The $52,000 Customer

I’ll be honest, it’s not always easy to convince VPs and CMOs that digital content marketing is much more effective than mass reach ad spends. It can be daunting to reverse the course of traditional thinking.

However, it always helps to come armed with a real-world example. What follows are two case studies from actual marketing campaigns conducted by a client of ours.

The Big Bang

Our first case is a TV campaign from this national brand. The reach of the campaign is about 120 million people.

Of those 120 million, 5,642 visited the unique URL included in the ad. That’s an engaged audience of .005%.

The brand was able to convert .33% of the engaged audience — in other words, they created 19 customers.

Finally, five people ultimately became Brand Advocates, based on a Net Promoter score of 8 or greater.

Yeah? So…

So they did it backwards. They targeted everyone, few of whom have actual influence in the marketplace. The campaign generated 19 conversions out of 120 million impressions.

If the campaign cost $1 million, they paid $200,000 for each brand advocate they created and about $52,000 for each customer.

By any advertising metric that is failure. Certainly, a number of factors could have contributed to this failure — quality of the creative, mistargeted demographics — but the real mistake was trying to reach an audience equal to about one-third of the population of the country. It’s too broad and not at all aimed at building a relationship with the customer. However, the brand in question took our advice and also conducted a hyper-targeted campaign, aimed at a single influencer, with much better results.

Turn it upside down*

For this targeted campaign, the triangle got turned around. And, instead of aiming at  as many people as possible, the brand targeted an independent blogger and provided her with valuable, branded content and free product.

Their content was then consumed by 96,000 unique visitors over the course of a year. Yes, you read that correctly. The site that was targeted was very very small.

But the brand had participated in the community there and decided to engage the influencer because her audience was enthusiastic and responsive, the kind of people who are influential in the marketplace.

Of those prosumers, 4,787 ultimately engaged with the brand by visiting the corporate site, and 37 of them bought product as a result. Further, the campaign created ten brand advocates; customers who wrote positive reviews about the products.

Again: So?

So they nearly doubled the conversions from a paltry 19 to a slightly less paltry 37. What did it cost them?

About $10,000.

For the cost of content creation, distribution, and free product, the brand created ten brand advocates and sold 37 products. The price tag was $270 per customer, or $51,730 less than the TV campaign.

Takeaway

Your marketing efforts should focus less on reaching a broad swath of consumers who are unlikely to engage with your brand. Instead, target the influentials who are engaging your audience and enable them to keep doing their job by providing valuable content. This relationship-building will ultimately lead to conversions and brand advocacy.

* This was the title of the very poorly received follow-up album to the Spin Doctors’ mega hit Pocket Full of Kryptonite.

Andrew Davis tells the story of the $52,000 Customer at the SmartBoard:

Forward Thinking examines the present to envision what’s coming.

About the author

Brad Schwarzenbach -

As an analyst on the Tippingpoint Strategy team, Brad explores new opportunities for clients to build relationships with their customers. He’s always testing new social media channels, poring over analytic data, and identifying emerging trends. He also speaks at conferences & events about uncovering powerful messages hidden within brands' unique values.

Brad’s research has contributed to the development of content & contributor strategies for such clients as Breville, Rodale, Long’s Jewelers, and Fusionapps, as well as being a frequent contributor to the Tippingpoint blog. He’s been “listening” to the way we communicate online since the old AOL People Connection days and watched the way that digital communication has evolved.

An English and Creative Writing major at the University of Connecticut, Brad’s spent most of his career creating web content and becoming intimately familiar with web theory for Bayard, Inc. and TomTom Inc., giving Brad keen ears and eyes to what, exactly, makes web content valuable.

Outside the office, Brad feels most at home with his beautiful wife-to-be Kristina, or on the golf course. “There’s a distinct pace and rhythm to the way people communicate online.  Understanding and taking part in them yields amazing opportunities for my clients to not only grow but to improve their business. I’m constantly looking for those opportunities.”