Can you make money on social media? That is probably the most asked (and least answered) question in the digital age.
While everybody (and their dog) are on Facebook, Twitter, YouTube, LinkedIn and Pinterest, few businesses are able to tap onto this huge reservoir of commercial potential.
Until now, perhaps?
Backed by fascinating case studies like Etsy, Gilt, Starbucks, Hallmark, and of course, Apple and Amazon, The Social Commerce Handbook by consumer psychologist Paul Marsden and consultant Paul Chaney is a useful guide for businesses keen to "monetise" the social world we're living in. Drawing heavily from Robert Cialdini's seminal work on influence, the book infuses insights from behavioural psychology with the emerging phenomenon of social shopping.
Written in a concise manner without the rhetoric (phew!), The Social Commerce Handbook introduces several novel concepts. They include social utility (being useful to customers by helping them shop smart), social intelligence (providing customers with information to learn and profit from social situations), social curation (reviews, ratings, comments and content shared by trusted sources), and social mindset (using social media to bond, gain recognition/status and seek validated information).
Coupled with the rise of SOLOMO - Social, Local and Mobile - companies should tap on these socio-psychological attributes to generate revenue through social commerce. To do so, the authors propose "20 secrets for turning social media into social sales", namely:
1) Play the Impulse Game: Seize the opportunity to sell impulse and unplanned products which offer instant gratification;
2) Involve Them: Get consumers into the act as advisors and contributors through easy "add-an-egg" (see story on Betty Crocker's cake mix here) social media initiatives:
3) The Experiential Imperative: Leverage social media to create vivid online (and offline) experience rich retail events that generate talk and buzz;
4) Incentivise Intelligently: Offer both economic incentives (offers, member only deals) and social incentives (group buys, rewards for sharing) to encourage people to shop together;
5) Sell with Scarcity: Use the notion of limited editions, limited time offers, and limited access (members only) to enhance customer's social status by offering exclusive deals;
6) Build Consistently: Progressive and public (shareable) up-selling that takes customers from "Like" to "Loyalty" while consistently building upon their brand affinity;
7) Reciprocity Rules: Offer social gifts directly to members or encourage gifting between customers;
8) Social Validation: Provide ways to display social proof (the "monkey see, monkey do" trait of humans) that allows customers to shop smarter by learning from the shared experiences of trusted others;
9) Arm Yourself with Authority: Tap on borrowed authority - celebrities, experts, or influencers - to sell via endorsements, testimonials and picks;
10) Like and Be Loved: The power of selling through affinity networks where your friends can help their friends by offering valuable products and services;
11) Drive Discovery: To channel serendipitous sales, drive product discovery through a fusion of the social graph (personal relations of Internet users) with the interest graph of consumers. This is where personal connections meet shared interests;
12) Be Purpose-Driven: Learn from Pastor Rick Warren (who asked "What On Earth Am I Here For?"). Start with a purpose that is people-focused, meaningful. and something that others will care about;
13) Deliver ZMOTs: Develop a way to generate a "Zero Moment Of Truth" (ala Google), that is a shared word-of-mouth experience which reinforces one's advertising and PR efforts;
14) Flip the Funnel: Harness your happy customers to be a volunteer sales force, deploying them as your customer acquisition team. Retention strategies are key here (read more about this in Joseph Jaffe's book here);
15) Interest Pays: With reference to Pinterest, it is clear that people's passions and interests are a key driver of sales. Find a way to tap onto this;
16) Sell Shovels: Think marketplace and create social spaces that facilitate interaction and exchange between sellers and buyers;
17) Shopping First, Social Second: Focus first on helping others to solve their shopping problems - ie finding, researching, deciding, buying and enjoying - by deploying social technology;
18) Sell to Niche Markets: With the Long Tail effect (multiple small markets of micro-niches) in mind, find unique market niches and build loyalty among ardent hardcore fans with a passion for the stuff that you sell;
19) Get Rated. Get Reviewed: Allow customers to share ratings, reviews, comments, and feedback about you and your products. A little negativity sometimes makes it more believable; and
20) Go Mobile: Ride the huge global smartphone wave, and offer social utility with mobile technology that capitalises on the SOLOMO effect. Help people to shop smarter together.
My favourite example in the book - Fashism.com - is a foremost proponent of social commerce. The online community of young fashion-conscious consumers encourage users to use a smartphone to take a picture of an outfit that they're keen to purchase, upload it to the site, and seek feedback from members. Working with retail and fashion companies, Fashism allows users to "claim" dresses while enjoying both social utility and status with their peers.
Short and succinct yet packed with useful case studies and tips, The Social Commerce Handbook is a useful addition for marketers, entrepreneurs and business folks keen to crack this new space. The book is easy to read and provides a good overview of salient ideas in social commerce. Highly recommended for anybody keen to better understand this space.
Labels: consumer behaviour, e-commerce, f-commerce, paul chaney, Paul marsden, retail, social business, social incentive, social psychology, social selling, The Social Commerce Handbook