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Is Social right for your business? It wasn’t right for Lush

Lush wiping the slate clean with Social Media

So, the big news recently was that Lush, the cosmetics company, have departed the social media space.

As a digital agency, you may be surprised to hear that I think that Lush may be just one of many brands that may seek to do this over time. I also believe, though, that Lush’s timing was about getting PR around that concept, as much as it was a genuine thought of we’re going to leave social.

They have probably generated more PR around the fact that they’re leaving the social space than they would have in terms of engagement in the social space itself of late.

Why did Lush leave?

Let’s look at why they might have gone –

Lush is quite a significant business with a global footprint. Hence, they probably do have both the resources financially and internally to manage a proper social engagement. But when you look at where social is going. The genuine reality is, it is no longer the cheap, free and easy platform that it once was.

To peddle your product going forward will become a challenge for big business and small businesses alike (Not that it is a challenge you can’t overcome but a challenge nonetheless).

But what a brand name like Lush does have is amazing owned-platforms in their database and website. It’s one thing that social media companies don’t want the average punter to know and that is that they own the real estate that you are conducting business on and you must pay rent to sit at the table.

So, Lush has done the numbers looked over their engagement rates and ROIs on email and website based campaigns and realised that it’s something that they can exploit to connect with their million or more customers.

Let’s look at social and what value it may provide to Lush versus the value of leaving.

I think the first thing is that, for Lush to compete at a high level as a brand would mean a huge investment in beautiful, well executed content. Now the question for a brand like that is does the brand awareness that they build in the social space have enough gravitas to pull customers into the stores, where they’re probably being led primarily by price, versus the value of their existing customer database, which is now quite extensive, in the ease of potentially converting existing customers to ongoing loyalty.

And I think when you look at it, they’ve made a decision that the cost of acquisition, and brand awareness is probably higher than their cost of maintaining or retaining clients through their loyalty scheme.

I think the second attribute, and this is one that many businesses really do need to consider is, websites have become the forgotten member of the family.

Think back 10 years ago or more when Facebook was, I guess in its earliest days, it wasn’t the tool for marketing that it is today. And most businesses invested heavily in having a really, really fantastic website, where they have a great deal of content for their audience.

Now, we do know that a huge proportion of the world’s population is hanging out daily on Facebook, Instagram, or even LinkedIn at a professional level.

Drawing that audience to your website, generically from a pure acquisition point of view, is not going to be simple for Lush but with the size and scale of their database… I think what they’re betting on is that they can engage people in their own environment, and have a free platform, in essence, to deliver whatever content they want.

And they don’t have to be concerned about trying to outsmart the Facebook or the Instagram algorithms to deliver that content to an ever increasingly noisy social environment.

So what’s the advice for your business?

The truth is that you have to look at it on an individual basis. So, if you have very, very limited opportunity to resell your product to a customer, or you have a very, very long repeat business cycle, then the database strategy, whilst valuable is probably too long term and not going to deliver you the results, you need to be a brand awareness and acquisition focused.

 

However, if you, like Lush, have a solid set of clients that are heavily engaged with your business, the reality is that you’re 60% more likely to resell a product to that customer, then you are to try and sell that product to a new customer .

The upshot is, if you are going to make an investment, once you have a word that I like to use gravity or momentum, then it can be really, really valuable to become more brand centric.

 

It’s important to note that Lush’s US wing definitely did not close their accounts

So what’s the future for lush? And is that strategy long term?

I think the answer is probably it’s a medium term strategy. In other words, and what they’re doing is, they’re moving away from social so that they can really spend the limited budget that they might have remembering their repeat business, but everyone has budget limitations.

They’re using that limited budget to hone in on what they probably have seen in the data as one of the most profitable aspects of their sales funnel.

In time, that funnel will deplete naturally, because all businesses face the reality that their customers drop away. And at that time, this strategy will need to change. But for the Intermediate Period, it is a very, very valuable concept for that business.

So what do you do?

Well, like I said above, I think you need to focus in on a couple of key things.

How big is your database?

how active is your database?

Do you have any data around the value of returning business?

If you do, and it is all very, very positive then your business may just want to follow in the footprints of Lush.

If you don’t, it’s not going to work. But even if you aren’t going to go down a database approach, I would still be hesitant to suggest that you withdraw from social altogether in the way that Lush has.

And the reason is because it will be much harder to switch it back on again, I refer to this idea of momentum, if you’ve really given up on the audience that was loyal to you in that space.

And another aspect that can’t be counted out is that we often don’t know what might turn the tide on our business, changes in your industry, changes in the market landscape could really, really impact very quickly on how loyal your loyal customers are to you. And so maintaining an audience on a brand awareness level is important.

So that’s our take on what Lush has done, on why they’ve done it, and a little insight into how you might be able to use that tactic or not use that tactic for your business. If you’d like to know any more information about how we could potentially build a strategy for your business based around these concepts.

Please feel free to get in touch with me or contact any of my team we’d be more than happy to help.

 

 

hero image by tony webster

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Written By: Michael Menzies