- Posted January 2, 2014 by
- The CMO is Dead: CMOs Use Big Data To Become Chief Revenue And Innovation Officers
- April 7-9 2014: Marketo Marketing Nation Summit
- Secret 3: Excerpt from “The Social Engagement Rankings of the Top 15 Cosmetic Brands”
- Excerpt from “The Social Engagement Rankings of the Top 15 Cosmetic Brands”
- Excerpt from "Like My Stuff": Why Do Business on Facebook?
Excerpt from my book “Like My Stuff”: Driving Sales with F-commerce
The key to f-commerce ROI is to make sure incentives resonate with ambassadors, influencers, and customers so that they drive sales on the brand’s behalf. That’s why I recommend as one of the first steps in social media strategy is to put yourself back into the mindset of being in school. Go and study some brands that are doing it.
Brands that are in the midst of social commerce have found that when they use some of the same techniques as in regular sales processes, there is an increase in interaction. Those techniques can be:
Specific calls to action
Creating a sense of urgency through limited availability or blackout dates
Incentivizing social actions by offering discounts or special access
Here’s an example of how this can work. Let’s say you offer a coupon for your product. The catch is that 500 coupons have to be redeemed before I can get my deal. If the brand creates a way for the customer to share the deal with their Facebook connections, then more people will see the deal. If you have targeted the right demographic with the right offer, within hours or days the 500 coupons will be redeemed. It’s the action of one customer sending the deal within Facebook to hundreds of their connections that makes the f-commerce recommendation distribution process profitable.
Brands can increase their return on their investment by integrating e-commerce functionality with the word-of-mouth strategies we talked about in Chapter 13. What’s great about the social networking software is that the tools to implement those strategies are there. Some tactics are:
Offer contests where when the customer clicks on the Like button, they land on the Facebook store
Post ads, promotions, flash sales, pop-up offers to Wall and link those to the Facebook Shop
Combine “deals of the day” or product announcements with links to product details in the f-commerce shop
The Value of a Facebook Fan
There have been a couple of companies that have calculated the value of a Facebook Fan. In part, the reason why this had not been calculated before is because we needed more data to understand what dynamics affect other dynamics. It takes a while for a social network to get set up before it can be monetized. That is something that has stumped many business people who look at the investments that have been made in social networks. Millions and billions get poured into it, with the rest of the world wondering when they will begin to make money. In addition, to have enough data to watch for patterns also requires that the social network have some legs under it.
A company called ChompOn released a study on the calculations they did on the value of shares, Tweets, likes, and follows in the context of e-commerce. ChompOn works with 50 partners including Blackbook Magazine, JDeal,and Beyondtherack to offer Groupon-like crowdsourced coupons.
They used data from these daily deals to examine the conversion rate and action for deals they shared on Facebook and Twitter. They found the value of a Facebook share is $14 and the value of a tweet is $5.
For shares and tweets, ChompOn was able to directly attribute sales to the original action and took the total revenue attributed to each action and divided it by the total number of shares/tweets.
By comparison, ChompOn says the value of a Facebook “Like” is $8 and the value of a Twitter Follow is $2. For likes and follows, ChompOn estimated attribution by looking at traffic references and subtracting out purchases made through shares/tweets as well as purchases made through direct traffic. Of course this data is a bit tenuous and anecdotal. And it’s important to note that this analysis does not capture the long-term value of customers over time or the customer lifetime value we were talking about early in this chapter.
Syncapse is another company that calculated the value of a Facebook Fan. They looked at the differences in behavior and motivation between fans and non-fans to understand the true value of a fan. They looked at:
Product Spending: The ability to understand the methodology of increasing product spending
Loyalty: The ability to understand the available means to influence and promote brand loyalty within a target audience
Propensity to Recommend: Probability and propensity for word-of-mouth recommendations leading to sales
Brand Affinity: The impact on brand perception and recall
Media Value: Efficiencies of earned reach and frequency via the Facebook platform
Acquisition Cost: Efficiency of fans in enticing others to participate and drive organic membership
Want more? You can get my book here: http://www.amazon.com/Like-My-Stuff-Products-Facebook-ebook/dp/B005Y23KLK