Increase the Impact of Your Digital Marketing Spend in a Down Economy

With the rapid adoption of online communities and digital marketing, companies big and small are beginning to realize that customers remain loyal when there is a community connection point geared towards collaboration and engagement.

The long predicted recession has arrived with its requisite budget cutting, belt tightening and slashed expectations. The good news, however, is that slashed budgets don’t necessarily mean reduced marketing efforts. In fact, an Epsilon survey of CMOs and other marketing executives found that 94% agreed with this statement: “A tough economic period is precisely the time when marketing plays a key role.”

While other marketing channels are looking at cutbacks, social computing is on a growth path because it’s low cost, it works and it represents the future of marketing.

It’s Low Cost
Compared to a typical advertising campaign, blogs, forums, wikis and other tools are incredibly inexpensive to implement and administer, ranging in price from virtually free to economical.

When used the right way, social computing and Web 2.0 applications can reduce operating costs. Take Cisco for instance: 43% of visits to its support forums are in lieu of opening up a support ticket.

Another low-cost benefit to using social computing tools in a digital marketing strategy is that much of the content found in forums, wikis and blogs is also user generated, which costs nothing or next to nothing for the company that manufactures the product or service. Many global corporations have found that wikis are excellent, low-cost replacements for printed product documentation and are much easier to keep current.

It Works
In addition to low costs, social computing platforms have been proven to get results that can’t be realized with other marketing media. Most traditional marketing communication is 99.9% geared towards boosting awareness of a brand and its products. During a recession, simply building awareness loses its effectiveness as the average consumer is less likely to jump from awareness to a purchasing behavior.

Social computing tools step beyond awareness to actual engagement with the consumer. Global giants such as Electronic Arts, AT&T and others have come to realize that customers remain customers 50 percent longer if they are community members. During uncertain times, deep engagement with your target audience is much more likely to result in customer evangelists and increased sales versus just brand awareness.

Forrester calls this “motivating consumers in the middle of the funnel” and it’s when consumers are on the fence about whether or not to make the purchase. Social software helps you move prospects from the “middle of the funnel” to a sale by providing a community environment where consumers can voice their opinions and feel part of a greater whole.

The beauty of an online forum is that it provides a stage for peers to connect, interact and build relationships with one another, sharing all kinds of information—including experiences and new ways to use those products. Your social computing investment immediately turns into an innovative platform, as your customers share with you the pros and cons of your offering and how they use it to fit their unique needs.

Leading companies such as Dell and Starbucks have deliberately set up social networking sites to elicit customer ideas for new products and improvements. Users submit, vote on, and discuss ideas with each other, and the corporate product managers keep community members informed. These corporations then use that direct feedback to continually refine their development efforts.

The result? Better products and services, quicker time-to-market and reduced costs—all of which enable companies to meet consumers’ needs in a shorter period of time. By applying these digital marketing tools to your overall marketing strategy, you set yourself up for success that will continue well beyond a recession.

It Represents the Future of Marketing
Companies that slash their social computing investments during a recession do so at their own peril. No matter how slow the economy gets, consumer behavior will continue to move away from traditional media.

This is particularly true of companies that target Gen Y consumers, those between the ages of 18 and 27. These users are incredibly Internet savvy and live in the social computing universe on a full-time basis. They are consistently creating content on top of your content and expect to be heard. The companies that attract this group the best are those that understand and keep up with social computing trends. Gen Y consumers may be a small percentage of your customers today, but they will grow in significance over the next 10 to 20 years.

Today’s economic recession will come and go. By refocusing your cinched marketing budget on channels that provide the biggest return and can actually measure that ROI (i.e., social computing tools and business intelligence software), the impact of your digital marketing spend will set you up for rapid growth and position you ahead of your competition.

Ken Vernon ([email protected]) is vice president of marketing at Telligent.