Monday, October 11, 2010

eCommerce Rule #10: Keep it social, but keep your data too

Social media isn’t just for promoting and evangelizing. Sites like Facebook and Twitter now need to be considered a core part of any e-tailer’s sales and marketing strategy. People are spending an increasing amount of time on these sites—a recent study by Nielsen showed that people now spend 22.7% of their time on social networks, up from 15.8% just a year ago. Moreover, according to eMarketer, 41% of all U.S. Facebook members connect with fan pages to highlight their favorite brands.

An extremely connected and network consumer has allowed companies like Groupon to take off, and we expect there will be many new eCommerce models that will emerge to leverage consumers’ social graphs. But all eCommerce companies can benefit from social media, if done right.

That means more eCommerce execs are paying attention to “Like” buttons and corporate fan pages, which allow marketers to run promotions tightly integrated into Facebook’s feature set and social graph. Brands can also broadcast updates, like coupons and special promotions that appear in users’ news feeds. Quick tip: Studies show that Facebook users are more likely to engage with an offer presented on the site if they don’t have to leave the Facebook ecosystem to do so. Another best-practice we hear is that Facebook fan pages are most effective when the merchant starts conversations with its followers (e.g., by asking a question) instead of just “pushing” offers out to its fans. If you want to have a best-in-class fan page, check out 3rd party products like Involver (BVP portfolio company).

But beware: While it might sound like a great idea to add Facebook Connect integration and Facebook “Like” buttons to your e-commerce site with the hopes of attracting viral traffic from Facebook, proceed with caution. When your customers click that they “Like” a certain product on your site, Facebook records that data and then lets companies target those users with advertising. Essentially, you’re giving your competitors data they can use to target your customers on Facebook. Depending on what you sell and how competitive the market is, it might be worth the risk, but tell your employees to let you know if they notice that they are being targeted by ads from your competitors. If you see one of your competitors showing you an attractive offer, you’ll know why.

If you’re unsure how to best leverage Facebook and Twitter, don’t stress about it. Remember: However social-media trends play out, consumers will always, always want three things when they shop online: lower prices, more selection and better service.

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