Social Media ROI: Turning Conversations Into Conversions In 2013

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Social Media ROI: Turning Conversations Into Conversions In 2013

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Social Media ROI: Turning Conversations Into Conversions In 2013

Whitepaper

Social Media ROI:

CASE STUDY

Turning Conversations Into Conversions In 2013 Turn on your phone, open your iPad, boot up your laptop, turn on your PC. The chances are you’ll do what millions of others are repeating all over the country – checking their Facebook updates, seeing what their Twitter followers have said, and going through their bespoke feeds.

Social media has started your morning.

Social Today According to Bain & Company’s Putting Social Media to Work report, more than 60% of internet-connected individuals now use social media platforms every day, spending 22% of their time on social media websites. It has quickly spanned the generations: women over 50 are the most active group on LinkedIn; people aged 45-54 are 36% more likely than their counterparts in any other age group to use Twitter; while the number of 55-and-older Facebook users grew 513.7% in the first six months of 2012.

For younger generations that tend to access social media via their mobile devices, a recent report revealed that one in-five young Britons would rather starve for 24 hours than go without their mobile phone.

Facebook and Twitter – the social media monoliths that took the baton from MySpace – both launched in 2006 and both celebrated significant milestones in 2012: 33 F acebook famously hit the magic one-billion users mark (half of which log on every day).

33 O n its 6th anniversary, Twitter announced having 140 million users, and that it was growing at 1 million per day. Members now collectively send 340 million tweets a day, compared to ‘just’ 400,000 tweets a quarter in 2007.

Survey Results: So How Engaged Are UK Businesses With Social Media Today?

A new survey by Brand Republic and Bazaarvoice has highlighted increasing engagement of businesses with social media. 70% of respondents said that their businesses were “quite” or “very” engaged with social media. 31% also now have a dedicated social media team within their marketing infrastructure.

There were only 48 instances where firms said they were “not very engaged” with social media and just 2% asserted that they were “not at all engaged.”

Brand Republic and Bazaarvoice’s finding that marketers are very engaged with social media is something that is consistently substantiated by other surveys.

According to the 2012 Social Media Marketing Industry Report 83% of marketers indicate that social media is important for their business.

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Multi-channel shopping meets multichannel social media The explosion of ‘channels’ is, in a strange way, also bringing about convergence. As shopping has become multichannel (phone, online, in-store), so this is being mirrored by the multiple channels social media exits on. It’s no wonder that marketers want to bring them together to create market value.

Argos, the multichannel retailer (which now sells 46% of its products online or through mobile devices) wanted to ensure it kept pace with change, by making sure it could have the same usergenerated content across all its social media channels. (Argos relies on social media across the channels to boost website visits and sales).

Working with Bazaarvoice, the retailer now achieves £4.36 in ‘referral sales’ (through 3,0004,000 transactions) for each ‘social alert’ email Bazaarvoice sends.

This is achieved by the system telling customers when their product reviews have been posted, which encourages more traffic and more conversations.

Implementing Bazaarvoice Conversations led to 1.6 million pieces of customer content being generated across its social media channels. As Argos largely sells through non-traditional channels like catalogues and kiosks, where shoppers can’t physically experience the products, connecting this information for shoppers is a strategic priority for Argos that Bazaarvoice helped it achieve.

Using customer reviews across all channels is also paying off: It leads to 36% higher click-through rates than channels without customer feedback.

Social Media ROI: Turning Conversations Into Conversions In 2013

Whitepaper

Crossroads: Marketers Are Shifting Focus To Social Commerce.

The sheer critical mass of social media today, coupled with increasing pressure on driving value, is leading marketers to a crossroads – social media needs to perform better on the bottom line but this requires the right strategy. This has resulted in a shift in focus away from the slightly haphazard social media strategies of old - social media strategies are becoming social commerce strategies.

Marketers’ shift in focus is clearly evidenced in the survey conducted by Brand Republic and Bazaarvoice entitled Social Media ROI: Turning Conversations Into Conversions.

