Social Influence Marketing: A guide to online marketing for start-ups and entrepreneurs

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    08-May-2015

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This presentation describes our approach to online marketing for Hex Goods, an e-commerce retailer for designer goods. We designed a series of marketing campaigns using tools like Google AdWords, Facebook Ads, Twitter, affiliate programs, and blog campaigns. This presentation documents the approach, the results, and our learnings from the process.

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  • 1.Our goal was to test the effectiveness of social media marketing tactics indriving value for an online retailer Based on cutting-edge research on the science of social networks, Social Influence Marketing aims to help companies use social influenceThe conceptto spread messages through networks to drive product purchase or consideration A well-defined learning agenda will enable us to rapidly prototype, test,and iterate our service offeringThe goal We have a customer, Hex Goods, which will allow us to analyzemarketing tests to determine the optimal channel, language, and tacticsneeded to drive desired behaviorsRegular updates on test plan, execution, and learnings The output Final slide deck synthesizing our learning agenda, our findings, andultimate recommendations| 1

2. The mystery-heuristic-algorithm framework guided our learning agenda Is social media an effective marketingMysterychannel? How do we identify inuentials within anetwork? Heuristics How does a networks structure affect ourability to spread a message? How do messages in a social networkdrive purchase or consideration within a Algorithm targeted demographic? | 2 3. Our customer: Hex Goods is an online boutique that features new and unique products from independent designers. Hex Goods launched in November 2011 with a collection of products for Christmas, followed by a Valetines Day collection in January/February 2012. By taking the concept of a small local design boutique and adding the elements of good online retailers (free shipping, a generous return policy, and a satisfaction guarantee), we hope to build a brand in a traditionally fragmented market. | 3 4. Social media is a great marketing tool if used effectively; however itrequires a real investment of time and energy to bear successSocial media hasSocial proof and Network diversity ispowerful targetingrelevance are key tocritical capabilities engage communities Social media allows for Startups are natural Endorsement by n-th degree targeting echo-chamberscommunity memberslends social proof Low barriers enable Expand network diversity broad seeding ofby:Target based on messagesoAdding teambehavioral members with demographics, not just Key is finding entrydiverse networks traditional demographics points into relevantoEarning publicity networks for the target oJust getting outCommunicate through marketthere appropriate socialchannels for maximumeffectiveness | 4 5. Social media marketing manual for an entrepreneur1Define the key metric or metrics that drive economic outcomes for yourDefine metricsbusiness2Create a network systems map to identify factors and loops that Build systems mappositively and negatively influence key business metrics3Target high-impact network variables, drivers, and feedback loops forDesign testingmarketing efforts campaigns4Embed analytics to enable rapid learning from testing campaigns and Test, measure, and understand how marketing efforts are influencing the network systemiterate| 5 6. 1 Establish proper metrics for the SIM campaign Example of metric selection process for our clientEasy to Links to bus Useful for Driven by Potentialmeasure goalssmallmarketingGuidelines metrics samples Purchases 1. Easy to measure 2. Links to broader business goals in a Newsletter measurable way (eg, awareness, profit) sign-ups Referrals 3. Useful with small sample sizes Return Visits 4. Likely to be driven directly by marketing campaign Engaged Visits Visits | 6 7. 2 Create a network systems map to identify factors and loops thatpositively and negatively influence key business metrics GuidelinesExamples from our map1. Develop systems map focused 1. Focus on engaged visitorson optimizing your key metric2. Return visitors, newsletter sign-2. Determine the key secondary ups, purchases, attractiveness,metrics awareness, referrals, etc3. Determine other key variables 3. Advertising, value proposition,that you can influenceuniqueness, incentives, etc4. Determine the relationship4. Incentives drive referrals,between variables referrals drive publicity5. Identify the key feedback loops 5. Engaged visitors-referrals-that existawareness-new visitors-engaged visitors6. Identify among the loops, whichhas the greatest impact on the6. Referral loop, purchase loop,key metricincentive loop, etc| 7 8. 2 Example network systems map from our clientFeedback Loopsto focus on: Referral loop Investment loop Awareness loop Publicity loopNot focused on: Return loop| 8 9. 