Will a social media marketing strategy that’s designed for an Inbound Business-to-Consumer (B2C) relationship have similar results to an Inbound Business-to-Business (B2B) social media marketing strategy?
Immediate reactions |
- How could it?
- What’s the difference?
Why?
The bottom line question |
Is a B2C strategy a cost-effective way to earn new B2B clients, measured by the Acquisition Cost per Client (Primary KPI)?
Today
Enter the words marketing strategy into Google search and you’ll receive thousands of pages of information. The majority of the links will contain either vague articles using industry jargon or something like 7 Steps to the Best Marketing Strategy; articles that are thin on details and results but optimized for Google searches.
The purpose of this series of articles |
- Define one type of marketing strategy that we advocate.
- Implement the strategy.
- Report the results.
Clarity
- B2B | Bussiness-to-Business
- B2C | Business-to-Client
- Inbound |
- Creating valuable content and making it available at no cost to potential clients throughout their buying process.
- Awareness
- Consideration
- Decision
- Examples |
- This article is part of our Inbound, B2B process (Awareness stage).
- If you’ve started following us (subscribed) on YouTube or signed up for Strategic Tips, our E-mail newsletter, then you’re in the Consideration stage.
- And if you’ve contacted us, then you’re in the Decision stage.
- Creating valuable content and making it available at no cost to potential clients throughout their buying process.
- Outbound | Also known as Push Marketing, because you’re pushing information out to a less defined group of people regardless of where they are in their buying process.
- Example | Cold E-mailing.
- KPI | Key Performance Indicators
Sales Strategy
Conversion Ratios
One percent to 5% is the usual conversion ratios bandied about by the marketing and advertising industries. The challenge when referencing these numbers is fourfold |
- Conversion from which starting point to which ending point in a sales strategy?
- How established is the company that’s being used as an example?
- How expensive are the products being sold by the example company?
- Example | A product or service that sells for less than $200 has a very different conversion ratio than one that sells for greater than $200.
- Which sales channel was used?
- Examples |
- Social media? Which one?
- Direct E-mail?
- Examples |
KPI
Baseline Test | Key assumptions
- New company or new to social media.
- Test duration | 20 weeks.
- A product or service that sells for greater than $200.
- No paid promotions during the test duration.
- Sales Strategy |
- High quality, branded photos, with valuable content.
- Organic via hashtags on the post and high-value commenting on other people’s content.
- Example | To create a high-value comment; quote from the post and then add your viewpoint in two sentences for a total of three sentences.
Details |
- Instagram | Two photo stories posted per week
- Duration | 20 weeks
- KPI 1 | 100 followers
- Result | Activates Instagram Insights, similar to a simplified version of Google Analytics–helps determine your audience with demographic and geographical information.
- Note | Ensure that your Instagram account is set up as a business account.
- Duration | 20 weeks
- Pinterest | Two pins per week
- Duration | 20 weeks
- KPI 2 | 100 followers
- Result | 5 new followers per week
- Note | Ensure that your Pinterest account is set up as a business account.
- Duration | 20 weeks
- YouTube | One video posted per week
- Duration | 20 weeks
- KPI 3 | 1,000 subscribers
- Duration | 2 years
- KPI 4 | 4,000 watched hours
- Results | Currently, 1,000 subscribers and 4,000 watched hours activates the ability to link to a website from within the video and advertise within the video.
- Note | Ultimately, our goal is to generate 1,000,000 views per video. At this viewing rate, proceeds from YouTube advertising will be in the $1,500 to $6,000 range. By using a portion of the revenue generated by YouTube, our monthly advertising budget becomes self-sustaining, the result of which further increases sales.
- Duration | 20 weeks
Acquisition Cost per Follower/Subscriber |
This is not the Primary KPI described earlier in this article (Acquisition Cost per Client). Acquisition Cost per Client is calculated by dividing the total of all advertising costs during a certain period by the number of new clients obtained during that same period.
Instead, this is an intermediate KPI to measure the success of our social media strategy by dividing the total advertising cost spent on Instagram, YouTube, and Pinterest during a certain period by the total number of new followers/subscribers on each of these social media platforms during that same period.
The importance of this KPI is to determine if there’s a social media platform that inherently attracts people who have the potential of being your clients.
- KPI 5 | Acquisition Cost per Follower/Subscriber
- If you’ve retained a company or hired a person to create content and advertise for you, then divide their total cost during the time period being measured by the number of new followers/subscribers you’ve obtained during that same time period.
- Note | If you’re the owner or partner of a business doing the work yourself, it’s tempting to assign no cost. While from a cashflow perspective this may be true, realistically your time has value. Is your time worth $25 per hour, $250 per hour, or something in between? Here are three ways to calculate your value on a time-basis |
- If you’re receiving a salary and benefits (Example | Healthcare), divide your total cost (salary, benefits, taxes) by 52 weeks, and then divide that number by 40 hours per week.
- If you’re not receiving a salary or benefits, what would you otherwise be doing to generate revenue? For example, if your other activities generate $10,000 per month in revenue then the value of your time (on a revenue basis) is $10,000 x 12 months / 52 weeks / 40 hours per week = $53 per hour.
- If you’re in a startup business that has minimal revenue, then use information about the total average annual cost for a Marketing Manager (Example | Payscale lists the U.S. national average as $65,271. We’re not affiliated with Payscale). $65,271 / 52 weeks / 40 hours per week = $31 per hour.
