Even this year I heard entirely contradictory opinions about the usefulness of the social media for commerce.
There are people who attribute the successes of their e-commerce to social media but some are frustrated by not seeing any visible results from their efforts.
The truth is that social commerce is not a magic wand, but it is a necessary component of the marketing mix that we can use in all three stages of customer lifecycle:
- Reaching new prospective customers and creating awareness
- Influencing their buying decisions and getting sales
- Keeping relationships, building brand loyalty, and engaging brand advocacy
The challenge is in selecting and executing the right social commerce tactics at the right time and integrating with other channels such as search and display advertising, mobile, email, or direct marketing. Because each business has its own distinctive combination of products and target audience, the specific recipes are also unique for each market. Data and analytics are vital tools in selecting the right strategy and managing execution.
Remember, ignoring social commerce or social media in your marketing strategy is a big mistake that sooner or later will have a negative impact on the future of your business. This comment is equally applicable to online and offline industries. Social media is a must component of Online to Offline (O2O) marketing too.
In this article we discuss how different brands successfully apply social commerce tactics in pursuing all three objectives: create awareness, influence buying decisions, and build customer loyalty.
Social Commerce Trends
The diagrams below give us good visual illustrations of the recent statisitc and trends in social media and commerce.
Awareness and Reach
Role of social media in reaching new prospective customers and creating awareness
Facebook offers two types of objectives for awareness campaigns (5):
Facebook awareness campaign objective is to increase awareness for your brand by reaching people who are more likely to be interested in it.
Facebook uses machine learning prediction algorithm to select people who likely are interested in your product based on historical data.
The Facebook reach objective is designed to show your ads to the maximum number of people in your audience. Facebook allows you to define very precisely the target audience based on things like demographics, location, interests and more.
While both objectives are close; the Awareness campaign allows you more precise targeting based on the user’s past behavior in comparison with a Reach campaign when ads are shown to anyone who matches your selected audience criteria.
Below are two examples of awareness campaigns that target audience based on the user’s online behavior. The advertised products have much higher than the average match with the type of products that I am likely to buy.
ivivva by Lululemon Facebook ad example
Frank And Oak ad example
The ads are related to the content being browsed and allow the retailer to have different Facebook discounts. That allows easy tracking of campaign effectiveness and redemption.
Instagram ad examples
Carter’s OshKosh B’gosh Canada
The ads are based on the previous searches you have done on Instagram and allow you to preview the offer without living Instagram.
Twitter ad examples
Walkme.com sponsored post
McDonald’s Canada video ad examle
Consideration and Decision
How social media helps to influence shoppers decisions
Facebook and Instagram
The best way to drive sales on Facebook, Instagram and Audience Network is to reach people who are likely to be interested or who have already expressed interest in your business. You can prompt them to purchase by displaying products based on what they liked during past browsing experiences or by offering promos to encourage them to shop at your store.
Over 90% of retail sales in the US happen in stores, but people are increasingly researching products and business locations on their phones. Facebook’s location-based ads are very effective in driving customers into brick and mortar stores. (6)
Facebook provides tools for highly targeted promotions. The ads are shown to people in moments when that mostly ready to buy based on the past browsing experience.
Customers reviews and other user-generated content
We know the importance of authentic customer reviews.
You may also find many studies that show how customer-generated photos and videos have a more powerful impact on purchase intent that brand produced advertising. Customers have more trust to content produced by other customers with similar needs and experiences.
A mom will trust other moms, prospective travelers rely on photos and videos of people who visited a resort before.
Below are just a few examples of research results that illustrate the significance of user-generated content (7):
• UGC-based ads get 4x higher click-through rates and a 50% drop in cost-per-click than average.
• User-generated videos on YouTube get 10x more views than content created and uploaded by the actual brand.
• 93% of consumers find UGC to be helpful when making a purchasing decision.
• On-site consumer reviews can increase conversions by 74%.
