Marketers use social media to deepen loyalty

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By: Wise Marketer Staff |

Posted on September 2, 2010

Marketers use social media to deepen loyalty

At a time when an increasing focus is being placed on social media in the marketing mix, research in the US by Colloquy and the DMA has found that companies using social media primarily to deepen customer loyalty are spending almost twice as much on this emerging channel as competitors who use it simply for brand awareness, customer acquisition or other core marketing goals.

Specifically, the survey showed that the average social media spend for marketers whose primary objective is to obtain customer loyalty was US$88,000 in 2009, compared to US$53,000 for brand awareness and US$30,000 for customer acquisition - the objectives which attracted the next highest spending levels.

The amount of social media budget that marketers allocated to loyalty objectives had also increased by 293% over the past 12 months, surpassing allocation increases for all other social media-related marketing objectives.

"Social media budgets for loyalty objectives experienced the most growth in 2009 and, in fact, since 2007," noted Colloquy's managing partner, Kelly Hlavinka. "Savvy social media marketers recognise that they must turn first to their best customers and apply the same principles inherent to loyalty, which are combining economic incentives with social capital."

Colloquy and the DMA teamed up to help create a profile of US marketers' social media activities, with a focus on spending trends and metrics for success in building customer loyalty. In late June and early July 2010 the team gathered 369 survey responses from qualified marketers, and concluded that the use of social media as a marketing tool is still in the early experimental stage.

"Marketers across all sectors are involved in social media," said DMA research manager Yoram Wurmser. "However, after five or six years in the space, and growing social media budgets, marketers are still testing the waters to figure out what works, with the incentive to accelerate their efforts being driven by consumers' rapid adoption of this trend."

In fact, recent research from Nielsen also showed that consumers are spending 43% more time on social media activities than one year before, making social networking and blogs the top online activity (followed by online games and email).

One of the key revelations from the research is that the absolute dollar amount marketers are setting aside for social media is surprisingly low:

  • When asked what percentage of their company's overall marketing budget is spent on social media, the largest group, covering 24% of survey takers, selected "don't know";  
  • 17% of respondents said they allocated only 1% of their annual marketing budget to social media;  
  • 16% said they allocate 4-5%;  
  • Smaller companies with tighter budgets are significantly more likely than large companies to say they spend almost 50% of their marketing budget on social media.

Another important finding was the apparent lack of metrics for social media marketing success:

  • When asked to identify the most important measure of social media success, nearly two-thirds of respondents selected "don't know";  
  • Of those who identified a measurement technique, the largest group, covering 20%, said "engaging customers to respond and provide feedback";  
  • 65% of respondents said they were not using any listening tools to monitor what their customers say about their brand.

A full survey report containing the complete results has been made available for purchase directly from Colloquy or the DMA for US$240, or for US$135 for DMA members and Colloquy subscribers only - click here.

For additional information: ·  Visit the DMA at ·  Visit Colloquy at