One of the hot topics in the ecommerce world right now is social ecommerce, but despite of the fact that seemingly everyone is talking about it, there aren’t that many ecommerce sites that “get it” and grow their business on a MASSIVE and CONSISTENT basis through social media for ecommerce.

Why not?

Because that’s the problem with a hot topic: after the pioneers come the shit talkers (the debates about who’s right and who’s not), and right after that the bullshitters who’ll throw get rich quick “techniques” and “tools” around so not you… but THEY can get rich quick thanks to the hard-earned cash they manage to scam out of you.

And that’s why I decided to go on a mission to separate fact from fiction about social ecommerce:

• To show you what’s a load of crap (take that bullshitters!)
• To show you there are multiple paths to victory (take that self-righteous debaters!)
• To show you how to REALLY grow your ecommerce empire with a lil’ help from social commerce

And to show you all this, I decided to grill some of the brightest minds in Social media marketing and pick their brain about social media for ecommerce.

Who I Grilled About Social Ecommerce

Paul Chaney on Social Media for Ecommerce

I believe that many misunderstand the role social ecommerce plays. They think of it as just another channel to drive sales, but in much the same way as email, PPC, or any other direct marketing channel. Because most people don’t see (immediate) sales coming from social channels like Facebook and Twitter, they discount their importance.

To answer your question more directly: I think people underestimate the impact s-commerce can have when placed in its proper perspective.

For some, it’s that social ecommerce CAN deliver sales in much the same way as direct marketing channels.

It’s getting crowded, and by reducing the organic reach (non-paid visibility) of status updates from Facebook Pages with a fairly recent update, Facebook isn’t making it any easier for small businesses. In order to get their message seen, etailers are pretty much forced to advertise. The bigger the budget, the better your chances of getting your message distributed to a larger number of people. Smaller businesses don’t have the budget big brands do, so they suffer as a result.

I disagree. I think Google Analytics has done a good job of providing metrics for social. It’s up to the etailer to complete the funnel by setting up conversion tracking and goals. Plus, many social media management tools have good reporting mechanisms in place. Hootsuite and Sprout Social, for example, can also integrate Google Analytics, which makes it even better.

The use of marketing automation tools like Infusionsoft, Marketo or Salesforce Marketing Cloud provides all the metrics needed to determine ROI.

Two things come to mind: big data and mobile.

Mobile: the growth of mobile in terms of worldwide access to smartphones and the increasing usage of smartphones by the individual, m-commerce (mobile commerce), mobile payment options, and so on.

Big data: while I don’t propose to be an expert where big data is concerned, marketing needs to be data-driven.

1. Social shopping (e.g. Motilo, Fashism, GoTryItOn)
2. Peer-to-peer sales platforms (e.g. eBay, Etsy, Amazon)
3. Peer recommendations (e.g. Amazon, Yelp, JustBought)
4. User-curated shopping (e.g. The Fancy, Lyst, Svpply)
5. Social network driven sales (e.g. Facebook, Twitter, Pinterest)
6. Group buying (e.g. Groupon, LivingSocial)
7. Crowdfunding (e.g. Kickstarter, Indiegogo)

I think anything peer-related is important due to the fact we tend to trust others like ourselves more than brands. We rely on the recommendations and experiences of peer influencers.

Top choice: it is, after all, about the shopping. Ecommerce platforms are becoming more social in their design. Social shopping sites like those listed were built from the ground up with “community” in mind.

Bottom choice: not to diminish the importance of crowdfunding, but I don’t see that as a common practice among most small ecommerce merchants. Larger brands don’t seem to utilize it either.

Rookies: those who haven’t read The Social Commerce Handbook haha.
Pros: those who have read The Social Commerce Handbook!

Pros are those who understand the nature of social media, its strengths and weaknesses, features and benefits. Having that proper understanding means you know what it can and cannot deliver. You understand its role in the sales funnel.

The secret to a successful social ecommerce strategy is this: provide “social utility”. Help people solve their problems socially and solve their social problems.

My Own Thoughts on Social Ecommerce

Although it feels a bit like I have a multiple personality disorder when I ask myself my own questions, let me stop psychoanalyzing myself for a second here and give it a try…

First off, I think people who are sleeping on the power of influence marketing should wake the hell up and smell the coffee, Robin Williams style:

You see, while most marketers (including ecommerce professionals!) think of social as being a one-to-many marketing channel, you can actually do a lot more damage by thinking of it as being a one-on-one marketing channel.