• 71% of consumers feel more comfortable buying a product after researching user-generated reviews.
• 87% of brands use UGC to share “authentic content, ” and 72% believe (correctly) that it helps them engage their audience.
Below are screenshot examples from Modcloth.com and Sephora that include the reviewer profile along with the review to help users narrow down the reviews to only reviews that have more close needs or characteristics to them.
How social media helps build two-way relationships between brand and customers and engage brand advocacy
I believe that social media and social commerce create infinite possibilities in creating new or reinventing old tactics in building brand loyalty. I listed below some of the methods how brands use social media to build customer loyalty:
- To extend the idea of traditional loyalty rewards programs into social commerce. You may share exclusive sales and promotional offers with your Facebook fans as recognition of their loyalty.
- Reward customers who keep interested in your brand by posting discount promotions on your news feed.
- Leverage marketing automation tools that help ask customers for reviews and referrals.
- Use social media sentiment analytics tools to measure sentiment score and find potential trouble spots to address them as soon as possible. You may need to directly communicate via social with unhappy customers to resolve the root of the problem.
- Promote your customer user-generated content (UCG) for building and maintaining community
- Make sure that your social media pages are updated. Comments and questions are promptly answered to keep the trusted relationship with your online customer community.
- Brands with products that need support or “how to” instructions may get tremendous support from their customers who answer questions in Q&A discussions, share videos and tips about product usage.
For example, I like how clothing brand ASOS is trying to use social media in multiple ways for building and maintaining brand loyalty
Measuring and Optimizing Social Commerce
The topic of Measuring and Optimizing Social Commerce requires a separate article due to its significance and complexity at the same time. I want to touch only a few fundamental points about social media measurement:
- The primitive metrics like number of likes, followers, comments views or clicks does not provide any value without having a good model of the customer purchase journey and contribution of multiple touch points to conversion
- The “Last click” is a not a good proxy for understanding which ads help grow your business.
- 90% Of the people who could buy your product don’t click on your ads.1
- Continuing to rely on flawed, inaccurate measurement standards ultimately costs your business far more.
- Conversion Lift is best overall proxy metric’s to measure impact of social media for both online and offline conversions
- Statistical Attribution modeling for the Incremental revenue and profit lift is the ultimate KPI of the social commerce Economic value
1Nielsen BrandEffect meta-analysis, April 2015
Four Metrics That Rock
I agree with Avinach Kashuk statement (8) about 4 fundamental metrics that are also highly relevant to social media measurement:
“Conversation Rate. Amplification Rate. Applause Rate. Economic Value. Four simple measures that get you to focus on the right thing from a social media participation perspective, help you understand how well you are doing at it, and quantify the business impact.”
- Social Commerce (Eradium Glossary Definitions), https://www.eradium.com/glossary-definition/social-commerce/
- Top 15 Most Popular Social Networking Sites and Apps [October 2017], https://www.dreamgrow.com/top-15-most-popular-social-networking-sites/
- 5 Key Social Media Takeaways from the 2017 Internet Trends Report, https://www.socialmediatoday.com/social-business/5-key-social-media-takeaways-2017-internet-trends-report
- Spanning the Decades: How to Market to Each Generation on Social Media, https://www.webpagefx.com/blog/social-media/market-to-each-generation-social-media/
- Brand awareness, https://www.facebook.com/business/learn/facebook-create-ad-brand-awareness
- Boost conversions with Facebook, https://www.facebook.com/business/goals/increase-online-sales
- 38 Mind-Blowing Stats About User Generated Content, https://www.tintup.com/blog/38-mind-blowing-stats-effectiveness-user-generated-content/
- Best Social Media Metrics: Conversation, Amplification, Applause, Economic Value, Occam’s Rasor blog by Avinash Kaushik, https://www.kaushik.net/avinash/best-social-media-metrics-conversation-amplification-applause-economic-value/