Will Facebook shops be a new dawn for monetising social media?

The question of how to measure & monetise social media investment has been a hot potato throughout 2009. Many brands are either embracing or interested in adding social media marketing to their mix but struggle to define how this investment can be planned, measured and analysed to ensure it 'adds value'.

Over in the US, retailer 1-800 Flowers (can you guess what they sell?!) has taken a bold and innovative step forward in the race to commercialise social media activity - they've worked with advertising network Alvenda to launch a shop within their Facebook fan page.

The big leap here is that customers can shop and buy without having to leave Facebook. Whilst the current storefront is Flash based, it is an interesting step towards evaluating the cash potential of engaging customers via social networking sites. 1-800 Flowers currently has a low fan base, 2095 fans as of July 31st @ 10am (UK time!). Imagine though the potential of selling to a niche audience as that number grows. Provided they continue to engage with customers on Facebook and provide relevant content and contribute to discussions, perhaps there is a viable commercial model in play.

Why do I think this could work? Firstly the user interface is quick and easy - you don't need to be web savvy to order. Check out the screen flow below - clear navigation, buttons & calls-to-action:

Secondly, customers demand convenience. There may be a % of your audience who only use Facebook for communication, conversation and information. If you do not have the right presence in Facebook, you might lose the opportunity to convert them into a paying customer. I'm not saying this is going to work for everyone but it is logical that this eCommerce channel has potential.

Some might throw up the criticism of cannibalising online sales and losing margin by paying fees to Alvenda and/or Facebook. However, would you rather take a sale at a lower margin than your main website to gain a new customer who can then fall into your retention cycle, or potentially lose them to a competitor? The same argument applies to marketplaces like Amazon, eBay, affiliates and price comparison sites. Having been a Head of eCommerce for a retailer using marketplace and affiliate programs, I know that without them the net sales and contribution from the online channel is lower than with them, even if your margin % point is diminuished. I guess the investment decision relies on whether commerically you target margin instead of net profit. If you have a limited stock base, this becomes a more pressing concern.

The reality is that people have wanderlust online, they are promiscuous and shopping habits change. Presence is essential, as is grabbing attention in an attention deficit world. It is feasible that Facebook shops will add another channel to the online mix and help retailers monetise part of their social media investment. What interests me is the fallout of the 1-800 Flowers PR - how many 'me too' retailers will jump into a Facebook shop and how many will sit on the fence until there is evidence of the results?

Thanks to Econsultancy's blog for a helpful write up of what 1-800 Flowers has done and the ensuing discussion.

I'd welcome comments on my blog - what do you think of this move, will is start a footrace for the next frontier of social media? Alternatively, join in the Econsultancy blog discussion - I think this is an exciting move and would welcome other people's views on it.

How can your business start to make sense of social media?

I woke up on Thursday morning with a nagging question in my mind. I don't know why, perhaps it's because my mind has a mind of its own. The question that snapped me awake was how can a business make sense of the seething metropolis that is social media? I've been guilty of adding to the commentary and not putting enough suggestions to paper. I've tried my best but I do tend to get distracted and add my thoughts to the latest story, albeit in an attempt to add value and insight.

So this week I'm going to put down a simple plan with the sort of questions you need to be asking yourself and the actions you need to take. This is not an authoritative and exhaustive list, it is simply my recommendation to help you get started and not simply sit back and drown in information. It is written for someone who is new to social media and has had no experience of working with it and struggles to understand how it works alongside traditional marketing.

Below are my 9 steps to getting started:

Step 1

Define the goals and objectives of your social media strategy?

· Why are you investing time & money?

· What do you want to achieve?

· Create SMART objectives and ensure that any activity is tied back to at least one of these objectives

Step 2

Plan the resource requirements

· How much time can you afford to dedicate to building your social media presence?

· Who needs to be involved and how does this need coordinating?

