A Business Technology Place

Social commerce is gaining momentum

I love the idea of social commerce.
I’ve worked for years in and around eCommerce operations and expect to continue to do so for the remainder of my working days. eCommerce is an engine that drives revenue for a business while providing a touch point for customers to a brand and a set of products and services. The technology, platforms, and interaction styles will change over time. But with each change eCommerce blends into different variations of electronic commerce that center around marketing, media, and operations.The Social Commerce Blend

One such area that is starting, and I expect will grow as well, for retailers is social commerce. The big idea behind social commerce is to get consumers to collaborate while shopping online. The consumer becomes part of the eCommerce engine by helping with product creation, marketing, and even sales. All of this is the result of blending social media, digital media, and eCommerce.

In many ways the growing influence of social commerce for retailers is similar to the impact social media is having on the news media.  Media outlets are now using consumers to spread viewership to articles, videos, polls, etc. by sharing the links with their friends and family. Retailers will try to follow this trend by allowing consumers to be brand advocates, designers, and sales engines within their own spaces.

Would you buy a hip Converse shoe designed by your kids?
Paul Chaney of Social Commerce Today discusses a good example of all this with the article  Converse Facebook app for designing a Converse tennis shoe. The test is to allow the customer to design the tennis shoe and then open a store within Facebook to sell it to their friends.  Can’t you see this working with middle school aged kids where everyone wants to be the same and not stick out in the crowd? It also opens the door for thousands of more ideas and expands the reach of what the existing designers and sales group within the company could do.

Reality catalogs?
Another example is from online fashion retailer Zara called People!. The idea is to create your own look by posing with items from the Zara catalog and then submit your picture back to them. If the contributors photo is selected it is published online and the contributor is paid.  People like reality TV because it shows more everyday people in situations that might be real. I can see the catalog photos acting like this as well. Show me someone that looks like me rather than a fully staged model.

This is a healthy evolution of digital social media.
I realize brand advocates and referrals are not new to a marketing strategy for a business.  The difference here is the use of interactive digital media to scale the reach of the customer. In the past word-of-mouth referrals happened one-to-one based on conversations. With social media sites, the customer can get a message reach to hundreds/thousands of connections all at once.

Does this get us closer to answering the discourse about the ROI and financial contribution of social media? It certainly helps when there are activities that are trackable and revenue that is measurable. Expect more brands and marketers to try find the right combination of getting their customers to be a revenue producing connection with social media.

What do you think about the growth potential of social commerce?

Word of mouth marketing. It’s a matter of focus.

Word of mouth marketing is like the gold at the end of the rainbow for eCommerce operators and marketers.
It’s a dream that many follow but few achieve. Word of mouth marketing (WOMM) is the ultimate marketing tool. Wikipedia defines it this way, “an unpaid form of promotion in which satisfied customers tell other people how much they like a business, product, service, or event. Word-of-mouth is one of the most credible forms of advertising because people who don’t stand to gain personally by promoting something put their reputations on the line every time they make a recommendation.” Word of Mouth Marketing

Social media makes word of mouth marketing fools gold.
Marketers face a big temptation from social media because it provides an easy medium to support WOMM. Social media enables messages to scale and multiply because with social sites each person has a network they can communicate with very quickly. Social media doesn’t require face-to-face contact and can quickly jump to additional people circles. The trick for marketers is to determine how to get people to share their experience with the product or service.

Therein lies the problem. The focus for WOMM is not about convincing people to talk about your products. It’s about giving people a reason to talk about your products and services. The social media aspect is useful because it makes it easier for people to share your product and services with others. Customers talk to prospective customers not because marketers convince them to, but because of the experience they have with the product.

Word of mouth marketing originates from seeds within your company culture.
I don’t think I’m out of place to say that WOMM doesn’t come from a focus on turning profits and making money. I’m not arguing against the fact that companies exist to make money. I recognize that companies are in the business of making profits. But where is the focus of the business? Is it to provide the best customer experience possible? Is it to continually innovate products and services that wow customers to meet a need? Profits come as a result of satisfied customers.

A great example of this is Southwest Airlines. The are well known for winning customer service awards and have a great loyal following. This is an airline folks! In an industry where its common place to criticize and share bad experiences, Southwest uses service tactics such as games and activities when flights are delayed. They don’t charge customers a fee when they want to check a bag at the counter. They maintain a low ticket price. Oh, and this is a profitable company. But it’s a company focused on customer service and they have a string of customer service awards to prove it.

My argument is that WOMM comes from companies obsessed with finding connections with customers through their products and services. Not companies obsessed with finding profits through price increases, fees, and sales trickery.

