April 18, 2011

Victoria's Secret: Tops For Facebook Likes. Sales?

Let's assume that the Facebook era includes 2007 - Current.

Then during the Facebook era, two things happened:
  1. Victoria's Secret leads the "Facebook Likes" category.
  2. Victoria's Secret squeezed out a compound annual sales increase of 3.6%, barely better than inflation (see page 9 of the appendix in this report from Limited Brands).
Be careful when reviewing faux-metrics or vanity-metrics like "likes" or "influence" or "engagement".  In this case, with the most successful Facebook brand leading the way, total net sales are not following suit.

Also be careful when reviewing the marketing literature of the attribution community.  These folks will link sales to social media, and yet, as we see here, there's not much to look at in terms of sales and Facebook Likes.


Note at 2:53pm PDT:  Take a look at the ad that was served to me when I published this post.

11 comments:

  1. Hello Kevin,

    I completely understand you point of view on exaggerated Facebook influence and all the people linking some sale success only to social media.

    I would be aware of the judging VS's Facebook success or failure just by looking on sale numbers. I don't have any internal information about what goals Victorias Secret had/have/will have with their Facebook audience, do you?

    Maybe their goal isn't boosting sales, but saving some marketing money. Maybe their goal is to not let a competitor to gain this kind of web influence.

    ReplyDelete
  2. You may be right, no arguing with your comments. If this strategy was met with a significant reduction in marketing expense, then I'll sign up for it!!

    Or it may be that social media doesn't deliver much of a sales increase. Not many people want to hear that.

    ReplyDelete
  3. How does the external factor of the recession factor into this? Does a comparison to inflation somehow effectively eliminate that variable, or would a comparison to competitor or category top line growth in the same period make more sense?

    ReplyDelete
  4. Yup, a recession hurts ... of course, the start of the period was a super-heated timeframe where sales were growing abnormally fast, so if you are going to ding the analysis for the recession, you have to account for a superheated economy as well, and you have to account for 2010 when growth was above average coming out of the recession.

    That's why I chose a multi-year cumulative annual growth rate, trying to smooth out positives and negatives.

    ReplyDelete
  5. Anonymous6:42 AM

    True, social media does not drive big sales numbers. A few percentage points at best for sales tracked directly from a social media channel to a site. But that's not what's important. Its a digital call center. Its about customer service, not sales. Why don't people ask the same ROI and sales questions of a call center? If a call center wasn't contributing enough sales, and a company decided to shut it down, what would the impact of leaving all of those customer issues and questions not dealt with? Whatever metrics and business justification that are used for a call center should be used for social media channels. Sure, social media has other perks, like a broadcasting channel about new products, helping keep the brand top of mind, etc. but its customer service first, everything else is a bonus.

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  6. If social media experts sold their craft as a modern call center, then fine.

    That's not what happens. It's a craft that is sold as a free replacement for advertising. Therefore, it must be held accountable for driving sales that would have been driven by advertising.

    ReplyDelete
  7. Anonymous7:10 AM

    aha, there's the root of the problem.

    ReplyDelete
  8. Rusty4:34 PM

    Great post...someone finally noticed the emperor has no clothes. I am continually baffled and amazed at compmanies that are constantly "fishing" for likes on Facebook, as if that will do anything.

    The companies that appear to be most successful with Facebook are cpompanies that use the social network to engage in a conversation with customers. Those conversations can drive product development, enhance customer service, but from what I've seen, do not generate sales in large volumes.

    ReplyDelete
  9. Anonymous8:06 AM

    FWIW:
    I liked Steam on facebook and saw their daily deals on my newsfeed. They now have $15 that they would not have had before. In a week.

    I liked Cake, the band, on facebook even though I'm not a huge fan of their music. They post interesting news links that reflects their political leanings. I'm now more interested in them and will seriously consider purchasing their albums to replace my illegal collection of their music.

    I won't like a large corporate like VS, or even something manly, because my initial gut feeling is that I'll just get inundated with links to sales.

    My father, a diplomat, hired a social media consultant not to drum up sales, but awareness for a campaign he is promoting at work.

    Plus, people "like" things on facebook that they already like. Hence, sales won't be affected a whole lot since they are already hooked. Its just a bonus fan service.
    Where I feel social media fails is in getting NEW sales.

    ReplyDelete
  10. Anonymous1:34 PM

    Victoria Secret is probably not the best example to use as many men probably "like" the page for reasons other than the brand!

    ReplyDelete
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