Social commerce has a simple value proposition, i.e. it makes it possible to measure and manage word of mouth.
Multiple studies into this subject have thrown up some interesting findings
- 62% of online shoppers have read product-related comments from their friends on Facebook
- 75% of shoppers who read social sharing comments have clicked on the product link in their friends’ Facebook posts, taking them to the product page on a retailer’s website
- 81% of consumers who purchase products they learn about through social sharing are valuable social sharers themselves, thus creating a cycle of sharing and buying.
- 32% of visitors are more likely to stay and shop on a site that shows activities of shoppers who have purchased there.
Read Social Impact Study 2012: Social Sharing as Helpful as Google Search in Shopping
What this study shows is that social commerce is that social media content can generate strong word of mouth which can be manoeuvred to generate sales.
The power social commerce can be understood using referral economics of word of mouth. Let us take an example of Apple Computers to understand this better
Source: Net Promoter Economics: The Impact of Word of Mouth
This example shows that an influencing existing customer generates approximately $1927 additional revenue for Apple.
Facebook and social commerce
Forrester Research’s Gina Sverdlov has done an extensive study on THE FACEBOOK FACTOR – Quantifying The Impact Of A Facebook Fan On Brand Interactions. According to her, “Using regression techniques, the study provided evidence to support the insight that your Facebook fans are more your most valuable customers.”
(customer value = purchase value + referral value)
“Specifically, the study found that fans of a range of brands (the study focused on Coca-Cola, Blackberry, Best Buy, Walmart) are significantly more likely than non-fans to
- Consider buying
- Purchase (79% vs 41%)
- Recommend (74% vs 38%)”
What is equally important to understand here is that boosting the number of fans on a Facebook page (Hilariously chronicled here: Arre Sir, We Will Get You 2250 Fans. That’s Our Headache!) isn’t the solution to exploring the commercial aspect of your page.
While dealing with Facebook fans always remember:
- The power of the Like button is not that it creates fans, it IDENTIFIES them.
- Your Facebook page is like a honey-laden flower that ATTRACTS your most valuable customer and lets you target them.
Instead, reward your fans. Use your page to drive up engagement. Will soon do a follow up post on how to increase engagement on your Brand’s Facebook page
Originally written for my Blog.
Do share your thoughts.