Identify brand influencers among customers for retail companies

Viral marketing is used more and more, also in the retail sector. It is based on the Word Of Mouth (WOM) process, where good (and bad) experiences with product and services are shared with friends, colleagues and relatives. And in turn, those people will share the same message with their social network.

One way to conduct is viral marketing campaign is to identify a segmented customer population and target them with a marketing message which might include free product samples or promotion offers. To reduce the campaign cost, the target population needs to be selected carefully.

Marketing campaigns could target customers with a high Customer Lifetime Value (CLV), which is often defined as the expected profit from sales during the lifetime of the relationship between the customer and the company. But this measurement ignores the influence customers have on the buying behaviour of others.

Influencing buying behaviour through word of mouth is a real and proven phenomenon. Studies have shown that promotors might influence from 10 to 100 other people belonging to their social network at buying products specific recommended by the influencers. These influencers are neither celebrities nor customers with a high CLV and are therefore not detected by the marketing department. In a report from Gartner, they describe how they conducted a survey to identify these influencers: "Our survey results showed that one-fifth of the consumer population is composed of 'salesmen,' 'connectors' and 'mavens'. These are three roles that are key influencers in the purchasing activities of 74% of the population. Salesmen and connectors are the most effective social network influencers and the most important groups for targeted marketing based on social network analysis."

Besides CLV, another measure should be used to identify valuable customers: Connected Customer Lifetime Value (CCLV).
CCLV includes not only the present value of the net cash flows from customer X, but also the present value of other purchases which were influenced by customer X through social media.

Our solutions help marketing departments to detect if a network of influence exists for a particular market and product. A viral marketing campaign might not only fail because the wrong persons are targeted but also when no influence exists for a particular product or market. However, once a network of influence is detected, we can identify the influencers based on historical data.

Our solution is doing exactly that, selecting the customers that are influencers for specific products among your customer database. Beside identifying which customers are influencers, we can also select those influencers that have proven to be influencers for a particular product (category).

Even when no obvious social network exists, a social network can be constructed using the sales transactions as long as those sales transactions capture also the name of the customer. This will not be a problem if a loyalty card of credit card is being used. Once a network is constructed based on the sales transactions, the classic social network algorithms can be applied to identify the influencers to be used in a marketing campaign.

Because the sales transactions also contain the name of the products, a very specific selection of influencers can be made, e.g. influencers of a particular product or product group. This information can then be used for a cross-sell or up-sell marketing campaign.



White Paper

White paper: Social Network Analysis & Decrease Churn in Telecom

Social-3 applied its SNA solution to the Telecom Industry based on call data. This white paper provides detailed insights.


Copyright © 2011-2013 Social-3. All Rights Reserved.