225 UK marketers participated, with a massive 73% revealing that their social and ecommerce strategies were either “extremely integrated” or “partially integrated.” Just 14.5% cited that the two strategies were “not at all integrated.”

Survey Results: So, What Is Social Commerce?

The majority of social media strategies thus far have hinged upon paid-for campaigns on social networks or initiatives to bolster “likes” or fans. But each, in isolation, have their sceptics.

For example Facebook – the leader of the pack – recently suffered pre-IPO embarrassment when General Motors decided it was pulling out of social media advertising on the site, saying its activity had “little impact on consumers.”

Forrester research analyst, Nate Elliott, followed this up by questioning the efficacy of the social network’s advertising, “Somehow Facebook still hasn’t stumbled upon a model that’s proven consistently successful for marketers, or that brings in the massive revenues to match the site’s massive user base.”

Focusing solely on building likes or fans also has its detractors with 68% of those surveyed by Brand Republic and Bazaarvoice finding it hard to trace the value of this activity on the bottom line.

So, what is social commerce then? Well, social commerce is broader than just social media advertising or building “likes” or fans. Social commerce involves employing user-generated content as a data source to fuel insights that deliver value back to the whole business – from product development through to customer service, marketing strategy, innovation and ultimately sales.

To help highlight how marketers are adopting social commerce as their key social strategy, we’ve used the survey results to pinpoint three key fundamental steps.

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Social Media ROI: Turning Conversations Into Conversions In 2013

Whitepaper

Social Commerce Step 1: Insight, Insight, Insight

CASE STUDY

The Brand Republic and Bazaarvoice survey points to an increase in the gathering of customer insight from social media sites. This, if done right, can feed invaluable information to many business areas from customer services through to product development, marketing and sales. If done wrong, or not done at all, the result is often that various business functions usher in the potentially disastrous risk of keeping their customers at arm’s length. At a time where most businesses are striving to become customer-centric, harnessing user-generated insights is a trick that marketers cannot afford to miss.

In terms of gathering user generated content – the majority of those surveyed currently collect likes and posts from Facebook (65%) and tweets from customers on Twitter (67%). Just under half collect ratings and reviews and over half collect questions and answers. Of those that don’t collect any of this information, only a small percentage have no plans to do so in 2013.

The results also suggest that at a time when social media is exploding, UK businesses could arguably be polarising their outlook by concentrating their data collection on just a few narrow areas, with Facebook and Twitter being by far the dominant channels.

The growing number of online communities may well lead to a need for marketers to broaden the points at which they collect customer sentiment and insight. Other popular channels that sit under the social media umbrella include media-sharing sites such as Photobucket, Flickr, and YouTube (4 billion YouTube videos are now watched not every year, quarter, month or week, but every day).

There’s still life in Facebook yet Don’t ‘unlike’ Facebook yet.

House of Fraser – the 160 year old traditionalist has recently turned to the social media site with great success. During the 2011 Christmas season, House of Fraser partnered with Bazaarvoice to launch ‘You Shouldn’t Have!’ – a promotion encouraging visitors to House of Fraser’s online shop to share stories of the strangest/ most hideous festive gifts they’d ever received. The store then targeted socially engaged customers by emailing everyone who’d written reviews or submitted questions on the website or who had ‘Liked’ House of Fraser on Facebook. Their key motives here were best described at the time

by Andy Harding their eCommerce Director, “We want our customers to see the House of Fraser website not only as an online shop with merchandise to sell, but also as a place that can inform and inspire them. We wanted to motivate visitors to share their stories with each other, bringing them back to the website time and again.”

So what were the results? House of Fraser received 908 stories in just one month, helping re-enforce the perception of their web-store being an exciting and engaging destination, bolstering traffic to their website and ultimately, sales.

Social media also includes bookmarking sites that allow users to tag content they find online and share it with others (such as Delicious, Digg, Reddit), as well as live streaming sites (like Justin.tv) and location-based social sites such as BrightKite and blogs and wikis. Virtual game worlds (such as World of Warcraft) and virtual social worlds (such as Second Life) also form part of this mix.

