Today I sat on a panel at the IBM Websphere Commerce Leadership Summit, with panelists Brant Barton, co-founder of Bazaarvoice, Duke Marr, VP of Product Management at 1-800-Flowers.com, and Stan Payson, VP of Interactive Media at David’s Bridal, moderated by Forrester‘s Sean Corcoran. The panel was called Answering the Burning Question of Social Commerce ROI. I enjoyed the discussion, especially with the varied perspectives of the participants. There were lots of lessons learned shared – in particular Duke and Stan had terrific insight at different ends of the social media maturity perspective. Stan’s company is just getting started, building a strategy, while Duke’s team has a foothold in just about every social and new technology (especially mobile) tactic out there working hard to be first. 1800Flowers.com was the first to do commerce on Facebook, for example.
Some key thoughts about ROI shared on the panel:
Measurement and ROI are not the same. Use measurements to calculate ROI (Return on Investment).
Practical experience shows that sometimes ROI doesn’t come right away.
When just getting started, it’s helpful to be able to attribute web traffic through links shared in social networks, promotion codes, specific landing pages, etc. But that is just the tip of the iceberg for measuring ROI.
Longer term, lifetime value of a customer is a key metric to understand the net results of leveraging advocates.
What’s clear: businesses can measure ROI, they are focused on the long term, and there is much room for education of marketers in this space. With my mind on ROI I spotted this presentation shared on Twitter today (feed readers may need to click through to the post to read). Between the panel and the presentation my mind is overflowing with social media ROI goodness. Yours will be too after going through this – Olivier Blanchard captures the essence of ROI from social media in a humorous, easy-to-understand way. Worth browsing through. While you’re figuring out who Olivier Blanchard (aka TheBrandBuilder) is, you may also want to check out his post today debunking social media myths.
Folks shy away from the term “social commerce.” Why? I asked the question on Twitter, “What’s the first thing that pops in your mind when you hear the term ‘social commerce?'” and I received quite a number of cynical (and humorous) responses:
@illig: “Social commerce: Prostitution, human trafficking and ice cream socials. In that order. But I’m not normal. : ) “
@heatherrast: ” (1)selling out your friends (like personal info?) (2) the cost of selling out your friends (3) revenue from adsense ads”
Taken out of context, my question also sparked a little debate about what social commerce is and caused friend Aaron Strout to weigh in with some great dialog happening in the comments.
Here’s the danger: People want conversation in social networks to be genuine and to avoid overt marketers hawking their wares. Social networks bring people to connect, not to shop. But as technology evolves and people look to leverage their networks as information sources, invariably those networks will turn to helping each other make purchases. I, for one, take a friend’s recommendation as an important information source before buying – and I have to admit consumer ratings and reviews are helpful and important to me.
Back to the Future
As far as I could dig up, one of the first posts defining social commerce was back on December 23, 2005. Steve Rubel wrote an intriguing post on 2006 Trends to Watch. Steve started to predict the trend of advertising and commerce shifting to blogs:
“Social commerce, however, is an area that I think holds a tremendous amount of promise as a way for bloggers to make money. It’s a win-win for the bloggers, product marketers and existing e-commerce sites.”
His post went on to show examples of how e-commerce sites had extended functionality to allow bloggers to take advantage of the Long Tail and bring the ability to conduct commerce on their blogs, beyond the innovation of Google ads. At the time, Yahoo!’s Shoposphere was the highlight, where users could collaborate on shopping lists. More posts went on about preparing for social commerce as the next big wave of innovation that would push the continuing trend of online shopping growth (combined with broadband adoption at home and at work along with the continual adoption of Web 2.0 technologies like Flash). But the term “social commerce” seemed vaguely defined to include innovation in customer experience on commerce sites, and overall the term remained nebulous.
The Year of Social Commerce?
Jay Deragon predicted 2008 would be the Year of Social Commerce. On January 1, 2008, he wrote:
While social networks continue to grow exponentially the next growth curve will be driven by the “holy grail of economics“, social commerce. Social commerce may actually become the dominant development in 2008 and subsequently turn business models upside down and inside out.
Jay is on to something here. While the last year brought the challenges of Facebook’s Beacon product, and there continues to be large debates about ways to monetize social networks, big ticket retailers are starting to get involved by adding functionality on their own e-commerce platforms. Already we have seen reviews, stories from other customers and ratings start to really permeate the online retail space – where retailers that don’t have them are becoming the exception. (Bazaarvoice is a business partner of my agency, Rosetta, and one of a few vendors who provide user ratings and reviews as a service to be integrated into a web commerce user experience.) In addition to sites adding this functionality – and receiving a bump in conversion % of visitors – here are some other examples of what vendors are doing:
Facebook Connect and platforms like Open I/D allow corporations to authenticate social graphs on their own sites.
IBM did a recent casestudy integrating the capabilities of Lotus Connections with Websphere Commerce.
Companies like LiveWorld have launched products to integrate social interactions directly on websites, like their recently launched LiveBar product.
Based on watching what vendors out there are doing, I’d argue that beyond the initial premise of bringing commerce to social media tools and networks,it appears the next wave is bringing the social networks back to commerce sites. Some companies like eBay and Amazon do this well, but I think more merchants will be trying to figure this out. Bringing customers together to help on purchase decisions can be a good thing if it’s handled properly and e-commerce companies engage their customers the right way, beyond just user ratings and reviews. What do you think?
Today I sat on a panel at the IBM Websphere Commerce Leadership Summit, with panelists Brant Barton, co-founder of Bazaarvoice, Duke Marr, VP of Product Management at 1-800-Flowers.com, and Stan Payson, VP of Interactive Media at David’s Bridal, moderated by Forrester‘s Sean Corcoran. The panel was called Answering the Burning Question of Social Commerce ROI. I enjoyed the discussion, especially with the varied perspectives of the participants. There were lots of lessons learned shared – in particular Duke and Stan had terrific insight at different ends of the social media maturity perspective. Stan’s company is just getting started, building a strategy, while Duke’s team has a foothold in just about every social and new technology (especially mobile) tactic out there working hard to be first. 1800Flowers.com was the first to do commerce on Facebook, for example.![Reblog this post [with Zemanta]](https://i2.wp.com/img.zemanta.com/reblog_e.png?w=730)
Danger?