How to Succeed at Social Commerce

Four ways to balance the challenges and opportunities that social commerce presents

"This is the most exciting time in the history of commerce," Bazaarvoice Founder and CEO Brett Hurt said to open his firm's annual Social Commerce Summit. "We are writing the new commerce textbook, together."

It was, perhaps, a grand claim, yet one that the conference's presenters-including marketing leaders from 3M, Facebook, Johnson & Johnson, L.L. Bean, P&G, Urban Outfitters, Xerox, and others-delivered on by sharing practical and actionable accounts of their social commerce efforts, obstacles, and lessons.

Social media adoption and related technological advancements have created a social commerce landscape in which "the paths to purchase are now unlimited," asserted Alex Tosolini, vice president of global e-business for P&G, before he detailed the social commerce challenges and opportunities the world's largest consumer packaged goods company is currently addressing. For example, Tosolini notes that there are continually opportunities to invest in new social media tools. But before doing so, he guides his team to first determine the returns on existing social media investments and then work together to select the most relevant business measures to make the case for new investments.

Hurt's partner, Bazaarvoice Cofounder and Chief Innovation Officer Brant Barton emphasized that the conventional wisdom describing a power shift from brands to consumers that, therefore, pits brands against their customers is off the mark. Instead, he said the change should be reframed as a power balance that enables a win-win relationship.

The theme of balance ran through most of the presentations and discussions. Here are four of the most noteworthy questions that were addressed:

How to balance cause and effect: Social media consultant and author Clay Shirky discussed how social media tools-including ratings and reviews, questions and answers, and other user generated content (UGC)-generated feedback loops. When you introduce a new tool to a community, the tool changes the behavior of the community, Shirky explained, and that behavioral change modifies the nature of the tool and how the tool is used. For example, Adobe Systems witnessed, and benefitted from, the feedback loop when it enlisted a group of its influencers to evaluate a new branding campaign prior to its launch. "What happened," reported Adobe Vice President, Brand Marketing John Travis, "was so much more than that." Adobe's influencers provided valuable insights to a much wider range of topics, including potential product enhancements and new ways to interact with customers. This notion, which cropped up in numerous presentations and discussions, suggested an update on Marshall McLuhan's famous insight that the media is the message: In the realm of social commerce, the social aspect is the true value.

How to balance immediate needs and the need to scale: Jeremiah Owyang, an Altimeter Group analyst, laid out priorities to help social marketing programs scale, while preventing them from becoming social media help desks. Among other recommendations, Owyang suggested that heads of social marketing programs find ways to enlist the community to assist with first-tier marketing and support, develop a social marketing center of excellence, and launch a formal customer advocacy program.

How to balance the need to measure ROI with the cost of measuring ROI. Every practitioner who spoke emphasized the importance of demonstrating return on investment, a synonym for "our right to exist," Travis pointed out. However, Travis and others noted that identifying relevant metrics was crucial because so many measure and so much data are available. Travis, who said he now invests more time forecasting returns on new social commerce programs (rather than only recording it after the fact), emphasized the importance of balancing quantitative and qualitative metrics: volume of conversation and sentiment of conversation; number of followers and quality of followers.

Dimitri Siegel, executive director of marketing for Urban Outfitters, pointed out that he is careful to avoid spending too much on ROI measurement activities that he could otherwise invest in social media activities that directly improve customer experience.

How to balance innovation and consistency. Fostering a consistent customer experience across the numerous touchpoints that social media has created represented another challenge that received significant attention. These discussions touched on the balance between policy (e.g., social media guidelines designed, among other objectives, to manage reputational risk) and empowerment (e.g., the human voice we want employees to use to engage and delight customers), as well as the balance between adoption and resistance. The idea of "paying" customers (with incentives) to complete product reviews, for example, "would have given our product managers hives," said L.L. Bean Senior Vice President and CMO Steve Fuller. To avoid that symptom, Fuller and his team developed a clear and well-defined process for evaluating and responding to ratings and reviews, a process that has never included "incentivizing" customers to review products online.

Xerox Corporate Vice President and CMO Christa Carone found it particularly challenging from a cultural and internal change management perspective to implement ratings and review capabilities on Xerox's site. Yet it was in many ways one of the most exciting stories at the event. "It's a big deal for a B2B company to do this," she said. "[But] our engineers, who take great pride in their products, had concerns." Carone and her team are working to alleviate those concerns by establishing social media guidelines, clearly showing how the company's code of conduct applies to communicating with customers in social channels, and providing social media training.

Carone's story, like those of her fellow presenters, showed how the future of commerce is likely to unfold now that we have entered the Era of Electronic Word of Mouth.