … every single one of them … has the potential to become more valuable in dollar figures and relationship metrics to your company. While we’ll never reach a point where all people are social media customers (traditional channels are not going away), the more customer nurturing we can do through social media can prove more valuable to our businesses.

And for the record, CareOne’s online community is a bit of a case study in itself. Featuring an “Ask the Expert” section, blogs and forums for customers to ask questions to become comfortable with the notion of trusting a company to help them get out of debt (paying someone to help you stop paying people), was intended to be a customer retention and support effort.

The community averages between 35,000 and 80,000 unique visitors per month with traffic variations at different times of year. And even with 1.4 million registered members since the community opened five years ago, a large portion of the company’s customers have never even been to the community. What this suggests to me is that only a portion of your audience will even care to connect with you in some sort of community or social platform. But those who do can prove to be incredibly valuable as longer tail and higher value customers.

CareOne sort of proves that relationships work.

Customer service and education is what we do,” Kelly said, explaining the role of her corporate social media team. “Retention and sales is how we’re measured, but we don’t sell. Sales happens as a result of our efforts.”

Well said.

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About the Author

Jason Falls
Jason Falls is the founder of Social Media Explorer and one of the most notable and outspoken voices in the social media marketing industry. He is a noted marketing keynote speaker, author of two books and unapologetic bourbon aficionado. He can also be found at

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