What is your obsession and focus?
People don’t like recommendations from friends if it feels like a sales pitch. The message still has to be relevant. This is why product reviews and sites like Angies List are popular. Even the power of recommendations from a stranger hold weight for persuading purchases.

Customers feel the urge to do this based on their experience with the product, not from the pleading of your marketing copywriters.

So to find WOMM, we have to first find our focus.

Find me the money. Some practical thoughts on ROI.

Long before Jerry Maguire stated “show me the money” marketers have scrambled to show a return on investment, advertising, and marketing activities. But how well are marketers showing their stakeholders the money? It’s not a primary component of the marketing budget process according a survey review by Jack Neff of Ad Age. In fact, according to the survey, more CMOs rely on historical spending to set budgets than projected ROI.

But I don’t think that is necessarily a bad thing. A budget after all is just a plan for spending. The amount of spend required for services related to marketing is generally known by way of existing contracts, published price schedules, and yes historical spend.Geek and Poke ROI

So where does projected ROI fit into the budgeting equation? The answer is that the budget can be considered more than an exercise to control costs and plan to spend. It should also consider spend for *return as with capital projects.

Tracking and projecting returns on marketing efforts is not always easy and I’ll argue shouldn’t always be necessary. If the marketing activity is an ongoing event, then there should be some level of tracking available whether by electronic means or post sale surveys. Tracking helps forecast returns. New activities are more difficult because there is no baseline of activity from which to compare.

But digital and social media have muddied the waters on ROI calculations. In part because there is an abundance of data that can be measured and tracked and that creates noise to what is really important. But additionally because digital and social media create a web of consumer touch points that may lead up to a sale. Just how many times does a customer touch your marketing messages before they purchase? So analytics solution providers are increasing their ability to track Channel attribution as the technology creates more touch points before a sale.

So how does a marketer justify spend on activities for advertising, marketing, and engagement? First there needs to be an agreement that a component of marketing is trial and learning.  Sure marketers must eventually get to sound ROI and solid business decisions. But to get there requires some level of test and learn which could mean a negative ROI.

A typical marketing budget should contain three high level items: Advertising and Operations, Labor and Administration, and Trial and Measure (aka R&D).

Advertising in this case is for activities related to existing products and services. These activities are held to stricter standards for producing a return and marketers should use measurement tactics to justify the spend. It’s part of the run-the-business and go-to-market tactics used by the company to meet strategic goals.

Trial and Measure for the marketing department isn’t so much about the expense to develop new products and services for the company. That’s research and development (R&D) in the products area. Trial and measure allows marketers a chance to experiment, measure, learn, and adjust. It’s an important part of marketing and feeds larger money spend in the advertising area. It also helps to create forecast models for larger advertising investments. It’s the trial and measure area where marketers need a bit of freedom from all the pressures of ROI.

A great example of this is usability tests on eCommerce sites. Marketers can see big changes in key metrics by changing words, colors, or button locations on a web page. It requires programming time and thus an investment. But it’s usually these types of simple changes that find a respectable pay-off because they make purchasing easier for the customer.

Another example is merchandising techniques such as image location, image rotation, product reviews, etc. What works for Amazon may not work for everyone. It has to be tested with the specific products and services in the store.

So yes. Show me the money is a solid business principal. But let’s allow marketers to find the money first.

A small business case study for social media use

Nancy Wallace of Suwanee, owner of Wallace Gardens, is living testament to entrepreneurial persistence and using digital media to connect with customers. Many business owners are challenged to determine how social media can positively impact their business. They struggle with questions about the return on investment for social media and how to connect with customers to generate sales.

Wallace has made the connection linking technology to business. She is reaching customers on multiple social platforms using vivid imagery to show her work in gardening and horticulture. What makes the story more remarkable is that Wallace isn’t a natural born tech guru. She’s made tech work for business through hard work, dedication, and natural problem solving.

“The social media platform is my storefront.” – Nancy Wallace

The website – wallacegardens.com
Her first task was to create a website. Wallace took classes at an Apple store and learned how to build a web site herself. “I have the gift of knowing what I don’t know,” Wallace says. She wasn’t afraid to ask for help and was anxious to learn.

The result is a functional site that provides information about the services she provides as well as contact information. Viewers will also see some animated picture files on the site, a trick Wallace says she learned from her instructors.

The tagline reads Creating beauty with botany by combining flowers, trees, and shrubs. “I wanted something that didn’t sound run of the mill,” Wallace says. “I didn’t want to sound like a landscape installer, because I am a designer first and foremost.”