Projected Outcomes
Conversion Ratios | Baseline test
Based on our client data and research across a broad spectrum of companies, here’s what we’re expecting for our conversion ratios.
To reach our goal in 20 weeks of |
- Instagram | 100 Followers (KPI 1)
- Requires 2,500 total views or 63 views per post (2 posts per week x 20 weeks)
- Pinterest | 100 Followers (KPI 2)
- Requires 3,400 total views or 85 views per post (2 posts per week x 20 weeks)
- YouTube | 1,000 Subscribers (KPI 3)
- Requires 170,000 total views or 8,500 views per video (1 post per week x 20 weeks)
Acquisition Cost | per Follower/Subscriber
Let’s assume that your hourly rate is $75. Then your estimated acquisition cost per follower/subscriber |
- Instagram |
- A high-quality post on Instagram takes 2 days to research, write, format, and add a high-quality photograph.
- Per post cost | 2 days x 8 hours per day x $75/hour = $1,200 per post.
- Total cost for 20 weeks x 2 posts per week = $48,000.
- A high-quality post on Instagram takes 2 days to research, write, format, and add a high-quality photograph.
- Pinterest |
- A post developed for Instagram can be reformated quickly for Pinterest.
- Per post cost | 2 hours x $75/hour = $150 per post
- Total cost for 20 weeks x 2 posts per week = $6,000.
- A post developed for Instagram can be reformated quickly for Pinterest.
- YouTube |
- Taking the content from your Instagram post and reconfiguring it into a 10-minute long How-To video is technically not difficult. But, we need the video to be engaging in order for it to receive the 8,500 views needed to be successful.
- Per video cost | 1 day x 8 hours x $75 = $600 per video.
- Total cost for 20 weeks x 1 video per week = $12,000.
- Taking the content from your Instagram post and reconfiguring it into a 10-minute long How-To video is technically not difficult. But, we need the video to be engaging in order for it to receive the 8,500 views needed to be successful.
Total Cost | $66,000.
Total New Followers/Subscribers | 1,200.
Acquisition cost per Follower/Subscriber | $55.
Wait a Minute |
This is between 10 and 50 times too expensive. Let me explain.
Our measurement in this article is Acquisition cost per new Follower/Subscriber not per new Client. Although one of our assumptions is that your product/service sells for greater than $200, after gaining 1,200 new followers/subscribers, approximately 450 of those new followers/subscribers could become new clients (38% overall conversion rate from followers/subscribers to new clients).
This means that your true new client acquisition cost is $147.
Perhaps your business model allows for this level of expenditure, especially since one of our other assumptions was that your company is new to social media. But if you’re like me, even at the beginning, I’d want the acquisition cost of a new follower/subscriber to be between $1 and $5 with the goal of reducing the cost to below $1 per new client.
Options |
Let’s address the two things that we don’t want to do |
1. Try to significantly reduce the time needed to prepare high-quality work. I know it feels like quickly writing a series of 7 Steps to the Best Marketing Strategy is the right choice.
I have several friends who are great at playing the card games BlackJack and Poker, but they refuse to play Roulette.
With Roulette, the odds are very much stacked against you. One of my friends recommends this strategy for playing Roulette: “…as you’re walking by the table, throw $20 on the table and keep walking.”
It’s the same scenario for low-quality content such as 7 Steps to the Best Marketing Strategy. Everyone has that type of content, so the game is immediately stacked against you. Don’t believe me? Check out how little engagement a low-quality post receives as measured by quality engagement. It’s going to be very low to non-existent.
2. Find a minimum wage person or intern and have them create the content. Do you want a person with little to no experience being the voice of your company? Neither do I.
The right choice is to find a person who will work for an hourly rate that’s lower than yours.
- Find a talented person who can do it all for $40/hour and your acquisition cost drops to $30 per new Follower/Subscriber. It’s still expensive and may devour your entire profit margin, but you only need to sustain it until you become a sustainable YouTube channel: 1,000 Subscribers and 4,000 watched hours.
- A person who charges $40/hour is grossing (not including taxes and benefits) $83,2000/year. Another option is to hire a full-time person who works for your company in a salaried position. Earlier I referred to the total average cost for a Marketing Manager being $65,271. That person looks like a bargain now because you’ll be able to amortize their total cost over two (or more) parallel campaigns. And when you start generating significant income from YouTube, part of your new revenue can be used to offset their salary.
- Work with a company that does these things |
- Written contract.
- Capped fee included in the contract.
- Performance-based guarantee.
- The benefits?
- If they spend more time than expected, the extra expense is their problem.
- If they don’t perform to the metrics (KPI) stated in the contract, they’ll correct the problem, continue working at no extra charge, or refund a portion (or all of your money) to end the contract.
Bottom Line
Is a B2C strategy a cost-effective way to earn new B2B clients, measured by the Acquisition Cost per Client (Primary KPI)?
We’re going to find out because I’m going to invest in trying to achieve the Instagram, Pinterest, and YouTube goals over the next 20 weeks.
Do I want to succeed? Absolutely. But regardless, we’ll be able to answer this question based on actual research that’s based on data collected during the 20-week challenge.
Next Steps
Subscribe here and I’ll share the results with you in 20 weeks for Free.