The worth of the insight collected from each web portal differs between organisation and product types, though the vital importance of collecting valuable insight has clearly been acknowledged by marketers.

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Social Media ROI: Turning Conversations Into Conversions In 2013

Whitepaper

Social Commerce Step 2: Use Your Insight The Brand Republic and Bazaarvoice survey points to the fact that marketers are making increasing use of the insight they collect via social media, to inform different business areas and unlock the full potential of their social commerce strategy. But there is still further to go here.

For example, nearly a third of social media insight is now being shared with ecommerce teams and 48% is shared with sales or market development teams. But it’s not just the teams that are close to the front line of sales that are benefitting from social media insight. 40% of respondents now share it with their customer services team and 26% with their product/innovation team. 12% even share social media insights with their HR function.

Sharing these social media insights with other departments is the first step in putting the customer’s voice at the very heart of an organisation. This empowers marketers to deliver and demonstrate far wider value across their entire business and highlights the importance of a social commerce strategy.

CASE STUDY Using data as intelligence Customer ratings and reviews have become essential to Dell’s strategy for driving sales and powering innovation across its worldwide organisation since 2006. The company has measured double-digit growth in online conversion rates since working with Bazaarvoice to implement ratings and reviews in Europe, as well as a triple-digit increase in the number of reviews collected.

The intelligence that reviews provide internally leads to improvements in Dell products, services and solutions that will ultimately improve client trust, satisfaction and loyalty.

Dell has seen many instances of the company making product improvements based on insight gained from reviews. One of the company’s current notebooks, for example, has 20 features that engineering changed from one generation of the product to the next based on customer feedback. Customer-driven changes cover the spectrum from thermal improvements, to ergonomic alternations, to design enhancements and the list goes on. “For us, reviews were a very logical step in our journey to become more customer-centric” Michael Buck, Executive Director, Global CSMB Online Marketing and Marketing Strategy, Dell.

Social Commerce Step 3: Show Me The Money The survey underlines the fact that social media is driving far more widespread returns for businesses than in years gone by. Brand awareness is still the biggest benefit here with 70% of survey respondents citing this as an output of their social activity (arguably because it is easier to achieve or at least lay claim to) but it is being caught up.

Aside from brand awareness, the survey revealed many other reported benefits of using social media. Despite so much conjecture as to the sales-driving potential of social media, around a quarter of survey respondents reported a demonstrable sales uplift, just under half reported SEO and web traffic improvements and just under half cited improved customer-centricity in their marketing. The benefits also ranged beyond the more obvious marketing benchmarks though with 18% of respondents recording improved product development and innovation using social media.

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Social Media ROI: Turning Conversations Into Conversions In 2013

Whitepaper As pressure on marketers to deliver more tangible returns through every channel mounts, they will increasingly look to social media for far more than just awareness.

The challenge for marketers is to collect the most valuable data, to share and process it in the most effective manner and to put in place KPIs and metrics to help demonstrate the full extent to which this is powering their business objectives.

So, how does this filter through in practice?

To give you one example among many, it was recently found that over a four-week period Starbucks’ Facebook fans and their friends were at a Starbucks 38% more than people who were not engaged with the brand on social media. Similarly, engagement with fans leads to engagement with their friends of fans. To add a sales case study to this, Argos now achieves £4.36 in ‘referral sales’ (through 3,000-4,000 transactions) for each ‘social alert’ email Bazaarvoice sends for them. This is achieved by the system telling customers when their product reviews have been posted, which encourages more traffic and more conversations.

Social Commerce: Moving Forward The momentum of social commerce does not look likely to dissipate anytime soon.

Particularly when considering Gartner Research’s recent report which predicts that half of all sales on the web will come from social commerce in 2015. What does that mean in pounds and pence? Around £19 billion according to Gartner.

The Brand Republic and Bazaarvoice survey highlights that more and more marketers are favouring social commerce over a less defined social strategy. They are collecting increasing amounts of information and insight about their audience in the form of reviews, comments, likes, questions etc. However, there is still clearly scope for more insight here in terms of the type of information being collected and its sources.

