November 23, 2009

Capitalizing on Social Commerce The exponential growth of social media sets huge expectations for social commerce. Marketers, reluctant to crash the karma of evolving social networks, have long thought that the channels facilitating conversations, interactions and personal CRM could easily facilitate and probably accelerate eCommerce. Most brands have taken a wait-and-see approach. The conventional wisdom, till now, has been that social media is for branding and a tool to to monitor the conversation rather than an active sales channel. Most marketers have silently done the math on social networks hoping that connected networks of friends could be cost-efficient viral media channels for merchandizing products and services. With an average of two social media accounts per person, an individual with with 50 or more friends, depending on their willingness to tout a favorite brand, product or service, could potentially message as many as 100,000 other people. This potential media multiplier makes marketers salivate. But most have restrained themselves fearful of alienating potential customers or of provoking a negative backlash. Notable exceptions are the Dell Outlet who reports sales of $3 million in computers and Whole Foods who hawk weekly specials on Twitter and 1-800-Flowers who set up a store or Chick-A-Fil who gave away 25,000 coupons for a free chicken sandwich over five days on Facebook. New survey research by Performics and ROI Research and by Razorfish suggest that social media users not only interact with brands and talk up brands, but they are actively looking for deals, promotions and coupons on YouTube, Facebook, Twitter and others. The Performics and ROI team surveyed 3011 social network users and found that 4 in 10 talked about brands on social networks and that 1 in 4 have gone directly to an eCommerce site after learning about a new product or brand in social media. With slight variations, the data holds true across the platforms, though Facebook seems to have twice as many users as MySpace, YouTube or Twitter and six times more than LinkedIn, MeetUp or Flickr and others, which have more of a specialized use pattern or niche focus. The leading messages that resonate with consumers seem to be coupon downloads, alerts on special deals, offers to participate in sweepstakes or win redeemable points or online currency. Scott Haiges of ROI Research drew the summary conclusion. "Consumers are open to receiving promotions and offers from brands that they're connected with through social networks." This understanding was validated or confirmed by Razorfish's 2009 FEED Report, a survey of 1000 consumers; each of whom has a social media account, has spent $150 online in the last six months, has visited a community site and consumed or created some form of digital media. Between 3 and 4 of every ten respondents said special or exclusive deals is the main reason they follow brands in social media networks. Sixty-four percent said they made their first purchase from a company as a result of a digital interaction and virtually everybody (97%) said a digital interaction influenced brand affinity. Forty percent had "friended" a brand and 70 percent participated in brand sponsored contests or sweepstakes. Garrick Schmitt, the editor of the study, figured out "people want deals." So the key to engagement on social properties comes down to old-fashioned direct marketing techniques. And these new platforms appear to work like their older counterparts with a couple of exceptions. These exceptions are, according to David Armano of the Dachis Group writing in the Harvard Business Daily Alert, faster uptake and greater mobility which creates the possibility of dayparting. He argues that adoption will increase and deepen but be mitigated by a growing trend among enterprises and organizations to ban social network use at work. This could create distinct daytime and nighttime usage patterns, not unlike broadcast TV, that attracts different audiences of prospects and customers and prompts different creative and messaging strategies during different time periods Similarly the increasing penetration of smart phones and the lower cost of bandwidth will spark greater mobile access to and use of social networks and video content. This will also have implications for message development and propagation as well as audience segmentation. And as these phenomenon spread around the world and get translated into multiple languages, more and more people will buy stuff realizing the dream of social commerce.
B2B Social Media Schizophrenia B2B marketers are schizophrenic about social media. On one hand they've been doing social media, offline and using older technology for years. On the other hand they are standing on the sidelines watching the action and trying to decide if or when to join the fray. The fundamentals of social media -- networking, user generated content, content sharing and real-time interaction -- has been going on in Listservs, user groups, chat rooms and branded and industry publication and association sites for years. Some of the earliest users of the web, were B2B marketers eager to use the new technology to automate and accelerate conversations and discussions among experts and specialists. so its surprising that they have been reluctant to embrace the new players. But I suspect there will be an explosion of private and gated online communities in the B2B space soon. Pioneers like Sermo and VuMedi are gathering doctors, vetting them and offering platforms for robust, specialized conversations away from public eyes and ears. This pattern will be repeated over and over again in the next few years augmented by bandwidth to support video, animations, limitless numbers of real-time interactions and enhanced security. This will continue the migration of offline B2B communications from conventions and trade magazines or journals to webinars, podcasts and specialized community sites. The first wave of this transformational shift is documented in's 2009 Business Social Media Benchmarking Survey. Sixty-nine percent of those responding participated in webinars. 62 percent read user-generated reviews or ratings and checked out prospective partners, vendors and competitors' web sites or company blogs. More than half searched for company information on social media sites, participated in an online B2B forum or read or downloaded content on a 3rd party content site. This survey of 2948 business-to-business executives discovered that 65 percent of respondents use social media as part of their normal work routine, even though 54 percent of the companies surveyed block Twitter and Facebook in the workplace. The usage of social media runs up and down the corporate food chain from line managers to C-levels and spans virtually every department, not just the marketing and external facing guys in organizations of every size from micro start-ups to global MNCs. The average respondent used six different social media resources in the course of doing business. So why are these guys so antsy about using social media to marketer their goods or services? Three reasons: 1) Its new and its not worth fighting over. Its not in the budget, it's hard to compare with either conventional best practices or existing programs and there's no percentage in risking your neck for social media. 2) There's little evidence that social media buzz yields sales. In a B2B environment where lead generation and nurturing shepherd groups of prospects through an extended buying cycle, there's little reason to believe that social media help close. The value, or so it seems, lies on the front end of building awareness or preference or maybe validating an initial shirt list. So this makes social media a "nice-to-have: but not a necessity. 3) Lack of Control. Anyone can comment, add ,edit or pipe up. This takes a tailored sales process and turns it into a free-for-all where marketers can no longer control the ball, the pace of play or the sequence of activities. Social media is way outside the comfort zone of B2B sales and marketing people. But the good news is that B2B players are experimenting with these emerging media. Seventy percent maintain accounts or profiles in social media spaces. and sixty percent maintain blogs or monitor their firms online reputation. More than half, of the respondents, use Twitter, monitor reviews, advertise on social media sites, comment on social media sites or answer questions in online forums. As a rule the smaller companies are the early adapters, but everyone is pretty much making it up as they go along. The dominant expectation is that social media will produce web site traffic; prospects who are open to engaging with business-to-business brands. The B2B arena is a rich landscape for social media. In the New Year look for several breakout efforts to harness and use these channels which will be copied extensively.

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

The Typepad Team

Recent Comments