Small Business Marketing 100 – Premiums Outperform Discounts

58% of US Facebook users EXPECT to gain access to exclusive content, events, sales, discounts or promotions for no better reason than clicking a “Like” button.

Talk about an over-weaning sense of entitlement.

These results from an Exact Target study are nothing new to us. But it is a little surprising that we haven’t been paying attention to what it means for the sort of customer we’re getting from social media.

Let’s face it, the customers we’re getting from social media are bargain hunters. They’re only coming for a deal, and their loyalty doesn’t last past the cash register. So why are we settling for such crappy results?

Probably, likely (in my opinion definitely) because today’s social media gurus are stuffed full of old-fashioned – even mainstream – “throw-mud-against-the-wall-to-see-what-sticks” marketing concepts. They’re the sort of person who thinks ads on Facebook are social media marketing.

Every marketing test done show that discounts bring in low quality customers. They also show that premiums consistently outperform discounts in terms of response rate, customer quality, and how long the customer stays with you. That’s because there’s a fundamental difference in attitude between the bargain hunter and the rewards shopper.

That’s why credit card companies and airlines (and most other successful companies) have rewards programs rather than discount programs.

The obvious question at this point is what kind of premium can we use to tap into the other 42% of US Facebook users who might be of higher quality and deeper loyalty?

The answer lies in remembering that social media is also called Relationship Marketing. This week on SocialMediaCheapAndEasy.com we devote the entire show to exploring this topic.

The premium is the relationship, the conversation and the social interaction inherent to social media. It’s also the key to the small business marketing goldmine: word of mouth advertising.

Listen to this week’s episode on SocialMediaCheapAndEasy.com to discover four examples of conversations that are happening right now – and why they’re happening. We also look at a small business that is connecting business owners with the conversations that are happening in social media.

And those conversations are not all happening on the “big” social media sites.

Many of them – and most of the conversations among buyers – are happening in a place that most of us have stopped thinking about.

Leave a Reply

Your email address will not be published. Required fields are marked *