· Define how you will respond to feedback (positive, negative, general enquiries etc)

· Establish what tools you will need to use to monitor your presence effectively

Step 3

Understand the culture of the social networks you wish to explore

· Evaluate competitors and other companies using the networks and learn from what they do

· Immerse yourself in the social media and get to grips with the etiquette and how people interact

· Read relevant industry blogs and articles to improve your knowledge

Step 4

Create a measurement plan

· Define what your success criteria are – are they soft or hard targets, are there financial objectives?

· Define how you will measure each success criterion

· Set-up the tools that you need to measure these (web analytics, voice-of-customer, call centre etc)

Step 5

Understand your customers' needs that do not relate to a purchase

· What will make people interested in what you have to say and engage in conversation with you?
What information will satisfy the needs of online researchers who don’t want a sales message?

· What subjects areas related to your products & services drive the greatest conversation?

· What knowledge base do you have that you can communicate to add value to the community?

Step6

Create an integrated communication plan

· Define how you will use each channel to promote both conversation and sales orientated messages

· Define how your social media presence will work with your other marketing channels

Step 7

Build relevant content – content is king

· Plan what content you can produce that is relevant and adds value to your community

· Integrate this content with your primary website to ensure that your traditional customer base benefits as well

· Integrate content creation with your SEO to ensure content is optimised and beneficial to site visibility

Step8

Identify brand ambassadors and key contributors

· Monitor your networks and identify people who get involved the most – talk to them, find out more about them and encourage them to become brand ambassadors

· Use other people to spread your message – give them the tools to share your content across their networks

· Engage with them directly using more personalized 1-2-1 communication

Step9

Monitor, evaluate, respond, adapt & evolve

· Social media is not a fixed entity, communities are evolving every day as people’s needs and desire changes – make sure you stay in touch with the mood

· If your audience is shifting to other social media sites, move with them; if they are demanding more interaction, learn how to satisfy this

· Regularly evaluate performance against the objectives and goals you set – how are you doing?

· Use all sources of information to identify ways to improve your engagement

· Above all, monitor your brand reputation and act when there is conversation happening that you can both influence and add value to – never stop listening.

Have I missed anything obvious? I am not claiming to be an 'expert', I don't believe in that word. These recommendations are based on my own experience of using social media. Please share your comments and suggestions.

Social media is pervasive

This week's blog is a short response to an excellent article about the power of social media for individuals v business, posted by Dan Greenfield on Social Media Today. I am not going to repeat the content, Dan does an excellent job so please read his blog for an insightful analysis.

In summary, a musician had his guitar damaged by United Airlines' baggage handlers and this was witnessed. Following months of wrangling, United Airlines failed to provide compensation. Frustrated, the musician set about using his music to broadcast this shocking customer service via social media sites such as YouTube. This led to an outbreak of negative PR as the online community took umbrage at the disregard for the customer.

What does this tell us? Well, it clearly demonstrates that social media is pervasive. By that, I mean that its reach is extensive and one action can echo far and wide very quickly. You don't need to be a business leader or celebrity for your voice to be heard, shared and embraced.

I think this is wonderful. The internet is fast becoming a social vehicle whereby people can have their 15 minutes of fame and effect change. The power of the online community to chose what it believes is important is exciting (for some concerning, perhaps). One individual can influence millions of others simply by providing relevant content that is then shared across networks.

What does this mean to business? It means that monitoring brand conversation is more crucial than ever in order to protect and enhance your brand reputation. It is arrogant to dismiss channels like Twitter as worthless fads that offer no commercial value. If your company is being criticised and you do nothing about it, that will damage you commercially. The challenge has been set and business must take online reputation seriously. Read Dan's blog and follow the links to find out just how quickly a story can go global. Can business afford to be so complacent?

What do you think? Is this a great development that will help make business more accountable for its mistakes or do you find social media too pervasive and open to abuse?

All comments welcome. Thanks.

DM drives more web traffic than online marketing - how can this benefit social media?

A new survey by Pitney Bowes has found that 60% of UK consumers believe offline direct marketing is the most likely to get them to visit the website of a company they have not bought from before. You can read the full Internet Retailing article here.