3 Design campaigns: Target high-impact network variables, drivers, andfeedback loops for marketing effortsGuidelines1. Determine the top priority loopsand drivers relevant to your keymetric Our campaigns2. Determine the appropriateA Facebook campaignchannels based on B Google AdWords Relevance C Blogs Budget constraints Twitter D Impact on systems map Referral program E3. Design pilot campaign4. Iterate campaigns based onresults | 9 10. 4 Test measure iterate: Embed analytics to enable rapid learning fromtesting campaigns and understand how marketing efforts areinfluencing the network system Ideas Learn faster Build faster Learn Build Split tests Focus on MVP Customer interviews Outsource Customer development Iteration Root cause analysis Free & open source software Robust advisory board Stage-gates Hypothesis based testing Simulation testing Data Develop Measure faster Split tests Measure Focus on analytics Measure what matters Real time analysis Customer-back KPIs Active marketing Tie results to protability Quantify results Adapted from http://www.startuplessonslearned.com/ & Eric Ries talks | 10 11. 4 Example from Hex Goods Iteration: Tested four different marketing campaigns (AdWords, facebook1,facebook2, Z-ferral)Build faster Free & open-source software: Used Google Analytics to track visitorbehavior; Venisim for network maps; Gephi & NodeXL for twitter analysis Measure what matters: Chose profitability-connected metrics from the onset Quantify results: Google Analytics allowed us to track connect source ofvisitor to site activity Measure Split tests: Horse-raced facebook campaigns to determine effectiveness Hypothesis-based testing: All testing campaigns were grounded in a detailedhypothesis about outcomes Simulation testing: Built robust network systems map to understand whichLearn fasterpotential drivers could have the highest impact on our target metrics| 11 12. Campaign Details Feedback loopsDescriptionmeant to driveEffectiveness Referral loop, A3 targeted facebook ad Publicity loop, Facebook campaignsAwareness loop Investment loop BGoogleCampaigns focused on gifting Awareness loop AdWordsand product-specific searches CTargeted design blogs to writeBlogsPublicity Loopstories about Hex Goods DTargeted twitter analysis to Publicity Loop,Twitter determine optimum communitiesAwareness Loop,to follow and promote to Referral Loop EDeveloped affiliate program to Referral Loop, ReferralPublicity Loopincentivize referrals | 12 13. Campaigns that were both relevant and had an element ofsocial proof were most effective in driving engaged traffic Marketing ROI Cost per BounceCost per Source Campaign visitor ($)rate (%)engaged visitor Facebook Geography 1.6083 9.42Untargeted connections0.45832.65Targeted connections1.6483 9.68Wall posts0.08480.15 BlogsOh, the Lovely Things 0.1545 0.28LA in the Bay1.11 431.96MBA Social 1.0225 1.36Nest Eagle Rock 0.4536 0.71Inventables0.619 0.67 Google Headband 0.869312.68 AdWords0.38 93 5.66Kindle Fire ZferralAffiliate program 1.79 60 4.46 | 13 14. AFacebook ads were one of the highest return options, but only when weused the social graphCampaigns Learnings Geography: Targeted standard Geography campaign performed Facebook ads to 10 zipcodes thatpoorly; click-through rates were low, represented our target market CPC was high, and the target population was very small Connections: Sponsored stories presented to people who Connections campaign performed very are friends with someone whowell; most clicks and connections came likes Hex Goods from friends of friends Targeted connections: Targeted connections performed okay; Sponsored stories presented tolimiting to target demographic put people who are friends with viewers outside of the friend circle someone who likes Hex Goods, and also falls in our target Facebook campaigns drive additional demographic value through likes that open up a marketing channel (wall posts are a very low cost channel)| 14 15. AGeography campaign results | 15 16. AConnections and targeted connections campaign results| 16 17. BGoogle AdWords performed poorly, and led to particularly high bouncerates, making them an expensive advertising optionCampaignsLearnings Gift campaign: Hex Goods CPC on Google AdWords is driven by general advertisement to peoplethe competition; who else is bidding, searching for gift-related keywordsand how much can they afford to pay? Product-specific campaigns: Winning on Google AdWords means Product-specific advertisements to having the highest customer LTV and people searching for keywordstherefore the highest bid price related to those products Therefore, Google AdWords is anineffective tool for cash-poor start-upswho dont have customer histories andtherefore little understanding ofcustomer LTV In addition, bounce rates from GoogleAdWords are extremely high | 17 18. BAdWords campaign results | 18 19. CBlogs were an effective marketing campaign, especially when they weretargeted to the right audienceCampaignsLearnings Oh, the Lovely Things: Featured Blogs and publicity outperformon a design blog that frequentlyadvertising by a significant marginfeatures products from Etsydesigners Relevance is extremely important indriving traffic; design blogs dramatically LA in the Bay: Featured on a outperformed other