Loyalty trends and best practices

Put Data about Social Engagement in the Right Context

by Matt Ellinwood
October 10, 2012

Last week, Internet Retailer published an article called Consumers Seek Discounts that summarizes the data in a report on consumer purchasing habits and social media put out by Hybris, an eCommerce technology provider.

The results of the survey lead, at first glance, to the conclusion that social media engagement has an extremely weak effect on purchase behavior and that the effect it does have is not optimal. For example, the survey found the primary reasons for engaging on Facebook and Twitter to be keeping up with discounts and sales--hardly the ideal way for a retailer win more profitable business from customers who should be among their most engaged and valuable. 500friends has some insight on this point--we've seen the same phenomenon. In fact, upon inspecting the Social Dashboards for our clients, we found a case where a retailer's worst customers, i.e., their least profitable customers, were grossly over represented in their Facebook fan community. We were initially surprised by this result, but then we dug into the retailer's Facebook page and found that they were posting deals and coupons almost exclusively.

If your social media manager is only posting coupons to Facebook, your Facebook followers will be deal-seekers. Contrast this with PetFoodDirect, who has an engaged fan base that posts and interacts with pet pictures in huge numbers, but to get that result, they had a strategy and invested in it to build the right community.

Additionally, the article states that 66% of respondents were not willing to buy directly from a retailer's social media page. Emphasis on directly. This does not mean that customers engaged with a retailer through social media channels are not more likely to buy from that retailer--they just don't want to buy within that channel. The picture is bigger than the conclusions drawn from this survey data--as always, social media, customer engagement, and customer loyalty have to be studied within a context broad enough to lead to accurate conclusions.


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