Regarding the usage of this insight and data, the survey reveals that it is clearly beginning to filter to more parts of businesses (not just marketing). This is resulting in the value of social media being felt in areas such as the customer-centricity of marketing, product development, innovation, customer services and ultimately increased sales.

There is undoubtedly more work to be done here but it seems that most marketers have wised up to the fact that the days of chasing “likes” and “followers” are numbered.

There is now a competing strategy in social commerce which enables marketers to harness social media to put customer insight at the heart of their businesses and truly turn conversations into conversions.

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Social Media ROI: Turning Conversations Into Conversions In 2013

Whitepaper

CASE STUDY Buyagift uses ‘Conversations’ to deliver dynamic customer service — and boost conversion rates by 171% 33 Buyagift stimulates authentic conversations with customers and users 33 Reviews build trust and better inform product offering 33 Reviews drive 10% leap in average order value Established in 1999, Buyagift specialises in offering customers great life experiences ,from skydiving to spa weekends to track days.

First run from founder Dan Mountain’s spare bedroom, it has now grown to employ more than 70 people working at its London offices.

Growing by around 20 per cent a year, success has seen the company expand into Europe, with operations in France, Italy and Spain.

Challenge Most people who purchase Buyagift’s products are not the ones who will actually use them — giving them instead to friends, family or work colleagues. This presented a problem: with no direct link between the company and its end users, customers were just the ‘middle-men’ and not in a position to comment on the experience. Customer conversations, however, are powerful ways of building customer trust and driving sales.

As Buyagift’s Digital Content Manager, Max Sydenham, explained, “We had no way of knowing how reviews were affecting our business — whether they were helping or hindering our sales.

And it really matters to us if our customers have a negative experience, so we can fix the problem — and, whenever possible, stop the same thing from happening to someone else.”

Solution In 2010, Buyagift approached Bazaarvoice to implement a more sophisticated customer engagement programme— harnessing the experiences of users, as well as customers. Like many great solutions, the answer was simple yet efficient.

In order to be able to use their gift, customers have to register their voucher online and this engagement is used as an opportunity to capture email addresses. Around three weeks later, recipients are then invited to rate their experience. In one seamless process, it delivers a range of benefits: 33 enables a direct connection to the people who actually use products; 33 enhances reputation by delivering added value to users; 33 encourages follow on sales; 33 shows users that the company cares about what they think about their experiences; and 33 allows the company to stimulate authentic conversations on its website.

Bazaarvoice has also found a way to provide retrospective review of experiences that haven’t actually happened yet, such as St Valentine’s Day packages. Customers are offered the chance to win a preview and to review the experience through a promotion on Buyagift’s Facebook page. Now, these products are supported by a wealth of relevant ratings and reviews, so customers can buy with perfect confidence.

Results From a point where the value of ratings and reviews was in doubt, with Conversations Buyagift now knows that its customers’ opinions are driving their business. During Christmas 2011, for example: the company’s conversion rate for people who interacted with reviews was 171 per cent higher than for people who didn’t; customers who interacted with reviews had a 10 per cent higher average order value; they enjoyed 200 per cent more page views per session; and spent 15 per cent longer browsing the site. Buyagift also harnesses reviews to describe their products in the ways, and focus on the features, that customers prefer. “We adopt the language that our customers use when they talk about our products, which makes the descriptions much more authentic and resonant,” said Sydenham. “That authentic customer voice tends to drive more clicks from visitors, which is what we want to see.”

Reviews inform all Buyagift’s marketing activities, incorporating them in print catalogues, email campaigns, website promotional banners and through Facebook and Twitter feeds. Incorporating word of mouth content into multiple communication touch-points ensures that consumers are reached where it is most convenient for them. In addition, Buyagift sponsors a ‘review of the month’ competition that generates even more, and more valuable, content.

Inspired by success in the UK, Buyagift is taking its review programme to France, Italy and Spain. “We’ll apply the lessons we’ve learned from our experiences in the UK to our international markets, and we look forward to having a positive effect on conversion, customer service, and overall marketing there, as well.”

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Social Media ROI: Turning Conversations Into Conversions In 2013