blogsgeneral womens lifestyle blogfrom LA; contest offering a free Because the cost of publicity is mostlyHex Goods product time, blogs are a great resource fortime-rich, cash-poor start-ups MBA Social: MBA lifestyle blog Nest Eagle Rock: Personal blogof one of my designers Inventables: Blog for a localChicago start-up | 19 20. CBlog campaign results| 20 21. CPinterest is a great way to be seen, but did not drive significant referraltraffic 140 pins| 21 22. DA twitter network analysis is helpful in determining which users to investin establishing relationships with Analyses Learnings Analyzed three key influentials Twitter analysis helps determine which on twitter with a direct reach of of the potentially influential users to over 920k design-interested target individuals Just counting followers isinsufficient followers must also Evaluated network structure to be a relevant demographic find brokers and gate keepers that would impact targets f-ratio* For targets with a very low f-ratio*, attempt to establish relationships with Assessed network makeup toits follows that have a high ratio better understand the A high ratio indicates that the communities our targeted individual is more likely to influential followsreciprocate your follow request*: F-ratio is a measure of following-ratio or approachability, defined as following relations divided by follower relationships | 22 23. DThe importance of the f-ratioUnderstanding the f-ratioThe f-ratio is defined as a twitter users number of following relationships divided by the number of followerrelationships and is an estimate of a twitter users likelihood to reciprocally follow you.Furthermore, an f-ratio reveals the type of twitter user the individual is: A high f-ratio (1:many) indicates that the individual uses twitter to broadcast information, as such are veryinfluential. These users tend to be celebrities, companies, and established brands. A low f-ratio (many:1) indicates that this user is primarily a consumer of information. Many individual, passive, andunengaged users fall into this category. A neutral f-ratio (1:1) indicates that this user may regularly engage in a dialogue with the community. Theseusers are often respected bloggers, marketers, and smaller brands.Summary of our analysis Twitter userDescriptionf-ratio Follower relevance@designmilk Popular modern design blog .0014Low@thecoolhunterTrendspotting blog .003 Low@dwellModern home goods and interior design.0018Highmagazine and blog@dwell employeesEmployees of dwell corporation .34High| 23 24. Ddesignmilks relationships are primarily one-way and lie outside of ourtarget demographicInterior designCompanies &institutes # of followers: 470k f-ratio: .0014 Broad design, design blogs, product design| 24 25. Dthecoolhunters had a diverse network and a high f-ratio; however, itsnetwork lacked communities of the target demographicMusic Celebs & bloggers Style & fashionAd & marketing agencies # of followers: 172kArchitecture & designf-ratio: .003News, travel, info| 25 26. Ddwells network had a small communities of our target demographic and alarge community of current and former dwell employeesBlogs/websitesInterior design Museums & institutesEmployees Architecture # of followers: 355k f-ratio: .0018| 26 27. Ddwells employees represent an ideal entry point to dwells network; theywere often re-tweeted by dwell and had an average f-ratio of .34:1Employee community of dwells network| 27 28. E Referral program through Z-ferral was not as effective as we had hoped for driving incentivized referralsCampaigns LearningsAmbassador Program: Developed an incentivized referral Referral program needs significant program that required sign-ups by volume to find appropriate existing visitors ambassadors Utilized zferral embedded Rewards may need to be driven from software to award 10% cash metrics other than purchases, reward for any purchase driven especially in a start-up environment by referrals Referral needs marketing on its own. ItHello-bar: is not driven much by organic growth Implemented simple hello bar on the top of the site to inform visitors about the referral programFacebook mini-campaign Attempted to drive ambassadors based on personal facebook connections and hexgoods fans| 28 29. DHow to incentivize sharing amongst groups? Why would people recommend?1. Available outlet (fbook, twitter,Guidelines for referral programgmail)2. Engage on this outlet 1. Determine appropriate reward/incentive system3. Satisfied customer, or Prizesinterested customer Discounts Points4. Incentivized to share within Cash rewards the network2. Determine reward structure,5. Know someone who would likethe product or serviceincluding whether to award for2nd order referrals (eg, pyramid6. Think its relevant for your structure)community3. Choose appropriate program7. Think something is cool| 29 30. DWe chose to use Zferral as our affiliate platform, but there are manyoptions available Options for an affiliate program Our initial campaign choiceZferral Referral software, easy to integrate Campaign 1 2 3 4 with ecommerce sites 1st order5% 10% 15% 10% Based on a monthly subscriptioncommission plus 3% commission2ND order0...