The hierarchy of effects is a term used in traditional advertising to track the success of an advertising campaign. The notion underpinning the hierarchy of effects is that consumers don't just buy products. They have to know they exist and like the product before they will buy it. Advertising, BSM (before social media) was the most pervasive way consumers learned about brands and started to like them.
Of course, ASM (after social media), consumers have lots of ways to learn about brands and like them -- most notably through word of mouth from their network. If I see a friend's post about a movie or restaurant, I figure if they like it, I might, too so I try it. So, now success relies on getting consumers in your social network and motivating them to spread your message.
This leads to a hierarchy of effects that looks more like this:
Moving Down the Funnel
More than just a way to visualize how folks fit into your funnel, the hierarchy of effects proposes consumers have more benefit to the organization as they move down the funnel -- and the shape of the funnel illustrates how you move smaller numbers of folks to each level in the funnel.
In the attraction phase, folks may know about your brand and may even like your brand, but they're not engaged with the brand. Maybe they hit the like button on Facebook, but that's it. They're not much value to your brand until they move down the funnel.
At the trusting phase, consumers are more engaged with your brand. Now they're commenting, sharing, and liking posts, which spreads your message to their social networks and pours more people into the top of your funnel. This creates value for your brand since the more people who go in the top, the more people flow through to the bottom.
As consumers progress to the community stage, they are increasingly engaged with your brand. Now they not only share your message, but help make your brand better by suggesting new products, ways to improve existing products, and helping move people in their network through the funnel by engaging them. Seth Godin calls this a tribe -- an apt analogy.
In the loyalty phase, consumers create huge value for your brand. They defend it when others in their network criticize you, which is hugely valuable since evangelists are objective, not employees.
Evangelists also actively promote your brand to their network, not just spreading the message, but advocating for your brand -- they're like a cheerleader pumping everyone up to buy. Finally, they help folks who need more information -- answering questions, providing information, suggesting solutions ...
Hierarchy of Effects and ROI
ROI (Return on Investment) is the holy grail of business and measuring ROI in social media is a top problem noted by social media writers. But, more important than measuring ROI is actually driving sales and the hierarchy of effects model help you do both because it focuses on moving people down the funnel, thus generating more sales.
The hierarchy of effects allows you to set goals, which is the first step in planning action. So, if I set a goal of getting 20% more folks to join my community, I can focus on actions directed at that goal such as engaging my social network, reaching out to folks in related communities, etc. It aslo gives me a metric to track my success -- did I reach my goal in the time frame I hoped? All I have to do now is look at analytics from Facebook, Google, or other networks to see if I have a bigger community now than before. Or I can look at newsletter subscribers to see it that increased by 20%.
Now, instead of focusing on driving folks to buy my brand, which may get a little spammy, I'm focused on moving people down the funnel. It forces me to focus on those actions that create long term benefits for my organization, such as seeking out folks who talk about my brand to some special event or backstage tour. Now, they're more motivated to share and encourage their network to try my brand. Plus they have more information. I'm moving them from engagement toward evangelism.
I encourage you to use the hierarchy of effects model in your social media strategy to focus efforts on moving consumers down the funnel, making them advocates for your brand. You also need to include efforts to nurture consumers already in your funnel to share with their networks through tools making it easy for them to share, but also by singling them out for recognition so they continue sharing.
Angela Hausman, PhD