Posts Tagged ‘Social Networks’

Big Brands Embrace Social Commerce. Are They Alone?

by on Tuesday, October 12th, 2010

Zavee CEO Alan Pleskow and I attended the inaugural Rise of Social Commerce conference last week in Palo Alto. Big brands (usually) adopt new technologies and strategies earlier than small to medium sized businesses, so the conference provided a fascinating peek at how some of the largest companies are planning for and deploying Social Commerce today.

Social Commerce was defined by the conference organizers as “the use of social technologies to connect, listen, understand, and engage to improve the shopping experience.” For most conference attendees, the goal was removing the the technological, economic and operational obstacles that add “friction” to the online commerce experience.

(via x-ray delta one - Creative Commons)

Does that mean that Social Commerce is only for brands that sell online? And only for enterprise level companies? Not at all. Much of the learning around how consumers interact with brands and each other applies equally to brands whose customers make shopping decisions online but actually buy in-store. And much of the same learning applies equally to SMBs, even if some of their challenges are unique. For example, while SMBs are more likely to ask “How can I find the time?” than “Which department owns this?” using technology to become more customer-centric is something every business can do.

The organizers developed a conceptual framework for Social Commerce that has four phases:

  1. Let’s Be Social
  2. Enlightened Engagement
  3. Store of the Community
  4. Frictionless Commerce

The first phase is where many SMBs are today: working out the basics of consumer engagement on social platforms. Very few business we meet through Zavee still believe that social media is irrelevant to their business. Their most common issues are the time commitment required and the loss of control over their business’ message. Depending on the size of the business the time issue can be a real concern, but small businesses can start small, and increase their investment in social media as they begin to see results. As for the control issue, a few minutes on Twitter should open the eyes of any business owner about how much control they really have.

The second phase should be the destination for most SMBs, and they should get there as quickly as possible. This phase involves adding social content to the shopping experience: reviews from consumers, information and suggestions from the business, even content sourced from third parties. Regardless of whether the actual transaction takes place in the online or offline domain, enriching the consumer’s shopping experience through social content can have a significant impact on businesses of any size. Consumers respond to timely, relevant, personalized content by trying new businesses, becoming loyal customers and sharing their experiences with the community.

The third and fourth phases are over the horizon for many enterprises, let alone SMBs. The third phase involves bringing consumers into the process by which businesses create, buy, stock and price products, and the fourth involves completely re-imagining the retail experience. Some of the examples from the conference, such as Kaboodle and ModCloth, are very impressive. Many of the companies at the conference are looking to leverage Facebook’s enhanced commerce capabilities to bring the online store to the consumer rather than force the consumer to leave Facebook for an e-commerce site. SMBs may not be able to do everything these companies have done, but the underlying insight – that consumers respond to being included in decisions that are made upstream of the purchase – is something SMBs should consider making part of their strategy.

With so much emphasis on the enterprise, why did Alan and I attend this conference? It’s because we believe that the definition quoted above also describes what Zavee does for our merchants and shoppers. Our platform helps merchants use social media to listen, understand and engage with consumers. More importantly, Zavee is a community that supports the shopper-to-shopper and merchant-to-shopper interactions that lead to an enhanced shopping experience and a stronger brand. Adopting a Social Commerce strategy can seem daunting for SMBs, but with Zavee they don’t have to do it alone.

The Zavee takeaway:

  • SMBs can learn a lot from what enterprises think and do, even if these learnings can’t be applied directly.
  • The insight that consumers respond favorably to content that is timely, relevant, personalized can be leveraged by businesses of any size.
  • SMBs need to get into the Social Commerce space, but Zavee can ensure that they don’t take the journey alone.

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Do You “Like” Me? Do You Really “Like” Me?

by on Tuesday, June 1st, 2010

Remember Sally Fields’ famous acceptance speech at the 1985 Oscars? “You like me! You really like me!”  But what if we didn’t mean it?

One of the recent changes to Facebook has been a great expansion of the “Like” concept which, among other things, replaces the “Fan” concept.  Yelp and other social networks have followed suit.  At least for now, Zavee is still inviting shoppers to become “Fans” of merchants they haven’t yet shopped at and not just “Like” them.  Why?  Because we think that, on some perhaps subtle level, being a “Fan” implies a higher degree of emotional engagement than merely “Liking” someone or something.  How substantial is that difference? It’s hard to tell.  If you follow sports you might agree that there is a difference between liking a team and being a fan.  If you follow the New York Mets or the Miami Dolphins you almost certainly do.  At Zavee we are considering changing the “Fan” concept to something completely different – something that retains a high level of engagement but provides greater flexibility.  More news to follow on that new feature.