Better said: you can achieve a lot more by befriending one influencer, an authority, in your market like a well known blogger, affiliate, author, or even a competitor than by befriending a thousand potential customers. Sad, but true.

Case in point: a review of one of your products by one of the most popular sites in your niche can be so much more valuable than dozens of Yelp reviews or shares inspired by JustBought.

Another example: becoming friends with the owner of a social shopping site or starting your own so you can get preferential treatment still usually works better than your customers bragging about what they bought from you on a random social shopping platform.

In case you said “that’s not fair” just now: grow a pair, because as long as you’re not breaking any laws you’re simply doing everything you can to outcompete your competitors with social ecommerce. If you won’t, your competitors will dude.

Another thing ecommerce entrepreneurs tend to underestimate is what I call the “Momentum Trap”. People are, all other things being equal, more likely to buy a product with 100 reviews than a product with only 1 review. Since only a certain percentage of people who buy a product ever leave a review, more sales equals a higher chance to get reviews which, in turn, would generate even more sales… and a positive feedback loop is created. And there you go: popularity begets popularity, because once you’ve gained momentum it’s easier to gain even more momentum.

And you know what? I’d say 50% of people give up on social media for ecommerce before they’ve gained enough momentum to do any actual damage with it. THAT is the Momentum Trap: a mindfuck, a paradox, because how can you become popular when you need to be popular to become more popular? Lots of people are convinced it can’t be done and quit because of it, while the brutal truth is that it takes years of grinding with little to nothing to show for it… and then all of a “sudden” the numbers game starts working FOR YOU instead of against you.

Last but not least: people underestimate just how much they’re suffering from Funnel Tunnel Vision. In case you didn’t read my blog post about ecommerce content strategy deathtraps, here’s what I mean by that: a tendency to think of ecommerce marketing in terms of black and white, website traffic and sales.

Like Paul Chaney said just now: just because you don’t (immediately) see sales coming from Facebook and the like, doesn’t mean you should write off doing social ecommerce altogether. Ever heard of lead generation, for example?

People overestimate the power of any individual social ecommerce site and its importance for their social commerce strategies. Want some examples? Here you go:

• Paradoxically, Facebook is losing teenagers to WeChat, Vine, Snapchat, etc. because of its popularity: since their parents are on Facebook, they have to go elsewhere to, well, avoid their parents. If it can’t make teenagers stick around, a future generation might see Facebook as their version of MySpace.
• Amazon isn’t all-powerful either: its annual sales volumes are in the $50-60 billion range, while Chinese ecommerce giant Alibaba generates roughly 2-3 times that ($157 billion).
• Around 53 million Yelp reviews were written as of Q4 2013, but what a lot of people seem to forget is that 40 million Foursquare tips (Foursquare’s equivalent of a Yelp review) have been left as of December 2013. So, Yelp ain’t the only game in (review) town!

As you can see, it might be a good idea to do more than play the “me too game” (= only focusing on the big s-commerce platforms) and go niche instead by focusing on one or more social ecommerce platforms that aren’t market leaders on purpose because there’s less competition on those platforms.

I call bullshit! Disagree! Although Facebook’s recent update did reduce the organic reach of status updates posted by Facebook Pages (as Paul Chaney pointed out in my interview with him), there are many ways to tower above all the rest with the paid version of f-commerce AND many new Facebook advertising options are being added to the already available options regularly, which gives you even more opportunities for standing out.

The average ecommerce site either doesn’t give (paid) Facebook commerce a go… OR… targets a not that specific group of consumers (e.g. “men from the US, between 18 and 55 years of age, who live in NYC”) with some simple ads when it does give it a try.

And guess what?

That means you can outcompete your average ecommerce site by doing more advanced things such as using a Custom Audience to try and upsell to existing customers, turn newsletter subscribers into customers or to turn only the active followers of a competitor into fans of your brand through Facebook user ID targeting.

So, don’t believe the hype: f-commerce isn’t dead and social ecommerce ain’t dead either.

I can make a case for both opposing views.

You see, when I take things at face value I could argue that as long as a business is using some kind of website statistics tool (e.g. Google Analytics) that can track conversions, it can determine the ROI of every dollar spent on social media for ecommerce.