Ok, the survey only covered 10,000 people but that is a significant number and gives a good inidicator of the general mood of consumers. How much value should retailers place in this finding? Do they need to rethink their marketing mix to cater for the impact of offline media on online performance?

I started to think about this in relation to social media. Let's take the example of customer reviews. Argos made a bold and logical move at the start of 2009 by integrating online reviews into its print catalogue, with a reach of over half the UK households. That decision instantly put user generated content in front of their main audience and highlighted both the service availability and the value of independent comments. This raises the question of how effective user generated content can be in driving traffic and sales from offline media into the online store? I have not seen any follow up data from Argos or Bazaarvoice on this subject and would welcome any info.

The research from Pitney Bowes indicates an age and gender bias to the multi-channel effect. Women are more likely than men to be influenced by offline media and those in the 25-34 age group are most likely to consider buying when directed from an offline message. How does this tally up with the general usage of social media? Interestingly on networks like Facebook, it is the over 35 segment that is increasing usage quickly and there is a female bias, though us chaps are catching up quickly, especially on Twitter.

So, if there is a prime social media audience that will respond to offline messaging, is there a bigger opportunity to engage people via offline media to improve online website performance? Beyond incorporating customer reviews into catalogue and other media such as advertising, how else can retailers leverage social media across their offline channels?

I would start by testing some low level activity because you don't want to throw all your eggs in one basket and find out the effort has been worthless. With customer reviews I would be interested to see the impact on response rates to adverts using unique URLs for the online click. Perhaps radio ads could position top rated products to increase engagement and response?

Then there is the question of social network profiles. How can you promote your community presence on sites like Facebook & You Tube or your micro blogging on Twitter? Perhaps these can be incorporated into catalogues and adverts to test whether they can increase your audience participation?

Of course, you need to balance the testing of the new with the impact on your existing marketing activity. There is no point increasing Facebook fans if you destroy your direct response at the same time. However, with a sensible testing strategy I think retailers can play with this multi-channel marketing story and learn more about how the channel interaction affects customer engagement.

I would be interested to hear what you think and give me examples of retailers already doing this well......

Marketing Donut shows how to get people talking on Twitter

It's Tuesday 30th June, 2009 in Maidenhead. It's 9.30 am and my eyes are still stuck together and my brain desparately trying to work out why i'm not in bed and in my happy place. I'm sat at my desk, logged in to Twitter and just typing my first tweet using the hashtag #mydonut.

Why? My thoughts exactly. The reason is both intrigue and genuine engagement with a new brand, the Marketing Donut. The Marketing Donut is a new venture aimed at the SME market, sponsored by the brute force of Royal Mail and Google, to provide advice, guidance and discussions to benefit business. It is a fantastic idea and really well delivered online. Behind the Donut is a team of editors and marketers who are responsible for different elements of business, from marketing to law.

The twitthusiasts (twitter + enthusiast?!) at the Donut organised a Twitter conference on Tuesday and encouraged their contacts to get involved using the hashtag #mydonut.

Did it work?

Well I don't know what their success criteria were but it certainly had a resounding impact. Over 1,800 tweets were exchanged (not just in the UK) and the hashtag trended to the #4 spot. This also generated wider interest as those following the trending topics got stuck in to question what the hell #mydonut was about.

From a personal viewpoint, I benefitted. I gained 40 relevant new followers whom I can now engage with and exchange ideas. I also accessed information that has enhanced my knowledge and god knows, I need it!

For more detail you can check out the Marketing Donut blog.

What could have been done better?

Perhaps there could have been some goals set for the conference and these shared with all participants to focus the discussion. There were a lot of useful conversations but these were slightly disjointed and many people were simply RTing the same comments. Maybe there could be set discussion points that then generate multiple conversations and you can listen/join in to those that are relevant?

I have a vested interest in encouraging engagement with @MarketingDonut: I am one of their expert contributors, offering advice and info for online marketing. You can find my profile here. Please do drop by and take a look around the Marketing Donut website, you could be pleasantly surprised!

So what do you think? Was Marketing Donut's move inspired genius or symptomatic of people having too much time on their hands? Please leave your comments.....