July 15, 2008

Social Media and The Heavy User

If you promise not to tell my competitors I'll tell you a secret.

One of the keys to being successful in the advertising business is to target the "heavy user." By heavy user, I mean the high value customer who spends a lot of money in your category.

Without going into detail (if you want detail, read The Ad Contrarian book) the key points are these:
  1. In many categories one heavy user can be worth as many as 10 to 20 light users.
  2. Some "light user" customers can actually cost you money because the expense of marketing to them is more than any possible ROI.
  3. Brands that attract the heavy users tend to be the leaders in their categories.
One of the axioms of social media marketing is that people who engage in online conversations are exceptionally valuable to marketers because they tend to be extraordinarily influential. In It's the Heavy User, Stupid I stated my objections to this hypothesis.

Now I'd like to state another. Social media marketing may turn out to be a light user strategy. In other words, the people who engage in social media may be the customers you don't want to spend your marketing dollars on because a) they may be your category's light users and b) may be influential only to other light users.

Here's my logic. Heavy users tend to think of themselves as experts in the category. Wine lovers think they know wines. Women who buy lots of handbags think they know handbags. In fact, they're usually right. They often know more about the category than the marketers do. Don't believe me? Ask your daughter about cell phones.

Take me for example. I travel way too much and know way more about hotels, restaurants, airlines and car services than is healthy. I consider myself an expert in these categories. And I'm the high value traveler every hotel wants.

If I am traveling to a new city, the absolute last thing I would do is go on line to some social travel site to check out hotels. Why? Because I consider those sites to be appropriate for grandma and grandpa who travel once a year -- not for me. As a self-defined expert I would never take a recommendation from one of those sites seriously. I've tried them. They're a joke. Search? Maybe. Social media? No way.

Most often, the place I'd go for a recommendation is to another heavy traveler.

I believe this same phenomenon occurs across lots of categories.

As the web evolves and is more democratized, opinions, comments, and conversations are less likely to be conducted among the knowledgeable and more likely to be conducted among the sociable. Experts in your category -- the heavy using, well-informed, high value customers -- may regard these conversations as frivolous and irrelevant.

It's still early days for social media. Take nothing for granted.

One exception to this will be the tech sector. I'd bet heavy usage in tech categories correlates to online jabbering. Geeks dig the web.

No comments: