Is Social Media Just Winning Price Sensitive Customers?

Box o' couponsIn social media, marketers buy attention with promotions or discounts. And research shows consumers expect this from marketers. 44% connect with brands on Twitter for discounts (source). The problem is, buying attention is an old school mindset, plopped into a new communication paradigm.

For social media to become an important part of the marketing mix and create loyal customers, it cannot continue to rely on tactics that reinforce consumer price sensitivity. Consistent discounts and promotions erode your pricing power; preference increases your pricing power.

Or, as Jay Baer said much more sucintly on Twitter last week, “You can only buy love for so long”. (Thanks Jay, one cheeky response sparked an entire post).

How can social media create preference? I would love to hear your answers to this question below. In the meantime, here are three keys I see to creating preference and how each one can apply in social media.

Know Your Audience

Why does your audience choose you? This is much more than a broad industry, title or demographic definition, it requires focusing on a segment of that audience, defined by preferences in your category (value, feature, quality, integration, etc) that align with your offering. This is your preference segment.

In social media, your interaction and content must focus on your preference segment. Your position may alienate some. That is OK. You are connecting with your audience, not the broader market.

Example: Alienware targets gamers. They serve an audience looking for the ultimate in performance and willing to pay a premium for it. In social media, they do not need to be concerned with someone only looking for Microsoft Word, email and web browsing. A quick look at @alienware confirms even though they are owned by Dell, they are not a traditional computer company.

Great Product

Your product must deliver a great experience for your preference segment. Not every great experience will be shared. But create enough and some will be shared online and offline. Social media marketing cannot overcome a consistently poor customer experience.

Imagine if Alienware started selling low performance PCs positioned as gaming systems. Although they might be great computers for someone, they would not meet the demands of Alienware’s preference segment. The experience would be poor and Alienware would lose credibility with their core audience.

Deliver Value

Value requires more than today’s standard stream of marketing content or social media posts. Delivering real value requires content or engagement focused on the area where your knowledge and ability intersects with your audience’s needs or interests.

Your Turn

Promotions and discounts can definitely deliver social media fan and follower numbers. But is this the only path for social media, or can activities like those outlined above drive preference? Share your view below or with me on Twitter.

About Eric Wittlake

I am a digital and B2B marketer with a background in online media and analytics. I work with B2B clients on media and integrated marketing programs. You can connect with me on Twitter at @wittlake or in the comments here on my Digital B2B Marketing blog.

6 Responses to Is Social Media Just Winning Price Sensitive Customers?

  1. I do believe social media and humanization can create preference. In fact, I think that’s the whole point of the exercise, to win the “tie games” that your price or quality won’t otherwise win. Which is why I cringe whenever social media gets too offer driven. You don’t need social media to compete on price. If you want to do that, just compete on price.

    But I do think that for some product categories (and that number is increasing) we DO theoretically care about where we spend our dollars. We want to support the “good” guys, in a world where “bad” guys seem to be all around us.

    Social can help make you a brand of choice, but your operations have to back it up every day.

    • Jay, thanks for taking the time to comment, and for providing the original inspiration for the post!

      The idea that we care about where we spend our dollars, about buying local, supporting people we want to support, is interesting. At least for me, this comes down to people, and it is yet another reason why PEOPLE, not logos, need to be the face of your social media programs. We then build preferences for working with those people.

      Thanks for taking the time to comment, I appreciate it!

  2. Hi Eric,

    Great post! I’ve personally done some research on consumers liking Facebook business pages and following companies on Twitter for several clients. One of my clients is in the luxury travel industry and it’s a difficult sell with social media because we don’t really offer discounts. We have the ability to negotiate rates but typically its nothing you can’t get off the hotel, resort or cruise website. What we focus on is the experience, value-added amenities, customer service and our knowledge (and personal experience) in travel.

    What I’ve found is that people want to connect. Being social is hard-wired into our DNA as humans and if you relate to them on a personal level, they become loyal and price isn’t as much of a concern. It really plays into the old saying “People buy from people they like.”. I think relationship marketing and companies working toward building a stronger connection with their customers is where marketing is going or at least should go.

    Thanks for your post. It’s nice to have some confirmation that other marketers are like-minded!

  3. Hi Eric,

    Good post and interesting question! I want to offer slightly different perspectives. One key driver in all this is for results from social media. Agencies and internal are tending to keep gravitating towards these discounts and price promotions because they can show results. Also, on the consumer end, social media is being used like the old local community newspapers of yesterdays – coupon driven and and sales promotion. I have witnessed agencies even give this analogy when talking about social media. As Jay points out – it becomes an offer driven approach and yes I cringe too! Community building and humanizing relationships with your preference segments takes time and using the best of what social media has to offer. If the view of social media is one of a channel to push promotions and offers – then it will be a self-fulfilling prophecy and a cycle hard to break with consumers. It starts with a good understanding of your preference segment and knowing what you want to accomplish – versus – just seeing social media as another channel to push out discounting and promotions.


    • Tony, thanks for commenting. I agree, and I see a lot of the issue being in the preference segment. Too many companies try to be everything to everyone in their category. That is a challenge in traditional marketing, but social media makes it nearly impossible. I also see that as one of the challenges with delivering a great product. Product is watered down to meet the needs of a broad segment and it no longer meets the more unique needs of a preference segment, that captures their attention and creates advocacy. Serving the masses is too often a road to an undifferentiated product.

      Thanks for adding to the discussion, I appreciate it!

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