- Posted March 9, 2013 by
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- Social Customer Service—A New Breed of Consumer is Emerging
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- Demystifying the ROI of Social Media
Excerpt from "Like My Stuff": How to Track Your F-commerce Success
By optimizing these analytics tools on Facebook, businesses can simply extend page tags to track user traffic and revenue, allowing them to make more informed decisions on future investment and development. They can also add their Google Analytics data so they can compare multiple website profiles and cross-analyze the data. A brand can combine Facebook data with your own marketing or app data to track conversion of visits-to-activities or visits-to-revenue.
Businesses can also take advantage of Facebook’s internal tracking system, Facebook Insight. In addition to standard metrics, this application also tracks Facebook-specific features such as likes, shares, and any other social data users generate within the network. This extra level of knowledge allows brands to customize their Facebook stores to key demographics and user behavior.
How to Quantify F-commerce
The question that has escaped many people is what is the value of a Facebook fan and a share on Facebook. The value comes not just from Liking a brand. The value of Facebook commerce is based on the fact that the “action of Liking or posting information about a deal” has an audience of trusted peers. Now with brands adding f-commerce, the connection to ROI will be clearer.
According to Social Commerce Today here’s what some of the data shows:
• 51 percent increase in likelihood a customer will purchase, after clicking the ‘Like’ button
• 28 percent increase in likelihood that customers who ‘Like’ a brand will repurchase
• 117 percent increase in the amount a consumer that has become a fan of a merchant’s Facebook page will spend on a brand compared to a non-fan
• 17 percent of Facebook users say simply having the ability to ‘Like’ a brand makes them more likely to buy
• A survey by Harris Interactive found that when customers were asked, “What sources influence your decision to use or not use a particular company, brand, or product,” 71 percent claim reviews from family members or friends exert a “great deal” or “fair amount” of influence.
• A Keller Fay study showed that the average consumer mentions specific brands over 90 times per week in conversations with friends, family, and coworkers.
• Consumer reviews are nearly 12 times more trusted than descriptions that come from manufacturers, according to a survey of U.S. mom Internet users by online video review site EXPO.
The proof is clear that f-commerce increases conversion, shopping cart size, and drives customer loyalty.
The F-commerce Customer Value Chain
Socially connected customers are influential consumers that help drive purchase decisions and have enormous value for a brand. In designing your f-commerce strategy, you might want to look again at Customer Lifetime Value. In fact, to succeed with social commerce you will most likely have to rethink your game plan.
In the days before social media, executives could look at the direct, financial correlation between:
• Customer satisfaction
• Customer retention
• Customer lifetime value (CLTV), and
• The company’s profitability
The theory goes that if customers are satisfied, they are more likely to be loyal and are retained by the company. The longer the customer is retained (increased CLTV), the more value they provide via profits. The two elements that increase the traditional CLTV of customers are:
• The length of time a customer continues to spend with a brand—i.e., is it a one-time purchase or does the customer come back and spend year after year?
• When that customer is spending, does that amount increase over time?
The financial connection of all three aspects of satisfaction, retention, and customer lifetime value make up the f-commerce Customer Lifetime Value Chain (CVC).
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