One thing we didn’t think about when we were debating “Fan” versus “Like” was whether a lower level of engagement might make it easier for users to be less than candid about what they say they “Like”.  Would people really do this?  And why?

Starbucks Barista Badge from Foursquare (via pbende)

No less a social media authority than Robert Scoble says they would, and do.  In fact, he says that he has done that very thing.  Why?  Scoble says that it comes down to a fundamental truth about human nature: we present ourselves as we want others to see us.  Since the pages, users and merchants we “like” become part of our public social persona, we can change that persona by changing what we say we “like”.  If our tastes run to country bands and donut shops, but we’d rather be thought of as someone who prefers singer-songwriters and vegan restaurants, our “likes” can reflect that.


Is this a problem for smaller businesses? It might be. For one thing, advertisers tend to take us at our word.  Check in frequently enough at Starbucks and you can win a discount off your coffee.  Starbucks can’t tell whether you like the coffee, just how often you showed up.  Clicking the Like button on Yelp for a bunch of restaurants gives rise to inferences about your preferences and behavior, and advertisers will target you accordingly. Providing a misleading social persona is just a waste of time for both advertiser and user, unless it’s being done as a form of protest against behavioral targeting.

Like much about social media, behavioral targeting presents legitimate privacy issues, and they need to be worked out. However, if advertisers lose faith in the accuracy of consumers’ self-descriptions the effectiveness of social media for marketers is likely to decrease. For small marketers who are drawn to social media marketing by, among other things, its low cost and high effectiveness, this could be a very unfortunate result.

It’s probably true, as Scoble says, that advertisers have ways to verify, at least in part, the accuracy of the things we claim we like.  But the deeper point is that the value of social media as a communications tool for users in the network depends in large part on the credibility of other users.  A user who creates a false or misleading social persona may only lose personal credibility within the network, but if enough users do the same thing the credibility of the network as a whole may suffer. A recent paper about dating sites reports that deception in profiles is rampant. The paper suggests that one reason is that users understand what makes them desirable to potential mates, and create profiles to reflect those expectations. Dating sites like to advertise their successes, but they may have become just one more system to game.

Whether Zavee stays with “Fan”, changes to “Like” or goes in a different direction altogether, the principal means by which Zavee shoppers communicate the quality of their shopping experience is by writing reviews. It takes more effort (and commitment) to write a review than to click on a button, but that very fact gives proportionately more weight to the reviews and less to a simple “Fan” designation. One safeguard we put in place expressly to improve the accuracy, timeliness and fairness of reviews is for the system to accept a review of a merchant only if the reviewer has made a Zavee purchase at that merchant within 30 days.

We hope that social networks and their users develop means to limit the influence of false social personsas, not to protect advertisers but to protect the networks themselves and to permit them to continue to deliver valuable, relevant experiences to their users.

The Zavee takeaway:

  • Once it becomes trivially easy to create a social persona, that persona may itself become trivial. The problem is that those personas are taken seriously, both by advertisers and by other users.
  • It’s natural to present ourselves as we’d like to be seen, but invented personas can make the the network as a whole less valuable to users who rely on other users for timely and accurate information and opinions.
  • Local businesses will suffer disproportionately if social media marketing loses credibility, because it’s a particularly attractive tool for them in an environment where conventional alternatives aren’t nearly as cost-effective.

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Checking Out Checking In

by on Tuesday, May 4th, 2010

Have you checked in yet?

Foursquare @SXSW

Foursquare @SXSW

Location-based social networks such as Foursquare and Gowalla make use of the GPS capabilities of smartphones to let users communicate in real time not just what they are doing, as with Twitter, but where they are. They are growing rapidly, and for businesses they are well worth checking out.

Both networks are about two years old but have entered the mainstream only recently. Users of Foursquare “check in” at different locations to tell their friends where they are and what they are doing. Foursquare also has an element of game play that lets users collect “badges” for certain activities, such as earning a “barista” badge for checking into five Starbucks. Foursquare has a large user base that skews young and lives in cities, and has attracted a certain amount of backlash (note: strong language at link), although it has its defenders. Gowalla doesn’t depend quite as much on its game mechanics, but supports media files, such as photos, and claims to be looking for a broader (and perhaps older) demographic.

