Columnists George Prout Applied Marketing 101: The Social Media Marketing Model

Applied Marketing 101: The Social Media Marketing Model


There is a revolution taking place right now in the way that retail businesses communicate with their customers. This revolution is so extraordinary, and so unprecedented, that most of us are still just beginning to understand its implications. In order fully to understand what’s happening, here’s a bit of background.

There are a group of arithmetic functions that mathematicians refer to as “exponential.” They can be represented graphically as curves that at first look like an airplane taking off, but then look like the airplane has turned into a rocket, shooting almost straight up into the sky. It’s important to understand that the human brain isn’t well equipped to grasp the incredibly enormous numbers that these curves yield.

For example, consider the classic fable concerning the inventor of the game Chess. When he taught the game to the Emperor, the ruler was so delighted that he offered to grant the man any wish that he might make. “Sire,” said the chess inventor, “I am but a simple mathematician. I only wish for a grain of rice for the first square of the board, and for the quantity of rice grains to be doubled for each subsequent square, until all of the squares have the appropriate amount of rice.” The Emperor was mystified by the request, because it seemed so modest (a few handfuls of rice?) for such a great achievement, but he agreed immediately.

So... how much rice did the Emperor now owe the Inventor? Remember, the Chess board consists of 64 squares. This means that the solution to the problem is 2 to the 63rd power

...which yields the number 18 followed by 18 zeroes. If you like the Latin formulation for large numbers (Millions, Billions, Trillions, etc), you would say that this is 18 “Sextillion” grains of rice. This is not only more than all of the rice grains that have ever existed. If we assume that a grain of rice is 0.2 inches long, and we were to line up this many grains end to end, the resulting rice “highway” would reach from planet Earth to the nearest star system, Alpha Centauri, and back again... the distance that light travels in 9 years (at 186,000 miles per second). That’s a whole lot of rice!

According to legend, when the King realized his incapacity to honor his rice agreement, he offered the mathematician his prettiest daughter in marriage instead, and they presumably lived happily ever after - and undoubtedly had very bright children!

Now, what does this all have to do with business, in the context of retailers communicating with their customers???

Plenty! Because there are important examples in the real world of this mathematical effect that I will call “Compounded Doubling.” These examples occur when we have networks of friends, because the things that we say to these friends can suddenly travel to very large populations - especially when what we say gets a little help from the Internet. Specifically, suppose that I tell something to two friends, and they then each tell this to two of their friends, who in turn then tell this to two of their friends. Do you see how this example of doubling resembles counting rice grains?

This real world example of compounded doubling produces the same type of exponential function that we were examining above, with the same incredible numbers yielded after only a few doublings... and explains why some marketers believe that Facebook (and its Social Media counterparts) potentially represents the most powerful business tool that has ever been invented.

So, everyone in the jewelry industry has embraced the notion of social network marketing, haven’t they? Well... kinda sorta. And is anyone getting big results yet? Not really, you say?

You’re mostly right, but not because there’s something wrong with the Social Media Networking Model. You’re right because almost no one in the jewelry industry has really followed the model through to its logical conclusion.

I speak with jewelers all the time whose Facebook pages possess 400 to 600 “Fans.” This tells me that they initially did a good job of getting their message out to a core group of “Friends,” who “liked” their Facebook page, but then at some very premature point, whatever message they were sending about their store ran out of steam. For some reason, the doubling stopped being compounded, because the final group of “Fans” failed to tell two new friends.

Fortunately, this is totally fixable. The problem is that the message that the jewelry store’s friends were repeating was insufficiently compelling to prompt the final, outer circle of fans to repeat it, which leaves the fan base at way too small a level to be an effective marketing tool.

How many Fans does a jewelry store need to maximize the potential value of Facebook? Here’s a rule of thumb I like: you should have an absolute minimum of 1,000 Fans for every 100,000 dollars in annual store sales volume. Do you have a million dollar store? Then you should have a minimum of 10,000 Fans. Two million dollars? Then you should have at least 20,000 Fans.

Remember, average per capita jewelry consumption last year was about 200 dollars, so if you have a 2 million dollar store, you’re asking your universe of 20,000 fans, who spend about 4 million dollars on jewelry annually, to spend half of it with you (what marketing experts call “Share of Customer”). Facebook can become a potent weapon for your future marketing initiatives, but only if your Fan count is high enough to drive sufficient traffic and sales.

So, if you’re like most retailers, you probably need to set a much higher objective in the number of Fans your Facebook page possesses. How do you accomplish this? Like real estate, there are three key elements to ramping up your Facebook fan base:




We’re currently working with a number of jewelers this spring to rapidly elevate their Fan bases through the use of a cute idea called the “Most Lovable Mom” Contest. We’re inviting Facebook Fans to post their Mom’s picture, and then have their friends vote (which also requires “Liking” the Facebook page) for the Mom of their choice. The Mom with the most votes wins, and everyone who posts a picture receives a 25 dollar certificate good on anything in the store.

I’m expecting many sons, daughters, and husbands to be contacting lots of their friends, to get them to vote for Mom! When these folks visit the retailer’s Facebook page, we’ll be waiting with open arms, capturing their data, and getting “Liked” in the process. In essence, we’ve provided a wonderful incentive to get the outer layer of Fans to tell lots of their friends to visit our page, resulting in what we hope will be a huge increase in the Fan base. I’ll report on our results in a future article.

This is just one example of a way to build your fan base. There’s no right way to do this, to the exclusion of other ways. What counts is that you provide large groups of people with a good reason to send their friends to your Facebook page.

In summary, this may be the most important marketing initiative that you can undertake, especially when you consider that your Facebook base will skew towards the younger side of the demographic, which augurs well for the bridal component of your revenue stream, and also yields longer relationships with higher lifetime customer value.

Class dismissed!

George Prout is Vice President of Sales and Marketing at Gems One, and can be contacted at 800-436-7787 or at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .


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