Social Commerce: Harnessing social media power during the buying process

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The word "social" in "social media" really means conversations between individuals.

In social media, those conversations happen "out there" - on social media sites. These conversations may or may not be related to a customer's buying process.

In social commerce, the conversations happen "right here" - on your own site, between your own customers, where and when your products are being sold. Frankly, I think it's one of the most powerful "operationalizers" of revolution we are participating in - the "voice of the customer" revolution. In social commerce, customer conversations directly affect conversion - and drive revenue. No amount of marketing copy can take the place of real customer ratings, reviews, answers, and stories.

Obviously, given my focus on supporting the customer's buying process, the whole concept of social commerce intrigues me. I'd been thinking about writing about social commerce for some time. I knew that Bazaarvoice was a leader in the space, so I contacted Sam Decker, chief marketing officer for Bazaarvoice, whom I've known for years.

Full disclosure: After we completed the interviewing process for this article, we started talking about doing some work together. I'm now interviewing a number of Bazaarvoice clients.

Here's a statement from Bazaarvoice that sums up their approach: "The key to success in social commerce is presenting the right customer-generated content at the right time in the purchase path, so all interactions bring real value to the consumer - and the business. Real, measurable value, like sales, increased search results, and repeat visits."

I'm particularly intrigued by emerging mobile applications, where a consumer can access ratings and reviews for a product, via a mobile device, while in a retail store. So much better than asking a retail clerk, who usually doesn't know the answer and adds frustration to the buying process.

Here's how Sam answered my questions:

What does Bazaarvoice do - for the customer and for the company selling to that customer?

We make it easy for customers to give feedback, ask questions, and share stories. We host the display of this content throughout our client company's website to help other customers make wise purchase decisions. [Bazaarvoice sells a platform that includes three hosted applications : "Ratings & Reviews," "Ask & Answer," and "Stories."]

We help companies leverage user-generated content to drive P&L impact: online and in-store conversion, higher average order value, higher site traffic, and lower returns.

As a secondary, but perhaps larger promise, we help transform our client's culture to become more customer-centric and respond faster to customer needs.

We are a "B2B2C" company, meaning our hosted online solutions (sold to businesses) are visible to consumers on major retail and brand web sites such as Dell, Best Buy, Costco, USAA and Samsung. [Note - these links go to product pages with Ratings & Reviews built into them.]

Who else is doing what you're doing?

There's no one doing exactly what we're doing, the way we're doing it. There are "lighter" solutions for smaller retailers. But our real competitor is the belief a company can do what we do with internal IT resources. The only one I know doing this successfully is Amazon.com, but they've been at this strategy for 12 years. Many who started with in-house builds have switched to our hosted technology and service, which includes consulting, moderation, analytics, integration with partners, etc.

Give me an example of what a client has done with your modules.

We signed a deal to host reviews for Oriental Trading Company (OTC), the nation's leading direct marketer of party supplies, arts and crafts, toys, and novelties. The day we were to go live, the CEO got cold feet (due to fear of negative reviews) and pulled the plug. About a year later, a new CEO came in – Sam Taylor, whom we had worked with at HP and Best Buy. He reinstated the contract, put our solution on his site, and received thousands of reviews in a short period of time. The content, as expected, increased conversion, traffic and average order value (we have over 40 case studies of this impact).

Bazaarvoice's social commerce platform enabled OTC to leverage direct customer feedback on their products and quickly respond across the organization, resulting in the transformation of over 700 products in five months. Teams meet weekly to discuss low-rated products, examine potential breakdowns in the process, and create plans to remedy situations. The teams include representatives of departments that formerly operated more independently, including Inventory, Product Development, Quality Assurance, Merchandising, Customer Service, and E-Commerce. Recently OTC received the 2009 Customer Experience Excellence Gold Award for how they used direct consumer feedback to improve their products and business processes.

What trends do you see in this space, both in terms of what companies are doing and what they're not doing? If they're not doing this and they should be, why aren't they?

The three hottest topics are social, mobile and multi-channel. And by hot, I mean most companies haven't figured them out!

As it relates to social, most CMOs struggle with what to do first, how to measure results, and how to scale a program. Facebook and Twitter continue to get attention, but people seem to mistake them for strategies, not tools. I think we're entering a phase where companies realize that having fans and followers doesn't really mean much in terms of the P&L. There is a trend to make social more measurable and integrate social activities into the fabric of the marketing strategy and business (including customer service).

