If Not Sales, What is Social Media Good For?
There is a battle being waged by small business owners, marketing professionals, researchers and Internet futurists alike over the value of social media in terms of its effect on commerce. There is even a term for it -- social commerce.
Ample data exists to suggest that the effect of social media on ecommerce sales is insipid. For example, in a survey on social media and ecommerce conducted by Practical Ecommerce, more than 77 percent of respondents said that purchases made via social media, either directly or indirectly, amounted to less than five percent of total sales.
Research stalwart Forrester has weighed in on the side of social media as a non-factor in ecommerce, at least where the social network Facebook is concerned. In a newly-published report, Will Facebook Ever Drive eCommerce?, Forrester analyst Sucharita Mulpuru said, "In spite of the fact that hundreds of millions of people around the world have Facebook accounts, the ability of the social network to drive revenue for eCommerce businesses continues to remain elusive."
Okay, so take sales out of the equation. What marketing benefits does social media have to offer, if any?
Cultural Trends Mandate the Need for Social Media Engagement
Before I talk about specific, non-sales related benefits to social media, let me address some cultural trends that mandate its use.
In what I will refer to as the "Madmen" era - the sixties - advertising was largely a one-way broadcast medium. With only three major television networks and fewer radio stations by comparison, getting an advertising message out to a large audience was much easier.
Contrast that with today. The average TV viewer has access to over 80 channels. Those to subscribe to expanded packages have access to many more. Radio is only a descriptive term that includes terrestrial, satellite and Internet-based broadcasts. Despite the rapid decline of the newspaper industry, print media is bursting at the seams with all kinds of niche publications.
Not only that, people are no longer passive consumers, but active participants in sharing information, insights and opinions about brands, products and services. And they are using social media as conduits to channel that information.
Instead of paying attention to marketing and advertising messages, people are talking with each other and their conversations carry influence. Ratings and review company BazaarVoice reports that consumer reviews are "significantly more trusted" than information that comes from marketing or advertising.
What we are dealing with is an insurgency among consumers that mandates the need for brands to be engaged in social media. We must have a voice in the ongoing conversation if we hope to continue to influence buying decisions.
Benefits to Using Social Media Apart from Direct Sales
In an article published here at Practical Ecommerce in February 2009, Social Media as a Marketing Tool, senior contributing editor Armando Roggio stated that an "integrated social media marketing strategy can help you and your ecommerce site increase brand visibility, improve customer loyalty, and gain important insights about the markets you serve." Let's run with that.
Increase Brand Visibility
Though building brand awareness is sometimes considered to be of relatively little value when compared to direct sales, there is no doubt gaining top of mind awareness with consumers is vital.
Major brands have spent billions trying to achieve that "franchise in the mind" with consumers. For example, when you think of soft drinks, what jingle comes to mind? In my day, it was "Things go better with Coke." How about insurance? Remember the slogan, "You’re in good hands with Allstate?" How about buying books online? Do your fingers automatically start typing Amazon.com? And so it goes.
Social media can serve this purpose in that it facilitates a dialogue between the brand and the consumer. Through the kinds of interpersonal interaction that social media affords, consumers get to know, like and trust you. Continued, long-term engagement with friends, fans and followers can lead to the kind top of mind awareness that causes them to think of you first. Not only that, if consumers perceive the information you provide has value, they will share it with friends.
Improve Customer Loyalty
Social media can improve customer loyalty because it fosters the building of community around the brand. As a result, your job is to spend less time trying to sell, and more time doing those things that continue the community-building process.
Find out what engages your fans and give them more of that. Where Practical Ecommerce is concerned, not surprisingly I have found that our content is what drives engagement and builds loyalty. Each time content is syndicated to social media channels where we have a presence - Facebook, Twitter and LinkedIn - we receive a fair number of tweets and retweets, page views and, increasingly, comments.
It is not uncommon for followers and fans to express how much they appreciate the caliber of the content we produce. Even Klout, the so-called "standard" for measuring influence within social media, states, "Your audience relies on you for a steady flow of information about your industry or topic. Your audience is hooked on your updates and secretly can't live without them." Take that for what it's worth, but it is an indicator we have a loyal following and social media has only served to extend the reach.
Gain Marketing Insights
There is perhaps no better avenue for knowing what the consumer thinks about a brand, its products or services than through social media, for it provides an unfiltered, unfettered grassroots window into the mind of the consumer. In fact, monitoring, measuring and managing what is being said about a brand has become a burgeoning industry.
It follows that, if people are talking with each other and what they have to say carries influence, then it behooves marketers to become good listeners. I often say, "Listening is the new marketing," for it is the onramp to engagement.
If we know who is doing the talking (influencers), what it is they are saying (topics), and where they're saying it (social network platforms), then we know who to talk to, what to talk about and where to carry on that conversation.
Even if consumers are not yet using social media to make purchases, that does not mean merchants can or should dismiss its impact where increasing brand visibility, building customer loyalty and gaining marketing insights.
What other non-sales related benefits do you thing social media has to offer?
Great article and a reminder to the CEOs out there looking to monetize social media directly - right now it's an indirect part of the marketing mix but may in fact be a major sales channel in the near future - don't disregard it but don't rely on it to solely build your customer base or brand.
However a serious cost-cutting benefit I've realized for myself & clients alike is the impact on a positive customer service experience. Giving customers the ability to interact with us directly via Facebook & twitter has reduced the number of calls to customer care agents hence freeing them up to close sales in progress. Additionally, the instant gratification of social media has "saved" a few orders and thwarted a return here and there.
