Article

Social media for retailers: Focus on Facebook

A study of 10,000 online shoppers reveals where retailers should focus their social media efforts.

February 24, 2010

Kevin Ertell has more than 10 years of executive-level retail experience at Borders and Tower Records. He is currently the vice president of retail strategy for customer satisfaction research firm ForeSee Results.

Everyone is talking about social media, and there are lots of opinions about how to do it right. So how do consumers actually interact with retailers via social media? How would they prefer to interact? What value are they seeking from their interactions with retailers via social media?

As part of a study of nearly 10,000 visitors to the biggest e-retail Web sites in the United States, ForeSee Results wanted to use the methodology of the American Customer Satisfaction Index (ACSI) to examine these issues, because the ACSI is able to show how different elements of a shopper’s interactions with a company (including on social media) impact their purchase intent, loyalty, and recommendations.

What we found is validation that social media is a viable marketing strategy when we understand what our customers want and know which social media platforms they frequent.

Key findings include:

• 56 percent of shoppers to top e-retail websites who interact with social media Web sites have elected to "friend" or "follow" or "subscribe" to a retailer on a social networking site like Facebook, Twitter and YouTube.
• Facebook is, by far, the best place to reach shoppers—both because it’s where they already are and it’s where they want to hear from retailers.
• Customers mainly interact with retailers on social media sites to learn about products and promotions—a marketer’s dream come true.

They Like Us! They Really Like Us!

Of the 69 percent of online shoppers who say they use social media sites, more than half (56 percent) choose to proactively interact with companies on social sites by "friending" or "following" at least one retailer. This is an amazing testament to customer loyalty and interest in social engagement. Shoppers are actually choosing to engage in relationships with retailers on social sites.

However, two-thirds (61 percent) of online shoppers who interact with companies on social media sites "friend" or "follow" fewer than five companies. Retailers, our customers are giving very few of us their ear. We need to do our part in maintaining these relationships with the kind of content and engagement these customers want and deserve.

On the other hand, nearly one-fifth of social media users interact with 11 or more retailers on social sites. There are shoppers out there with large numbers of retail connections.

There is a payoff to these relationships. The highest levels of satisfaction with retailers’ own sites were found among shoppers who interacted on the largest numbers of social media sites. In fact, site visitors who also interact with a company on a social media site are more satisfied, more committed to the brand and more likely to make future purchases from that company. This is a bit of a chicken-and-egg phenomenon. It is likely that the customers who are more satisfied and loyal to begin with are the ones who will friend us on Facebook or subscribe to our YouTube channels. However, research shows that when retailers provide rewarding social media experiences, customers become even more satisfied and loyal.

In other words, it’s a cycle. Our most loyal customers are likely to reach out to us on social media, but it’s how we interact with them once there that fosters greater loyalty and the likelihood to buy from us in the future.

Where It’s At: Facebook

In terms of pure usage, more than half of all online shoppers frequent Facebook, while one-third of shoppers say they don’t use any social networking sites. One-fifth visit YouTube. Facebook’s dominance is even more apparent when we narrow our focus to shoppers who visit social sites regularly. Among online shoppers who engage in social media, more than 80 percent are using Facebook.

This information confirms what we already know: Facebook is hugely popular. In fact, if Facebook were a country, its "population" would make it the world’s fourth largest. However, an unofficial look at the Facebook pages of the Top 100 online retailers (by sales volume, according to Internet Retailer) reveals that one-quarter do not have any formal Facebook presence and another quarter have fewer than 10,000 fans. In other words, half of the top online retailers have a minimal to nonexistent Facebook presence. And these are the top retailers! Imagine how the Top 500, Top 1000 or Top 5000 fare.

Give the People What They Want

Although more and more companies employ social media (especially Twitter) as a means of answering their customers’ technical questions, our study shows that while technical support is one option essential to the medium, far more people use social networking with retailers to learn about sales and product information. 49 percent of respondents who "friend" or "follow" companies through social media do so to learn about special deals and options. Close behind, 45 percent of users do it to learn about products. Only 5 percent use social media primarily for customer support. This should be exactly what marketers want to hear: they want our information, sales and specials. We just have to learn how to give it to them effectively.

These findings run somewhat counter to the conventional wisdom that you have to engage users on social media with snappy content and avoid being too "salesy." Although snappy content can help to engage consumers, they follow retailers because of brand, deals, and products, not our witty repartee. If we’re smart about our Facebook content, we won’t turn anybody off.

Conclusion

Get a Facebook page! Make sure you have someone to monitor it and post good, timely information. Promote it to your most loyal customers through your regular communications venues (emails, ads, stores, coupons, etc.). Use your Facebook page to post promotions and product information.

I’m making it sound simpler than it really is. There are a lot of ins and outs to social media strategy, and the right formula will differ for each company. But for those retailers who have a poor to middling presence on Facebook, it’s a good place to start while you figure out how social media plays into your global brand strategy.

Here’s a truly revolutionary idea: don’t listen to all of my ideas and opinions about what your customers and prospects want based only on this one study. It’s a good start, but find out from your customers whatthey want. Find out what social media sites they frequent. Find out whether they want sales or coupons or technical support or product information. Find out how satisfied they are with your current social media efforts and how likely they are to purchase, return, and recommend your business as a result of your interactions. There’s a lot about social media and online marketing initiatives that is really hard to figure out, but asking customers what they want from you is a great way to begin.