Some background first. I’ve been working with digital strategy and communication for more than 10 years. Among other things, I was the person behind Maersk’s success story on social media back in 2011-13.
I have always believed – and have been quoted saying – that you should not use social to sell, but to communicate. You can sell your products elsewhere, via platforms where it’s what people actually want from you. Via your newsletter, for example.
But things have changed. Social media is not social media any more. From a marketing perspective, social media is first and foremost paid media enabling companies to narrowly target their messages to different target groups.
Even so, the whole field of social media marketing has been struggling and still is struggling to show that you can use social ads to grow your business. For example, it’s been pointed out by Augie Ray that there is no correlation whatsoever between social media usage and S&P 500 companies’ stock prices.
And in the past I’ve been giving this presentation on why social media marketing doesn’t work.
For sure, social ads have worked for building awareness (like with Maersk). But in terms of actual sales it has not been possible for companies to maintain a decent ROI beyond a daily spend of a few hundred dollars. When you try to increase your reach, your cost per conversion goes up.
And in comes an e-bike…
So when a couple of friends of mine asked me if Jesper and I (i.e. Wichmann/Schmidt) could help sell their e-bike MATE through social ads I was a bit hesitant. They already had campaign material made, they had a very small marketing budget left, and now they were about to launch on crowdfunding platform Indiegogo.
I’ve tried to make social ads convert into sales many times before, but each and every time it has proven to be close to impossible. But I got inspired by how they talked about the bike and decided to give it a go. I’m glad I did.
The first couple of weeks only showed mediocre results. I tested different platforms and messages, different target groups and geographies. And many other things.
Then I thought: “Maybe I don’t know anything about these people”. And so I decided to forget about our preconceptions about target groups and buyer personas – and instead develop a simple algorithm in a spreadsheet combining people’s interest, the cost per reach and the cost per click. With this algorithm I then revisited existing data to identify the best performing demographics and also started targeting a much broader audience.
Next to this I developed an ‘intelligent’ ads structure full of triggers enabling me to customise messages based on people’s last actions (or no-actions).
In a way, it works like a spiders web. First you need to find the best location for the web. Then you need to build it the right way to only catch those who really matters to you. And finally, you need to entrap your prey in the web.
$1.5M in 4 weeks
I’ve been optimising this model since then, improving the ROI day by day.
In total, we’ve now spent $50K on social ads. Which has resulted in MATE now having raised almost $1.5M to start production. More than 1,500 e-bikes have been ordered.
The past 3 days have resulted in a daily $125K sales revenue with a daily $2.5K marketing spend. If that’s not social media marketing at its best I don’t know what is.
Of course, some of the sales would have come anyway, with or without the social ads. But during the campaign period there was one day where the ads stalled for many hours (due to a worn out credit card), and on that day the sales plummeted and almost stopped entirely. I estimate that between 80-90% of the sales comes from the social – either directly or indirectly.
In recent weeks, I’ve thought to myself, “I think I can sell just about anything if I want to”. And whenever I’ve told people about the e-bike success they’ve almost started drooling.
That’s why I’m writing this. To inspire. And to let people know that I’m up for doing the same again for other companies.
One thing though: It has to feel right to be right. The success of a project like this is not just down to the algorithm and the ads structure, but also to the hard work and curiosity that you need to put in. So it simply has to inspire me first.
Nevertheless, feel free to present your business needs/ideas to me. It might be just right, and I’m up for trying one more time…