The Multiplier Effect of Social Media

Customer Experience
Customer Experience

One of the most effective yet least capitalized on aspects of Web 2.0 today is social commerce, the application of interactivity between users who create user-generated content (UGC) and its resulting increase in measurable sales. Social commerce also has huge opportunities for marketing optimization and real returns. However, there are three problems I see with some retailers' social commerce strategies.

1. Retailers don't recognize the strategic opportunity of user-generated content.

Typically, an online retailer decides, "Let's add reviews to our site," hoping to boost sales conversion and appear more customer centric. Truth is, simply having customer reviews appear on a site accounts for just 10 percent of the opportunity of this user-generated content. When customer reviews and other user-generated content becomes part of the overall marketing-and operational-strategies of a company, the real benefits abound. For example, review content can help marketers uncover the most important selling features, then they can use customers' own words as marketing copy in advertising, and product managers can use this feedback to prioritize product improvements.

2. Retailers don't strategically integrate customer reviews into their e-commerce operations.

Stopping at just letting customers post reviews is a tactical error. The strategic steps involve integrating user-generated content into your e-commerce operational systems to help raise the level and benefits of a customer's voice. In doing this, you can make user-generated content part of the everyday experience, incorporating it into email, search, and navigation. For example, golf and tennis retailer Golfsmith conducted an A/B email test. While the graphics were identical, they added customer ratings to the body of the email and changed the subject line of the email to refer to "Top Rated products." The email version featuring customer ratings resulted in 42 percent higher revenues compared to the identical version that did not include ratings.

3. Retailers limit the scope of their social commerce efforts to the online team, when it offers far-reaching, cross-functional opportunities.

Some mature retailers have their own internal "community manager" responsible for all types of social marketing, which is great. However, this champion for UGC must be a collaborative, integrated change leader-a cross-functional expert. The whole idea behind social commerce is that you bring the "social" into the entire "commerce" process. Here are some ways the best retailers in the world make use of their user-generated content (and these go way beyond the website):

Merchants use review reports and analytics to drive buying and merchandising decisions, based on customer likes and dislikes.
Catalogers use copy from reviewers.
Senior executives use review data to improve products.
The analytics team integrates word-of-mouth data with Web analytics.
The sales team uses the customer voice to train new sales reps.

This strategic, evolutionary path of social commerce requires an internal UGC champion to involve and impact all areas of the company.

In the end, the customer voice can have a multiplier effect in your company. As more departments in your organization use the customer data and content to change the way they do business, each of them will see a greater impact in what they do. They, in turn, will optimize their areas based on a customer-centric foundation.

Soon enough, you start to see something different going on in your company. Not only are you making more money, but lo and behold, you've become a customer-centric company. And perhaps that will even extend the tenure of your CMO.

About the author: Sam Decker is the CMO at Bazaarvoice. He is also the author of How to Market with Computer User Groups and 301 Do-it-Yourself Marketing Ideas. His marketing blog was recently ranked among the top 25 marketing blogs by Alexa.