Social media and the multiplier effect

Ian Lurie Sep 14 2010

Marketing nerdiness alert! This post has some heavy-duty marketing geekination in it. You have been warned.

At last night’s SEMPDX presentation I talked about the multiplier effect and social media. Here’s the multiplier effect as I defined it:

The multiplier effect: Each additional quality friend or follower in your network increases the value of all other people on your network.

I came up with this concept whilst grinding my teeth to nubs over demands like this: “I only have 500 followers. My competitor has 50,000. Get me more followers!”

See, most social media campaigns devolve into spamfests. It’s like the early- and middle-age of e-mail marketing. More = better, therefore let’s send crap out to every sucker we can find. It’s accumulation marketing [blast from the past alert]. And it never works for long.

Where social media spam comes from

Spam – particularly social media spam – comes from a long-time belief that a bigger network of potential customers is always better.

That belief comes from a traditional marketing formula: Add another person to your network of potential customers, and best case is that each member of that network keeps the same value.

Say I have a network of 1,000 potential customers, with each customer worth $1. Then I add another person to the network. Conventional wisdom says that the best I can hope for is that each network member remains worth $1. It’s likely that, as I add more people, the background noise and accidental addition of people who have no interest in my product at all will reduce the value of every individual network member:

individuals decrease in value

So, goes conventional wisdom, if your plan is to grow sales and customer base, you need to expand your network exponentially to make up for the lost value. A massive network is always better than a small one, and individuals are worth less and less.
That’s why otherwise intelligent people still click on messages like this:

more followers spam

And it’s why I crack molars.

But it doesn’t add up. If a massive network is always better, why is it that someone tweeting to 50,000 people gets me 3 clicks, and someone tweeting to 5,000 gets me 10,000 clicks?

Go figure.

The multiplier effect: Individuals mean a lot

The answer, at least for me, is all about amplification.

If you add another person to your Twitter followers, or Facebook, or your house e-mail list, that person adds to potential amplifiers of your message. That’s because all those Twitter followers, etc. can talk to each other, as well as to people who haven’t yet joined the community of People Who Follow You.

When they talk to each other, they reinforce and strengthen that community. Even if they don’t talk about you and your brand, person A still remembers that person B is the Person They Met On The Conversation Marketing Facebook Page.

In this model, each person you add to your network increases the value of every other person in that network:
the multiplier effect
That’s the multiplier effect. More is still better, but quality is more important. Which raises the one constraint on multipliers:

The ceiling

The graph above will never go straight up. Nor will it loop back on itself. That’s because there’s a ceiling for any network: The number of people who will become quality members. You can’t grow a network infinitely.

Practical applications

I know, I’m starting to sound awfully academic. Who cares about this stuff?

You do.

The multiplier effect means:

  • You need to take care of every person you connect with. Stay in touch with them. Answer their questions. Don’t blow them off.
  • You should be picky about who you invite to follow you. Don’t be a snob. But don’t waste bandwidth inviting random people, either.
  • You must reward loyalty. If folks stay in the community, make them know you appreciate it. That could be as simple as a ‘thank you’, or as fancy as a loyalty program.
  • You can never, ever abuse your followers with spammy messages.
  • Every lost community member decreases the value of every other community member. Ouch.

So, you really, really need to:

  • Maintain a social media rolodex. Use CRM software or something similar to manage your contacts. I recommend Highrise as a great, simple solution.
  • Work in communities where you can sincerely contribute. Don’t start writing and communicating with people on topics that make you cringe. For example, I probably shouldn’t work on a Red States are Great blog.
  • Answer blog comments. Contribute on other blogs for real. “Great post!” is not participation – it’s link-grubbing butt-kissing. And the only people who’ll act on it and throw some love your way are other link grubbers.

Hopefully, this all makes sense. I know this is a bit touchy-feely. But, if you can get the multiplier effect clear in your head, everything else will nicely fall into place.

I’d greatly appreciate feedback on this piece. It’s not the typical Conversation Marketing fare. I know a lot of folks will say ‘this is too academic’, but I believe pretty strongly you have to understand how this stuff really works if you want to get good at it.

tags : conversation marketing

4 Comments

  1. Interesting article Ian. Anyone who this article is too academic should learn to appreciate this way of thinking: It’s the foundation of economic thought.
    While I appreciate your approach, and I certainly understand your motives, the graphs seem contradictory.
    You state that as you add more people to your network, the net value of each individual person decreased by some arbitrary amount: This is essentially the law of diminishing returns
    http://en.wikipedia.org/wiki/Diminishing_returns, and is an argument for why spam following everyone is ineffective.
    However, the next few paragraphs and the graph that explains it basically argues the opposite! “In this model, each person you add to your network increases the value of every other person in that network”
    Therefore increasing your network increases the value of everyone in it…nullifying your previous assertion.
    I’m probably just not understanding the point you’re trying to make: Some clarification would be lovely.

  2. Excellent post. A little more detail isn’t a bad thing at all! I am fully with you in that it isn’t really about numbers. Certain folks on Twitter are going to hit a “ceiling” of useful followers, and adding more spammy followers isn’t going to help the situation. Also worth noting that no one can pay individual attention to thousands of followers, which negates the benefits of social media anyway. Much better to cultivate a smaller, more enthusiastic audience who will help you with whatever your goal happens to be. More followers of this type are always welcome.

  3. Great post. Don’t think it was too academic at all. These days the capabilities to track and measure that digital allows for means that the ‘theories’ outlined above are not only relevant but necessary!
    It’s interesting that those most guilty of artificially inflating their networks (apart from recruitment consultants and spammers…) are actually internet marketing professionals and so called social media experts. A case of do as i say not as I do.
    Interestingly, in some instances people are actually I suspect only looking for social proof. That is, they are only seeking credibility by showing that they have a large following on twitter for example and not actually using the former as a tool in itself.

  4. Ellen

    Ellen

    I read your blog about the quality versus quantity of Twitter followers when it came out. This post seems very similar to that one, except with more graphs and generalized to include all social media. I like reading information that is something that can be implemented.

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