Social Media Marketing, Brand Awareness: How Victoria’s Secret Cuts Its ROI Short

Logo TheMainStreetAnalyst 8713679455_e0394e3f7e_zFrom time to time I check on my social media marketing and brand management skills and knowledge to see if I can add something. When doing so, one of my tasks is visiting social media platforms of some of the big shots in the social media world and business to see what they do and how they do it. What comes to light is mostly confidence boosting, for me, many other social media marketing consultants and small businesses. Not so much for the huge brand Victoria’s Secret, which I today use as an example on “how to do better” in order to avoid the social media chopping block.

One of my sticks is, even the big brands make mistakes in social media marketing, brand management and in their attempts to accomplish better results. I use this more in support of the entire social media marketing industry rather than a bragging argument regarding my skills and knowledge about the subject. The support is needed because there are still many people out there that have doubts about what social media can do for brands, businesses and organizations of all trades. But this an entire different story and I have talked about that in the past and will probably talk about it in the future again.

Let’s have a look at my findings regarding Victoria’s Secret’s shortfall in brand management and revenue creation using social media. I came across their Twitter page on Tuesday, 08/13/2013 and some of the numbers caught my attention.

Victoria’s Secret has 2,500,000+ followers and is following only 1,100+ people. With all due respect of the brand, this is a waste of resources! Why so? Well, there are a couple of things to consider:

  1. Brand advocacy and influencer marketing. There are lots of people that re-tweet stuff of VS, but how about you get another 50,000 more people (this could very well be a much higher number) to deliver your message to their network, daily? Just think of the number of people 50,000 advocates or influencers can reach with tweets and re-tweets.
  2. Sales. If I calculate this with low multipliers, Victoria’s Secret is leaving approximately $20,000,000 in annual sales revenue on the table. That’s a good number and not even VS is big enough to let that one pass, especially if they don’t have to do much for it. Think ROI!

I admit that the sales number is difficult enough to calculate. I also admit that I don’t have a case that is comparable to this one, or has shown this calculation works. However, I do claim that the number is a rather conservative number. Using 50,000 people (or more) that are excited that VS is following them will create a big enough reach to make the sales number above a realistic one.

Some might think they don’t need to follow, they have enough business or recognition. That might be true, but I am sure that L Brands Inc., who owns Victoria’s Secret wouldn’t mind further growth. Besides that, doing business never means resting on past accomplishments.

What to take out of this? Well, first of all, not everything has been tried to make a final stand on whether social media marketing works as a major revenue creator or not. If not for revenue, it also shows that even the big guns with huge budgets forget the small stuff in the social media world and in their efforts to boost their brand.

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6 Responses

  1. Claire says:

    I’m very sorry, but I really do not understand why a brand following an individual on Twitter will turn them into an influencer, or a brand advocate, nor why this would mean a potential for $20MM incremental sales. Is there data to suggest that by merely following an individual, this will translate to increased brand mentions and sales?

    • theheidelberger says:

      Hello Claire! Thank you for your comment! First of all, I don’t believe there is any data available about the process. The reason for that is, nobody has ever tried it. I would be surprised to hear someone has even ever considered this.

      “Asking” for sales is a thing brands have only considered, and are now practicing, recently. In the past it was believed that “direct sales offers” and aggressive selling in posts on FB and Twitter wouldn’t work. The commonly used phrase was, social media is not ready for sales and is of better use for brand marketing and awareness.

      The estimation I made is as good as any other ever made, when it comes to measure a real ROI ($). The thing is, if I go to a brands Twitter account and I decide to like them, then I have an interest in them. At least at that time. If nothing happens, in many cases, I won’t go back. If I get a direct response from the brand, i will listen. If the response is good, I will act.

      VS has over 2,500,000 followers and is following 1,100. That is a waste of 2,500,000 resources. I agree, not everyone will buy or re-tweet, but many will. That’s why I am saying my estimation is as good as any other. I estimate the buy rate between 1- 5% a year, which could mean 25,000 – 125,000 people will buy. And, not all, but many will re-tweet an offer, which multiplies the number of potential sales. If you need data for this, this is nothing else than drilling down an email campaign, just with a better chance of success.

      I hope that helps. If you have further questions, feel free to contact me and we can set up a phone call. I am more than happy to explain to you on how to set it up. This is no rocket-science, someone just has to do it and I am sure someone will, soon.

  2. Claire says:

    Thank you for your reply. I work in social media, and haven driven millions of dollars in sales through social media marketing campaigns. So I can tell you it does work. It just takes smart tracking, like Omniture and Google Analytics to justify the campaigns and track sales.

    However, I don’t understand why you suggest not following individuals is a waste of resources. I can Tweet, reply to, favorite, or retweet anyone’s tweets, regardless of whether or not I follow them. For my brands, my team monitors any mentions of our brands on Twitter, using monitoring tools, so while I recommend following some influencers and people/celebs/associated brands, etc and replies to or retweets their conversations. I just don’t understand the rationale behind following everyone who follows you. I’d argue that VS’s 2.5MM followers = $2.55MM revenue, not the opposite. Also, for a lifestyle brand you probably will be even more selective of who you follow.

    I happen to think VS is doing an amazing job on social media. They are engaging and getting a ton of UGC from fans, content that most brands would die to have. I actually came across your article, as I was researching some of VS’s best practices, to get ideas for future campaigns.

    Just wanted to share my opinion with you. I always like a good debate :)

    • Vitus Feldmann says:

      Hello Claire! I know, I am late with my response and I apologize for that. Your last comment just went down with all the daily spam I receive every day. Somehow I didn’t make it to the bottom of the pit. Sorry.

      Thank you for the response! Like you, I do believe that VS is doing better on social media than most others and I also check regularly on what they are doing. Love the brand, love the product, love what they are doing. However, that doesn’t mean they are not wasting resources. As a matter of fact, in my opinion, they actually do. Lots of it! Since you and I commented on this the last time, they have increased followers by one million and have increased the number of people they are following by about 10 (??!!). With all due respect, that’s ridiculous and should not happen. I do see a lot more sales offers than I saw in the past and that is due to all the changes in social media perception (of what social media actually is). In 2012 I wrote an article (after wondering for two years why big brands don’t use social media for sales efforts) “Social Media is a sales driver, if you treat it as such”. Have a look at it here: http://www.themainstreetanalyst.com/2012/10/30/social-media-is-a-sales-driver-if-you-treat-it-as-such/ I got lots of heat for that one then. Turns out, I had more than a good point. I am convinced that I am right with that one too. As I said, some of the big brands will do it sooner or later.

      The article will help to understand why it is important to engage with followers and “likers”. BTW, what VS does in engaging on Twitter is way under the possibilities. I would actually go as far as calling them “misers” for not hiring some people to more engage with followers. Actually, with that Twitter account I would create more than $20,000,000 in additional annual sales. Go and prove me wrong :-)

      I offer you to get in touch with me, Claire. I will tell you how I would do it.

  1. August 20, 2013

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