Businesses seem to have less of a “wait and see” attitude toward location-based social networks than they did toward Facebook and Twitter. It may be that, having been through this before with other Social Media outlets they simply need less persuading when it comes to location-based networks. It may also be that the business case for location-based networks is more obvious than with, say, Twitter. Another possibility is that the networks themselves have become business-friendly faster. Foursquare already has the ability to serve merchant offers based on location, although it is still refining its analytics dashboard. In any event, marketers are not sitting on the sidelines. Recently, Pepsico announced a “geo-based loyalty program” in partnership with Foursquare that will reward consumers who check in via iPhone at businesses that serve Pepsi products. The History Channel also is using Foursquare to promote its show, “America, The Story of Us.”

Do networks like Foursquare and Gowalla have relevance for small businesses? We think they do. Even basic data on who has visited a business, how frequently, etc. adds to the merchant’s knowledge of the customer base. Serving offers and other content to those customers has obvious benefits, although it still isn’t clear how the merchant can get a full picture of the return on investment from that content (merchants will know how many people used (and, presumably, saw) the offer, but won’t necessarily know how many of those transactions were made by customers who would have purchased anyway). Checking in to a business from a location-based network also can provide extended word of mouth for the merchant. It’s going to take time to figure out how to use these services for business, but that was true with Facebook and Twitter. And, as with Facebook and Twitter, there is a lot of potential and no real downside for businesses that experiment.

At Zavee we are currently exploring the fit with location-based networks, but we fully anticipate using this technology to add value to the Zavee experience for both merchants and shoppers. With both cash back offers by merchants and reviews by shoppers, Zavee provides a great deal of content whose value can only be enhanced by becoming location-aware.

The Zavee takeaway:

  • You heard it about Facebook, you heard it about Twitter. Well, location-based social networks aren’t fads either.
  • Businesses have wised up and caught up, and are right on the heels of consumers in discovering how to make these services useful, relevant and rewarding.
  • If you were sitting on the sidelines while Facebook and Twitter were becoming huge, don’t let it happen again!

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You Can’t Buy Customers. You’re Lucky If You Can Rent Them.

by on Tuesday, December 15th, 2009

In a recent post on his “positive disruption” blog, Tom Martin makes the point that “You Can’t Buy Customers. You Have to Earn Them” and asks for reactions.

His basic point is that with few exceptions marketers who deliver a substandard experience are no longer able to hold consumers captive. One reason is that new and better products are easier and cheaper to develop than ever. The other reason is that it’s now so easy for consumers to inform and influence each other that bad experiences have nowhere to hide.

My list of exceptions may be longer than Tom’s. His example is AT&T and the iPhone but it’s easy to think of others: How many cable providers can you choose from? How many electrical utilities? How many airlines fly the route you want to travel?

I’m also not completely sold on the notion that good, new products can rapidly drive out bad, old ones. I think that probably depends a lot on the category. The barriers to creating, say, a new social network application, which we have done at Zavee, are not the same as the barriers to creating a new car.

Where we agree completely, however, is on the importance of access to information. It isn’t just that media companies are no longer the gatekeepers and large marketers are no longer the only ones who could pay the price of access. It’s that the web is finally sorting itself out as a communications medium, with public micro-messaging streams (a la Twitter) as the primary focus for disseminating and accessing information such as links.

So, does an environment in which consumers have lots of information and lots of options mean that they are hopelessly fickle and not worth talking to? Does it make sense to invest in a brand if consumers are making purchase decisions based on information and reviews from each other rather than messages from the marketer? What are marketers actually paying for?

I think that a strong brand is more important than ever in today’s environment. First, consumers who maintain for themselves a highly efficient information market are being rational, not fickle. Marketers need to participate in that market, not resist it. Second, consistency with the brand promise is one of the things that consumers will test for themselves and tell each other about. This favors brands whose promise is clearly defined and well communicated, something that still requires investment. Third, consumers want – and now can demand – relevance.  This, too, favors brands that are strong and highly differentiated. Finally, as Tom himself has persuasively argued, there is always a place for brands that inspire passion.