At the same time, though, social ecommerce tends to be a more indirect marketing channel as compared to say, PPC: it often assists other marketing channels with generating sales or leads or it takes a long, long time for you to gain enough momentum to grow your business with it… or both. As a result, calculating social media ROI can get tricky as f*ck. As said before, though, that doesn’t mean you shouldn’t do any s-commerce at all. That’s throwing the baby out with the bath water!

All it means is that you need to have a workaround for calculating ROI in place. And let me tell you: neither likes, shares, and followers nor “reach” (impressions/how many people saw your status updates) tells you anything about the ROI of social media. They’re NOT good workarounds.

Two better workarounds you could use are:

Reverse engineering ROI through the average income per lead: if you can’t use sales to determine the ROI of social ecommerce, then why not use leads instead? If you know X% of leads convert into sales and an average customer generates Y revenue for you, then your avg. income per lead would be X% times Y. Example: 20% of leads turn into sales and the average Customer Lifetime Value is $100, so the avg. income per lead would be $20. You can then use this number and compare it to what you’re spending on s-commerce to determine the ROI. Reverse engineering social media ROI through the average income per visitor: if you’re not even generating leads through your social efforts, then you’ll have to resort to using this calculation. What’s the sitewide conversion rate from visitor to sale? Multiply that many percent with your CLTV and you’ll have an avg. income per website visitor. Example: 2% of visitors convert and the average CLTV is $100, so the avg. income per visitor would be $2. You can then use this number for ROI calculations.

Keep in mind here man that a workaround is a temporary solution and not a permanent one. At some point, you do need to come up with an attribution model that’ll make your ROI calculations for social as accurate as possible. Be sure to check out Sam Mallikarjunan’s answer to this question a little further down this page for some more info on attribution modeling.

The Internet of Things and the maturation of social media.

The Internet of Things: more and more people across the globe have access to a smartphone every year, a larger and larger percentage of website visits and sales comes from mobile devices every year, so if I were you, I’d watch mobile like a hawk. What most people seem to forget, though, is that devices like Smart TVs (around 50 million sold in 2012, 76 million in 2013, and if the trend continues we’ll be at 141 million in 2015), wearables, and so on can and eventually WILL be used to buy products online.

Source: CNN.com

So, please don’t obsess over mobile and tablets ALONE when looking beyond desktop computers when it comes to devices, will you?

The maturation of social media: everyone doing social ecommerce has some awesome times to look forward to because the maturation of social media presents any marketer with two unique sets of opportunities.

First off, there’s the fragmentation of social networks: first we had MySpace, then Facebook, Twitter, LinkedIn, etc. and then Instagram, Vine, Snapchat, Google Plus, Pinterest and many more jumped into the fray. More and more social networks with unique features will join the club in the future and that means more opportunities for marketers to compete online.

Secondly, there’s the professionalization of social networks: first there’s only organic reach for ecommerce companies, but advertising abilities are never far behind. Facebook ads, Twitter ads, Instagram ads (still in beta with a limited number of companies): more and more networks allow you to advertise on them and the advertising options are getting more and more sophisticated as well.

I can’t begin to tell you just how MASSIVE the opportunities you can take advantage of because of the maturation of social media are. Seriously…

1. Social network driven sales (e.g. Facebook, Twitter, Pinterest)
2. Peer-to-peer sales platforms (e.g. eBay, Etsy, Amazon)
3. Social shopping (e.g. Motilo, Fashism, GoTryItOn)
4. Peer recommendations (e.g. Amazon, Yelp, JustBought)
5. User-curated shopping (e.g. The Fancy, Lyst, Svpply)
6. Crowdfunding (e.g. Kickstarter, Indiegogo)
7. Group buying (e.g. Groupon, LivingSocial)

Top choice: a new social network that’s becoming popular is like a new pond to be the big fish in for ecommerce marketers. Get in early and you might dominate it and, by the time competitors come around, they may just play catch up with you forever. Same goes for social advertising btw: being the first to try a new feature of advertising or advertising in general on a network which just introduced it is like diving into a new pond you can be the big fish in. Since social ecommerce is still maturing, I’d imagine there will be many “pond discoveries” in the coming years!

