Social Commerce Speed Summaries

Speed Summary – ClickZ Column on Social Commerce (Feb/March 2010)

Two months ago ClickZ launched a new social commerce column with none other than social commerce expert Sam Decker (CMO of ratings and reviews software company Bazaarvoice) as columnist.

Five articles later, here’s a speed summary of practical social commerce tips and wisdom shared on the column so far… Insight rich and results-focused, it’s the next-best thing to hiring Sam Decker himself…

1. Social Commerce 101: Leveraging Word of Mouth to Boost Sales

i. The primary objective of social commerce is to leverage online word of mouth to boost sales – it moves the word-of-mouth needle from “buzz” to “buy.”

ii. The basic strategy of social commerce is to facilitate customer interactions and participation in ways that will drive measurable business results.

iii. The five core activities of social commerce are;

a) Crafting messages and providing social platforms (social networking pages, blogs, forums, etc.) to get people talking about your brand, products, or services online.

b) Encouraging participation in conversations through promotions, contests, ratings and reviews, user-generated content (photo and video) uploads.

c) Analyzing conversations to find out what people are saying and why, to spot trends, and to find out exactly what customers want.

d) Delivering products, services, and promotions that meet these needs.

e) Measuring ROI of social media programs through analytics and marketing measurement tools.

iv. The key business benefit of social commerce is improving bottom-line sales growth, and social commerce does this by improving traffic, conversion, average order value, loyalty, satisfaction, and competitive differentiation (not simply chasing sales).

v. A simple 3 step social commerce program should involve;

a) Starting with user-generated content around your product – encouraging people to create and share content about your products and services.  Customer reviews are an effective way of achieving this.

b) Expanding your customer-voice focus outward from your site – encouraging conversations on the mobile and social media platforms that are popular with your target market.

c) Leveraging customer feedback in all of your marketing initiatives – by including commentary and testimonials wherever you interact with customers – in search and display ads, in-store signage, catalogs, and e-mail campaigns.

2. Connect Customer Interactions to Get More of Their Time…and Money

i) Social commerce is about driving sales (growth) (as opposed to awareness/notoriety) – and the best way to drive sales growth is to build customer loyalty.  An effective way to build loyalty is to encourage active customer participation (building wishlists, creating gift registries, sending friends e-mail, filling out a survey, posting a publicly-viewable photo, writing a product review, answering a question posted by another visitor…).

ii) Participation creates loyalty through the “IKEA principle”, the act of building the furniture yourself makes you feel more satisfied with the finished product. Participation also leaves a digital trace that has advertising value – and that can also stimulate others to participate.

iii) To stimulate participation, you need to understand and focus efforts on a core customer motivations for participation (helping others, helping brand, self-expression, creative-expression, standing out, gaining ego-capital (bragging-rights [AKA ‘impression management’]).

iv) Rather than view participation in terms independent acts, it’s useful to look at customer participation in terms of a chain of actions built up over time that leads a customer up a loyalty ladder.  Each act of participation should lead to another.

v) Map the participation chain to measurable goals: With each invitation to participate on your site or social platforms, provide clear paths so that consumers can achieve specific goals, such as “Upload Your Photos Here” or “Tell us What You Think! Review a Product Now.” Once those goals are achieved, a new goal should always be presented, leading the consumer forward.

3. UGC and SEO: A Sales-Boosting Social Commerce Tactic

i) To turn positive brand talk (the goal of brand marketing in social media) into sales – marketers need to go beyond simply providing conversational platforms for brand talk.  You need to leverage the resulting UGC (User Generation Content) to turn commentators and readers into buyers.

ii) One way of doing this is to integrate UGC into your SEO strategy (Search Engine Optimization). UGC on its own boosts natural search results by creating a wealth of searchable content, but the real value add is when marketers go a step further and index that content to drive maximum exposure to search engines and, therefore, traffic to their sites.

iii) Before you begin any program to optimize UGC for SEO, start by mining and analyzing all the user-generated content about your brand, products, or services – whether on your site or on third-party sites – to find out the most popular words and terms. You can then index and tag category and product pages to reflect these popular natural language terms so your site pages turn up more frequently in searches (white paper on this “cross-funnel indexing”).

iv) The value of UGC for SEO from a social commerce perspective is the  monetary value of the search traffic driven by UGC. Bazaarvoice has seen a clear pattern of lower average cost-per-click and higher conversion rates from UGC-driven searches across their customer base of over 750 brand Web sites that incorporate customer reviews, stories, and answers on their Web sites.

4. 1-2-3 Buy-In for Social Commerce – From the C-Suite and Beyond

i) Deploying social commerce means getting buy-in from skeptical C-level bosses wary of anything with the “social” prefix (read vague experiment of dubious value). Here’s how to get it.

a) Present a business case, not a marketing plan – showing how social commerce will create and retain paying customers.

b) Start by proposing initiatives likely to have a direct sales impact – e.g. a Facebook/Twitter contest rather than a corporate blog.

c) Demystify social commerce by showing decision-makers precisely how you will use to social media to achieve business goals.

d) Emphasize the P&L measurability of social commerce with business results to contrast it with other “social” experiments.

e) Remember that successful social commerce programs also get buy-in from two other key stakeholders; fellow employees and customers.

To foster employee buy-in – make your social commerce program inclusive by sharing the business case, your activity, success stories and success metrics internally and showing how social commerce can help various business functions (marketing, IT, operations…).

Getting buy-in from customers involves building customer participation (chains) (Ikea principle) (see 2 above).

5) Friends Like You: Why Social Commerce Must Get Relevant

i) To avoid ‘review-overload’ and ‘paralysis-by-analysis’, social commerce programs should help customers find content most relevant to them.

ii) One simple way of making ratings and reviews more relevant is to make review content searchable, filterable, and sortable – so customers can get to the content most relevant quickly and easily.

iii) A second innovative solution of making social commerce more relevant, and that has been adopted by TurboTax team at Intuit is to use social recommendation technology (collaborative filtering), allowing people to see ratings and reviews from people with a similar profile to them – ‘people like you’.

a) The Turbotax site site is a mashhup of social media and advertising, and allows people to sort, filter, and read reviews on Turbotax products that are relevant to their own personal situations.  They can also contribute their own review – and syndicate it (“friendcast” it) to their social networks.

b) Intuit has found that click-through rates from friendcasted reviews are 4x higher than banner ads, and 75 percent of TurboTax customers who clicked on a “friendcasted” link in their social networking feed were new customers. As a result the site has contributed to a double-digit increase in unit sales for TurboTax.


Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.

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