Bill Hanifin recently wrote about Chick-fil-A, a brand in a highly competitive category (fast food) that uses a mix of quirky advertising and old-fashioned promotion to build passionate loyalty. And while Bill refers to Chick-fil-A as an offline brand, the company’s  Facebook page, which isn’t updated very often (the Events section doesn’t list the opening Bill attended) has more than 1.23 million fans.  It would not take much for Chick-fil-A to leverage these fans into a powerful online community.

Marketers never “bought” customers. At best they took advantage of inefficiencies in the information marketplace, inefficiencies that are rapidly disappearing. Marketers now should look to “rent” customers long enough to prove their relevance, demonstrate their value, inspire loyalty and deserve passion. It’s a tall order, but as Chick-fil-A shows, it’s possible – and worth it.

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Who Uses Review Sites? You Do (And So Do Moms)

by on Tuesday, November 17th, 2009

LexisNexis has issued its 2009 Online Ratings Survey, an online survey of 561 legal professionals, small business owners and consumers that was conducted by Lightspeed Research in April 2009. The survey has been reported on extensively online, including at XML Journal and WebProNews. The full results are available here. The surprising results of the survey are that small business owners are active users of these sites – even more so than consumers.

Here are some of the highlights:

  • 87% of small business owners surveyed and 63% of consumers have provided feedback on review and ratings web sites.
  • More than half of small business owners and 43% of consumers believed that review and rating web sites mean businesses are held to higher standards.
  • Businesses tended to trust independent third party ratings, while a majority of consumers considered reviews from actual customers to be more trustworthy.
  • Businesses’ greatest area of concern was false and malicious reviews.

More recently, a “mom-centered” site called momconnection.com surveyed 583 mothers with children under 12 (out of their panel of 5,000 moms) about social media and its role in helping them make buying decisions. The study found that utilization of social media was very high: 81% of the respondents said they were members of Facebook (but only 23% had Twitter accounts) and 60% reported visiting a social networking site in the previous 24 hours.

Moms Already Social Shoppers

via momlogic.com

The study also found that personal recommendations were by far the most powerful drivers of purchasing behavior, a phenomenon we have noted before. In its research brief on this study, Mediapost found it “surprising” that only 24% of respondents reported using Facebook in making a purchasing decision, and that far fewer used MySpace or Twitter.

We don’t find this data surprising and we certainly don’t find it troubling. First, social shopping is relatively new, especially on social networks like Facebook and Twitter which only recently have become business-friendly. Just as overall utilization of social networks has increased dramatically over the past few years, we fully expect that utilization for exchanging information and experiences about brands and products will catch up. Especially because, as the research indicates, moms interact with brands at a very high level. Not only did 81% report visiting a marketer’s web site for product information, 36% reported becoming a fan of a marketer on Facebook (which is a little difficult to reconcile with the 24% figure cited above).

What does surprise us is how many major brands haven’t fully committed to social networks as a marketing medium. How can moms be expected to use Facebook to connect with marketers if marketers in the categories moms care about aren’t using Facebook to connect with them? So if a mom says she doesn’t use Facebook to help her decide which breakfast cereal to buy, it may indeed be that she just isn’t comfortable using social networks to crowdsource purchase decisions, but it could be that the brands she cares about haven’t given her a reason to try.

Another interesting finding from this study is how moms get and share information about products. Although personal recommendations are by a wide margin the preferred medium, 41% of respondents report consulting “mom-focused web sites” for information (presumably including the sponsor of the research) and 34% get information from shopping web sites. 54% have shared their opinions by rating or reviewing a product online and 37% have posted about a product in an online forum or blog. For a group that doesn’t obviously include large numbers of early adopters, we think this shows a reasonably high level of engagement with social shopping.

If moms are already using socially-oriented web sites – but not Facebook or Twitter – to help them make better purchasing decisions, it may be that they have figured out which sites offer relevant content and a valuable experience and aren’t limiting themselves to the big social networking brands. That suggests two things: first, that as marketers make better use of Facebook and Twitter they will find a ready audience of social shoppers. And second, that consumers are willing to use social shopping web sites that don’t have the brand strength of Facebook and Twitter, at least so long as they provide value to the consumer. As observers of social media marketing we are confident about the first observation. As developers of a new social shopping platform we are optimistic about the second.

Update: This post about the Maclaren stroller recall illustrates how active moms are on social networks, and how much influence they can have over marketers.

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