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.
Conclusion
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.by Paul Chaney
http://www.practicalecommerce.com
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