The debate continues on blogs and in corporate board rooms around the world. “Should our company get involved in social media?” “Do the potential benefits outweigh the risks?” “Is it worth the investment?”
Short answer? YES.
The internet and consumers don’t care if you have an official representative or not – they are still going to talk about you. They will review your goods and services on 3rd party sites like epinions.com, ConsumerReports.org, Yelp, TripAdvisor, TestFreaks, and the myriad of other sites that have cropped up to do one thing – become the go-to place for consumer research and reviews. A recent study by BIA/Kelsey Group revealed that 97% of consumers now use online media when researching products or services in their local area.
Victoria’s Secret, the infamous underwear maker, has two “Fan Pages” on Facebook. One for the regular store which boasts over 3 million fans and one for their Pink line with over 2 million fans (a year ago it was at 900,000). Fans can watch videos, browse merchandise, enter contests, talk about products, and upload their own photos. Victoria’s Secret is even celebrating their 3 million fan status on Facebook with a limited edition panty that the FANS got to help design and vote on. By actively participating in what their demographic is doing, Victoria’s Secret remains relevant and accessible while keeping a hand in how their brand is represented. In addition to the official and authorized Fan Pages, there are also over 800 other Victoria’s Secret themed Fan Pages and over 11,000 Groups on Facebook alone! Corporate Victoria’s Secret knew they needed an “official” presence to combat and/or complement all of the dialogs going on about them.
Its hard to put a price on brand exposure, but by participating in popular social networks or hosting a targeted community for customers, companies are bringing their messages to waves of fresh consumers while building brand recognition and increasing brand awareness. Consumers are already actively rating and reviewing products, services, companies, people and even each other. Companies know that they need to have a hand in the way their brand and products are portrayed, and so are joining networks and creating their own. Grocery store chain Whole Foods has over 1.7 million followers on their main Twitter feed, but many stores have their own accounts as well creating and controlling a giant network around the hip trend in natural and organic foods.
So, yes, social media CAN hurt you- if you put out a terrible product, people will rant about it. If your technician falls asleep at the customer’s house – chances are that video will go viral (like the Comcast technician). But if you respond to your customer’s complaints, approach social media with an air of transparency, and engage in an open dialog with consumers, you can create a rabid fan base who will talk about you, promote you, and defend you.
Below are some statistics on consumer reviews as they affect sales:
• The Shop.org State of Retailing Online study, conducted by Forrester Research, found only 26% of the 137 top retailers surveyed offered customer ratings and reviews, but 96% of them ranked customer ratings and reviews as an effective or very effective tactic at driving conversion. (Forrester)
• Consumers say that word of mouth is still the number one influencer in their apparel (34.3%) and electronics (44.4%) purchases (Retail Advertising and Marketing Association/BIGresearch Study, November 2008)
• Online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions. (“Social Networking Sites: Defining Advertising Opportunities in a Competitive Landscape,” JupiterResearch, March 2007)
• According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study’s respondents. (Nielsen, “Word-of-Mouth the Most Powerful Selling Tool”)
• 70% of online consumers said they use the Internet to research everyday grocery products. (Prospectiv, 2008)
• The majority of electronic consumers researched online for an average of 12 hours before making a purchase, according to a Consumer Electronics Association and Yahoo! Study released in 2006, even though the majority bought their purchases offline through retail stores. Seventy-three percent searched the net because it was easier to compare prices. Sixty-four percent simply found more variety online.
• According to new research in December 2008, UK company 1&1 Internet found that two-thirds of online shoppers carry out internet-based research about retailers before making a purchase and nearly half of UK shoppers read online reviews or recommendations about specific products before buying them.
• The two leading reasons people contribute content to social shopping sites are the need to feel part of a community (31%) and recognition from peers (28%). (IBM Institute for Business Value, August 2007)
• When asked what sources of information they are “very likely” to consult before making a decision about their entertainment options, 62% named Web sites with user reviews as their top choice, even beating out a knowledgeable friend (59%). (Marketing Sherpa, July 2007)
• 81% of Online Holiday Shoppers Read Online Customer Reviews (Nielson Online, December 2008)
• 86% of consumers read online business reviews before making purchasing decisions; 90% of whom say they trust these reviews. (Kudzu.com survey of 600 users, December 2008)
• 91% of millionaires say they always or often look at reviews before buying luxury goods; 68% of ultra-affluent shoppers use consumer reviews. (Unity Marketing/Google study, reported in AdAge October 2008)
• Satisfaction for those who recalled customer reviews on the retailers’ site is 10% higher than those who said there were no reviews offered. Loyalty increases, too: 7% higher likelihood to purchase online, 8% greater likelihood to purchase from the retailer next time they’re buying similar merchandise and 11% greater likelihood to recommend the site to others. (30 UK Online Retail Satisfaction Index, January 2008, ForeSee Results)
• 83% of shoppers said online product evaluations and reviews influenced their purchasing decisions. (Opinion Research Corporation, an infoGROUP company, July 2008)
• 74% agree—including 14% who strongly agree—that they choose companies and brands based on what others say online about their customer service experiences, the survey shows. (Society for New Communications Research, May 2008)
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Tags: branding, Corrie Davidson, engagement, roi, Social Media
http://growsmartbusiness.com/small-business-success-index-highlights/
The SBSI found that nearly one out of five small business owners are actively using social media in their business.
75% surveyed have a company page on a social networking site
61% use social media for identifying and attracting new customers
57% have built a network through a site like LinkedIn
45% expect social media to be profitable in the next twelve months
Another great blog article along this topic is “5 Ways Social Media Impacts Consideration” by Adam Cohen
http://adamhcohen.com/5-ways-social-media-impacts-consideration
“…social media provides definitive means to impacting the “consideration” phase – when a customer makes the leap from awareness of a brand or product to evaluating, before committing to make a purchase…”
You are making an excellent point about companies focused on tactical use of the social media, however many of them struggle to measure strategic impact of it on their product and brand value.
I have seen a lot of money being invested on technology to monitor what is being “said” without any clear vision of how these data bits are going to be converted into actionable information, and subsequent knowledge.