Marketers Using Social Media to Strengthen Customer Loyalty

Marketers use their ad campaigns for a variety of purposes – brand awareness, customer acquisition and loyalty, reputation management. But do some ad formats work better for customer loyalty? A joint survey released by COLLOQUY and the Direct Marketing Association (DMA) suggests that marketers tend to use certain formats more than others when they want to strengthen customer loyalty.

The survey shows that marketers are turning to social media, in particular, for multiple reasons. Here are the figures for average spending on the social media format, by type:

  • Customer loyalty $88,000
  • Brand awareness $53,000
  • Customer acquisition $30,000

Clearly, social media is a favorite for customer loyalty campaigns. The survey results also revealed that, this year, marketers allocated nearly 300% more to loyalty campaigns using social media. This strategy suggests marketers wanted to hold onto existing customers during the recession and knew it would be a less expensive proposition than trying to win new customers.

Spending on social media campaigns is also linked to company size. Overall, 17% of survey respondents said that 1% of the marketing budget goes to social media. Another 16% set aside between 4–5% for social media. But small companies say they’re spending up to 50% of the budget on social media.

Marketers seem to be following consumers as they shift their attention to social media sites. A new Nielsen report indicates that many consumers are now spending more time on blogs and social media than they do on email or games. But at the same time, marketers in this survey said they aren’t sure exactly how to measure the success of their investment in social media and over half do not monitor what’s being said online.

To improve the return on this new spending channel, more of these companies will likely invest in monitoring and measurement tools sometime soon.

[Source: U.S. Marketers Spend the Most  on Social Media. Consumer Goods Technology. Consumergoods​.com. 30 Aug. 2010. Web. 22 Sept. 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.