A recent study we conducted with the CMO Club found that 64% of CMOs plan to increase their social marketing budget. But here's the kicker: in 2009, 72% of CMOs reported they had no measurement of revenue linked to social. But of that same audience, 95% of them expected to link up to 10% of the revenue to social marketing programs this year. That begs the question… how!?

I think this trend swings in our direction, for what we call social commerce. Simply put, it's tying the social interactions closer to products and shopping, and using the content and data in many ways to increase the impact of multiple marketing programs. This strategy brings social into the center of marketing and the products you sell, rather than being a pet project for a couple of people in the PR team.

One of the things I like about your service is that it will enable companies to do a better job of answering customer questions. In my upcoming book (and this blog), I talk frequently about how making a sale always involves answering customer questions successfully. And I find that most companies do a very poor job of this - they don't even know the questions that customers are really asking.

Have you ever had a question about a product before you buy? Yes. Do marketers do a great job of providing the content on a web site to answer those questions? Usually, no. I was in that position when I managed the Dell.com consumer site. When you are busy and insulated, it's difficult to create content that speaks in the customers' language, and keep up with content and copy that addresses questions where they need it. So, Ask & Answer simply puts the questions and answers in the hands of the customers, right where they need the content – it gives consumers a way to ask a question, publicly, of a brand, where the brand or another consumer can answer it (and others can benefit from these answers).

The service enables manufacturers (experts on their products) to answer questions during the online retail shopping experience. For example, "Mr. Samsung" answers customer questions within BestBuy.com. [Scroll down to the Q&A icon, then click on Ask. Answer. Learn.] They found that 91% of the questions asked were NOT addressed in marketing copy and content. What's more, by reading the questions and answering them, they were able to revise their marketing for all retailers to improve their sales. And as they answered questions, more customers felt comfortable asking questions. That may be scary in terms of scalability, but for the cost of a couple of people, they have answers on the leading consumer electronics retailer where hundreds of thousands of people are reading the answers they wrote once. Compare that to the investment required to answer evaporating interactions on phone, email or chat.

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Many company owners are afraid to bring the customer conversation into their own site, fearing negative reviews will appear just as the customer is trying to make a buying decision. Interestingly, as the CEO of Bazaarvoice mentions in this roundtable discussion, most word of mouth is positive. Across all of Bazaarvoice US clients, 80% of product ratings are 4 or 5 stars out of 5. Across all of Bazaarvoice UK clients, 88% of product ratings are 4 or 5 stars out of 5. (“J Curve,” Bazaarvoice and Keller Fay)

In a recent blog article, this is what Sam says about negative reviews:

Fearing negative reviews is a mistake. There are many case studies that show negative reviews, at least when mixed with positive ones, are a clear driver of sales. If all of your product reviews are glowing, people will be suspicious of their authenticity. What’s more, any customer-generated information about a product, whether it’s entirely positive or slightly negative, helps increase sales; even products with three-star ratings convert better than products with no reviews. If your site provides a mix of positive and negative reviews, that shows two things: that you are willing to give your customers the space to share their authentic opinions, and that you value their feedback. The mere presence of negative feedback on your site builds transparency in your brand.

What’s more, with a mix of both positive and negative reviews, customers are better informed about the features of your products or services – and informed customers make more purchases.

Embracing negative reviews means creating a proactive program to listen and respond to dissatisfied customers. Each negative review is a chance to make an unhappy customer happy, and to identify why certain products are falling short of expectations. Retailers such as Land of Nod, QVC, Rubbermaid, and Oriental Trading Company have embraced negative reviews as a way to analyze their customers’ authentic feedback to improve customer service, fine-tune merchandising, and even improve product manufacturing.

Why not have the customer stay on your site to read the reviews, rather than leaving your site to find those reviews elsewhere? Why not have those reviews and ratings pop up at just the right time in the customer's buying process? Why not answer the real questions that people are asking, using the questions they actually ask?

Social commerce tools give you a place, on your site, where you can respond to negative reviews. For example, a customer might say, "The product doesn't do X," and a company rep could answer (nicely) that the product does do X, and here's how. Or, he might say, "You're right - and we agree that it should. Our developers are working on that and we will get back to you as soon as it's available."

Social commerce gives you a way for customers to see that you're paying attention and solving their problems, in the very same environment where they are making a purchase decision. That's what I call "supporting the buying process."