Monetizing Social Interactions
There was a time not that long ago when retailers exploring new ways to execute effective social engagement strategies would face a barrage of questions about return on investment. How do we know, CFOs and other company leaders would ask, if all that tweeting, liking, and pinning is doing anything for the bottom line? Where's the proof that the investments in maintaining, monitoring and updating an ever-expanding array of social media outposts are driving conversions and increasing profits?
Fair questions to be sure.
There's been a robust debate in e-commerce circles of late over whether social media is worth all the attention it's been getting from retailers. A recent report from Gallup found that close to two-thirds of consumers felt social media had no influence on their purchasing behaviors. Another report by technology researcher Forrester further cast doubt on the category by noting that just 3 percent of marketers named social media as a top-three priority for 2014.
Maybe they should think again. There's still plenty of compelling evidence that social media users are exactly the type of consumers retailers need to be engaging. Multichannel brands are perfecting strategies to monetize their social interactions with existing customers and generate referrals that lead to new sales.
These tactics include social login, social apps and contests, and customer loyalty programs, all of which are tailored to do more than just generate likes. They're specifically targeted at driving key performance improvements like revenue growth, retention rates, return visits and average order size. And, just as importantly, thanks to powerful new analytics tools, retailers using the right platforms are better able than ever to track, document and highlight the success of these efforts.
Statistics show that social login users — i.e., those who log into sites using their Facebook, Twitter, Yahoo or other social media accounts — spend more time on a site and convert at an average of 15 percent to 20 percent higher than other visitors. Consider some of these social strategies to drive sales:
Forcing visitors to register before shopping or checking out drives them away. Social login streamlines the process, something that's especially important in an increasingly mobile environment. The technique is a perfect example of a social strategy that can lead directly to more robust results. It addition to removing annoying hurdles for customers, social login gives retailers access to relevant user information to help them better understand and connect with visitors down the road, even if they don't buy anything on their initial visit.
With the ever-expanding universe of social media sites, it can be challenging to figure out which ones best align with your brand's target audience. An effective way to gather data on how shoppers use social media is to create links and tools for an array of social media sites and see which ones customers use, giving them a snapshot of where shoppers who visit their sites hang out online.
Reward Shoppers for Shares
Do more than just make it possible for users to share your products with friends — encourage it with social apps and contests. With a few incentives, you can turn fans into potent brand advocates whose referrals from their own social networks can be driven back to your site.
Ulla Popken, an international retailer featuring stylish plus-size wear for women, enjoyed 15,000 likes on its Facebook page, but needed to turn that interest into action. The retailer offered shoppers a chance to win $250 for liking products on Facebook, and 20 percent off for sharing on Facebook, Twitter or via email. In just 60 days, Ulla Popken's social promotions reached 65,000 people, generated $16,000 in incremental revenue, and triggered peer referrals with a 17 percent conversion rate.
Customer Loyalty Programs
As the torrid pace of online sales slows in the maturing e-commerce marketplace, winning repeat business is going to be more important than ever. Loyalty and retention programs focused on points-based systems around both on-site behavior and actions on social networks can be key ways to generate repeat business.
Highlight the Brains Behind the Brand
Relationships are a two-way street; building social ties with customers sometimes calls on retailers to share some of themselves. Merchants should find ways to spotlight the people who power their brand, both internally and among its followers. Rather than asking consumers to connect with a nameless, faceless organization, brands that spotlight individuals give shoppers the opportunity to connect on a personal level.
Athletic women's wear retailer Title Nine uses its blog for behind-the-scenes snapshots and videos that let shoppers in on the adventurous outdoor exploits of staff experts, demonstrating how their employees embody the brand.
Online retailers will continue to experiment with novel ways to engage their customers through social media. Thankfully they have more powerful tools than ever to make sure the buzz they're generating on social sites is building customer relationships that will ring up sales for years to come.