Pinterest board: pinterest.com/sassynancy/wallace-gardens-scrapbook
Pinterest is a social photo-sharing website that allows participants to “pin” digital photos in a theme-based collection. Wallace determined that she could use Pinterest to post photos from her job sites. It has become her online portfolio that she can share with both existing and prospective clients when discussing new design ideas.

“I have a color based business. I need colors to make a connection with my clients.” – Nancy Wallace

When she works with a client she uses a Pinterest board to collect pictures and then sends the client a link. This creates a visual for the client and an interface for a conversation. The Pinterest board has become a very functional part of the business as it drives new sales.

Blog: wallacegardens.tumblr.com/archive
Wallace uses a blog site not as a collection of words or commentary about her industry, but as a collection of photos. Unlike Pinterest, the pictures on the blog are not about her work portfolio. Rather, they are about her gardening interests. The blog is a place for Wallace to connect with others in her industry and those that share her same interests and passions for gardening.

Twitter: twitter.com/#!/sassynancy
Wallace uses Twitter to cross-post links to her blog and Pinterest board. You might also find her connecting with others on gardening topics or other topics. Tweets have to be short, as in 140 characters or less. But Wallace has a distinct audience that uses Twitter, and it’s another place for social connections. As of the writing of this article, she has over 1,200 followers.

Facebook: www.facebook.com/NancyWallaceGardens
Wallace also has a presence on the most popular social media site in the world. It’s full of photos and provides Wallace with a connection to people who may not use some of the other social media sites. It’s a community page about gardening on Facebook. What’s not to ‘like’ about it?

Wallace says that her business is a “2009 product of the recession.”  She has been a practicing garden designer since 2001 and was previously a co-owner Grass Roots Girls in Suwanee. In 2008, her previous business started to struggle as the result of the construction industry slowdown along with drought conditions in North Georgia. The conditions led to more outstanding invoices and fewer service jobs to keep the business alive.

So Wallace left her previous business to start Wallace Gardens with a small list of about 20 clients. They were her seed clients to help her get started. “I didn’t know if I was going to be around a year later,” Wallace says. During this time she was interviewed by National Public Radio (NPR), Weekend Edition for a story about the economic downturn squeezing the middle class. Then a year later NPR featured her and two other small business owners in a follow-up interview about the US economy.

Her next digital “to do” is to start using video in combination with photography. She may develop a YouTube channel and has already registered the Twitter handle @60SecondGarden.

“My story still continues, I am still here, and I am very grateful.” – Nancy Wallace

 

This post is from my column on technology and business from the Suwanee Patch.  I cross-post the entire contents here for the Merchant Stand audience. The original version is posted at http://suwanee.patch.com/articles/she-s-leaving-a-digital-footprint-in-her-gardens

The next paradigm shift in news delivery

Let’s stop using Facebook as the measuring stick for other social sites.
Say what you will about Google+, but Google continues to support and promote the platform as a connection tool. This week they announced improvements in the mobile application that makes it more visual, easier to use, and creates mobile inter-connectivity with video hangouts.

I don’t think we’ll ever see another social platform with the same number of eye-balls as Facebook. But it is with Facebook that Google+ is most often compared. That’s unfortunate, because only measuring a social platform by the number of users and the time spent on the site is short sighted. We really need to look at the social site in context of what it offers, the connections it makes, and ultimately if it fits into a revenue model for sustained viability and relevance.

This post isn’t about Google+, but it supports a feature that is creating some important changes.
Hangouts. In simple terms it’s a multi-point video chat that supports up to nine people. That’s pretty cool for friends looking to converse or families looking to connect. It’s a feature right now that separates Google+ from other social platforms.

But there are other uses for Hangouts as well. Here’s a discussion with Google product managers about features in a software application. Mitt Romney was the first US presidential candidate to use a Hangout for a town hall session and President Obama has used hangouts as well. So politicians and businesses from multiple industries are starting to use hangouts for touch points.

The news media continues to adapt and evolve with digital media as well.
I’m intrigued by the changes in the news media industry to connect more with readers/viewers in the information age. Earlier this year I wrote about how social media is affecting the news media, But now I’m noticing that media outlets are beginning to use live interactive video with viewers to create a new level of engagement.

The New York Times is experimenting with Google+ hangouts to discuss global issues and other news topics and Patch.com is experimenting with live chats and uStream channels. This is the beginning of another paradigm shift in the news media industry as the readers and viewers of the media become part of the news story by participating in discussions and offering their opinions and observations on topics.

Proactive news agencies are already starting to adapt and experiment as “readers” become “viewers” online. It’s those viewers now that won’t just receive the news, they’ll take part in delivering the news. Think about that and go get familiar with a digital hangout.

Disclaimer: I freelance for Patch.com although a different patch site mentioned in this article.