I totally agree.. My Ph.D results showed that Customers who find a vitural community useful (in term of content, interactions, communication) are those who are most loyal to the community and to the brand who hosts this virtual community... They recommend more the brand, and do more cross bying on the website of the brand... and it's in the financial industry, a rational one, not only in the experiential sites...
Wapr Website says:
Nice write up Paul.
In addition to what you have written (i.e Improve brand visibility, Improve customer loyalty and Gain marketing insights), I would like to say that the marketing and sales effectiveness can be improved amongst others.
B2B Marketing & Sales: Instead of buying expensive lists from contact directories, simply find, follow, engage with your prospects on a b2b social platform exclusively built for SMBs and overcome the issue of spam / unsolicited calling.
Assume you are a graphics utility software vendor and and trying to market the same. Simply search for software and apply various other filters...here you go...we have this company “Wolfe corporation” ...Simply follow this company and the people working for this company whom you think will be your most relevant prospects...let’s follow Sam – the designer, Ray- the marketing guy and Mike – the VP of business development. Say, Ray (marketing guy) posts one of the product collaterals on the “Wolfe corporation’s” profile page. You get the same as a feed on your own dashboard. Remember, you are yet to establish contact with “Wolfe Corporation” even at this stage.
Say, you find a genuine area of improvement on that product collateral ...page 6..to be precise. Just leave your comment on the same and you can be certain that “Ray” would revert back to you that he has made the change suggested by you.
Now, from your side, send an add contact request to “Ray” and he is certain to add you to his contacts as he believes that you are no more a stranger to him.
Similarly, you can build extensive business relationships and save your sales pitch for later interactions.
Social media for businesses (SMEs)
It’s no brainer to see that social media is here to stay for good. Given vast variety of the existing channels to choose and stick with, it’s time for such a hot space to enter into a new category. There is a need for a portal to provide a quick and intelligent decision for both the consumer and the enterprise about their online connections.
A Platform to Help us to Distinguish Our Quality vs. Quantity Friends, Fans, Followers, and Companies
Facebook, Twitter, LinkedIn, Youtube, Flickr and others have been doing a decent job of providing additional marketing exposure and even in some cases, additional revenue. However, as more and more social networking sites pop up, how do you manage your brand across all these channels? Maybe more importantly, which one of these sites should you select as the one that will help you best reach your target audience? The proliferation of the social media avenues is becoming overwhelming.
This glut of information reminds me of the early 90’s when WWW was adopted broadly by the general public. Every company rushed to have a presence, to the point it became literally impossible to find the right information on the Web. That’s when a better generation of search engines – at first the Yahoo! and then Google – entered the market and helped us find the most relevant information by just typing simple keywords in their search box. If you had asked before Google launched, if there was a need for another search engine – most would have said no, we already have those….
Then came Web 1.0 & 2.0 – Youtube, Flickr, myspace, Facebook, Twitter and countless others have turned everyday people into content producers, influencers and experts. We basically tripled down on the information overload How do you know which channels to select for deploying your social media strategy? How do you know which one is the right channel to let your fans and followers to find you, your products, and services? Most importantly, who is Joe Smith that is recommending that person, that company, that product?
I hope my awesomize.me can accomplish such a mission. The site is not another social networking platform. Yet the portal to all your existing social media channels. The platform helps you, your fans, your potential clients to make an intelligent decision as to which company to connect to or follow via which social media channels and why? It’s free!
Elias CEO & Founder http://awesomize.me
Dale Traxler says:
Good insights Paul.
We are finding Facebook to be a very useful place for marketing research. We get feedback on product images we post and use that to select the images we use for FB ads. We'll be asking more questions as a means of interactions and such.
On the "conversions" conversation, when we look at referrals leading to conversions, Facebook is now the biggest influencer we see in our sales revenue. Note: we are tracking more than the "last" referral, so we look at Facebook as building our "brand" more than directly leading to a conversion from a specific post or ad. But, this effect is snowballing and we will continue to invest in FB to build fans, traffic and interactions.
Edward Cannell says:
I guess I'll be the only naysayer to some of the logic and comments in this article.
Eliasshams says that social media is here to stay, but... social media was always part of the web - it is not a new phenomenon. What is new is the grasping and sticky fingers of corporate marketing that believe they can generate greater sales by piggy backing on social media.
Think back a few year to when people joined user groups, and the Yahoo groups, and the protocol of all these groups was to shut out advertising. If you did not offer something useful to the community you were ignored.
Large corporations on Facebook are still ignored because they do not get it. They are on Facebook to get something, not to give something and like the wiseman said, "If you want heat from the stove you have to put in some wood."
I've looked at a few corporate Facebook pages and I am not impressed. Sears was the only one I found that even had a clue what social media was all about. They offered a free download of software that was customizable whereby you could portray a room in your house and try various decorating and painting ideas of your own to help you see a finished approximation. This was useful.
Other corporations were obviously on Facebook directly for themselves with only thoughts of pushing their products.
Ask yourself, "What does the web do better than any other marketing medium?" And having asked the question then answer it for yourself. This is important because when you arrive at the simple answer it opens doors in your mind.
When I ask people this question I get answers like, "The web gives information." But so do all other media. Then I hear, "But it's in real time." Yes, and so is the telephone.
Here's a clue to my question... "How does something go viral on the web?"
I feel I should help you out here, but if I did you would moan and groan about how obvious the answer is and kick yourself for not figuring it out on your own.
I'll be back. I have more to say about the sad state of web marketing
People are clearly using social media, particularly Twitter, to shop. Go where the eyeballs -- and wallets! -- are. Check it: http://venpop.com/2011/the-top-5-twitter-outlets/