We Play in Traffic

If your retail business is on a calendar fiscal year, it’s that time again: budget season.  And this year there’s this roaring fire called social media that you can’t ignore.  But the question my clients (most of whom have had cobbled-together efforts to date) are asking me is – what should I put in the budget for social media?

The most correct answer can only be provided by answering the question – what are your plans for social media in a retail marketing mix? Realizing that for many clients, initial budgets are due before plans, that question doesn’t solve their need.

Here’s what I’ve been telling retailers (and other) clients, and in this order:

1. At least one full-time person (or the money to “outsource” a full time person if head count is frozen).  Not an expensive person.  Perhaps a young person that already uses social media personally.  Maybe $40K (double that with benefits).  Social media is an ongoing, evolving conversation and someone on your end needs to stay in the conversation on a regular basis to make it work.  Their job is to not only participate and manage the social media dialog on your behalf, but to grow the people in your social media base.
2. If you can’t possibly do that (like reducing something elsewhere by that amount), see if you can conscript an existing player from customer-service.  Wells-Fargo/Wachovia Bank is a retailer makes great use of social media by treating it as an extension of customer service.  Their social media people even have posted hours.
3. Think seriously about doing some social-media-only product promotions.  So, if there is a margin cost in doing these, that may need to be included.  At least once a month, but maybe even more frequently.  Airlines liked Southwest and United have created “Twares” – Twitter-only promotions that essentially are sales of perishable last-minute seats.
4. Add some social-media-only non-product promotions.  Things that support your brand idea and would be rewarding to the followers and fans that have signed up to communicate with you.  These can be store shopping sprees, trips, contests, coupons.  $5K a month sounds like plenty for most retailers I know.  Retailer JC Penney has a photo contest that gives an example.
5. Produce some videos for YouTube.  This can be hit or miss.  H2O Plus got 20,000 views from a video that a customer put together for the cost of some H2O product.  But another retailer lovingly posted a somewhat gratuitous video about their brand that no one has ever seen.  Give your team (and/or agency) an assignment of coming up with something YouTube-worthy that would cost no more than $5,000.  Tell them best idea wins dinner on you.  Cost: $5,000, plus dinner (but again, what you think is wonderful may not get viewed).
6. Engage in something of high value to your fans and followers.  A handful of retail brands that are really engaged on social media participate in secondary efforts – Whole Foods with the Whole Planet Foundation, Starbucks with The Food Project – that attract an audience, create a reason for ongoing interest, and reinforce their brand idea.  Harder to budget; maybe $100K?

If you’re a retailer looking to get engaged with the audience on Twitter, YouTube, Facebook, MySpace and more, it’s hard to do #’s 3, 4, 5 or 6 without budgeting for #1 or 2.  Start there.