Bottom choice: I don’t like to bash Groupon or anything, but people do like coupons, saving every nickel and dime, and so on more during recessions and depressions than they do during the good times. I think that once the economy recovers and starts thriving again, group buying will play a much less significant role, hell, maybe even a niche role in the social ecommerce space.

And if I strictly look at the present: I know more than a few companies who had a Groupon deal completely backfire on them where it cost them more money than it generated.

Rookies: they try to be on every social commerce platform (literally quoting someone here) “to keep up appearances.” Some don’t even post freaking status updates to most of the profiles they have! And if rookies do regularly post status updates, they’re just doing random shit and/or posting the exact same message to multiple profiles like no one would notice… while people WILL notice.

Rookies also have a tendency to chase popularity/engagement (I call it “Response Whoring”) while that doesn’t do anything for the future of their company AT ALL.

Pros: they consciously choose which platforms to be on AND which to avoid, they have a unique strategy in place for the platforms they do use, and they optimize the performance of a platform so it contributes to the company’s future as much as possible.

Pay close attention to what I just said btw: I said “the company’s future” and not “the bottom line”, because the pros know that with social, first comes branding (and perhaps leads) and second comes sales. It is, after all, social commerce and not commerce socially.

People like to buy from people, from people they like who are similar to them, and NOT from faceless corporations. Social ecommerce is THE opportunity for your company to show its human side. Show people who you are, that you understand them, and that it’s not only about the money.

Be real, damn it!

Christine DeGraff on Social Media for Ecommerce

I think ecommerce businesses underestimate the importance of implementing a program to discover, cultivate, recognize and reward their existing customers and fans via social media and/or social ecommerce sites.

My advice is to focus efforts on building a community, a small army of “super fans” or “brand ambassadors” (whatever you want to call them) by making them feel special and by providing them with tools and incentives to help spread the word.

I think ecommerce businesses overestimate the value of a follower or a like on a social media platform. Unless these followers or likes are followed by increased engagement, referrals and sales, they are a poor indicator of success.

I agree that f-commerce is crowded. However, I also believe that, with targeted ad campaigns and the right message delivered at the right time, the average retail site can still compete. On the other hand, I don’t believe that people want to be “marketed to” on Facebook (or on any other social network for that matter) so etailers really need to find other ways to stand out from their competition besides “just” advertising.

I do not think it is impossible. Difficult, yes.

Consider traditional advertising efforts. Let’s say you have several sales people handing out hundreds of business cards at multiple business mixers. You have your ad in several phonebooks, you advertise on a few billboards, you distributed a bunch of flyers, you advertise in newspaper ads (online too), you have a storefront with a sign out front, a website, etc. Unless you have systems in place to measure all of these various advertising efforts and campaigns, it would be impossible to calculate an accurate ROI. Social media is very much like that. The big difference with traditional media versus social media is that it can take time to build traction and that is difficult to calculate in. Once you have built a strong presence, though, I don’t see why it would be impossible to calculate an accurate ROI for a particular social campaign.

The newest “big thing” with social ecommerce might just be Google’s +Post ads which will allow a Google+ post to be displayed (and interacted with) on Google’s ad network. This is available for brand pages with 1,000+ followers and is potentially going to be a huge game changer.

1. Peer recommendations (e.g. Amazon, Yelp, JustBought)
2. Social network driven sales (e.g. Facebook, Twitter, Pinterest)
3. Peer-to-peer sales platforms (e.g. eBay, Etsy, Amazon)
4. Crowdfunding (e.g. Kickstarter, Indiegogo)
5. Group buying (e.g. Groupon, LivingSocial)

I’m not familiar with the user-curated or social shopping examples you gave me, so I didn’t include them in my social ecommerce rankings. Also, I have heard such horrible stories about ecommerce companies that have used group buying and then went out of business that I cannot recommend that option at all. Finally, I don’t think crowdfunding is a viable sales strategy for a business.

Anyways, here are some additional thoughts on my top choices:

Peer recommendations: keep a close eye on these sites and quickly respond to negative feedback Social networks: Pinterest can generate tremendous traffic and sales for ecommerce sites (assuming products are appealing and pinnable). Twitter is great for quickly answering customer support questions. Facebook and Google+ are great for keeping in touch with and engaging with fans.

I think what separates the rookies from the pros with social media for ecommerce is that the pros have learned to take the marketing out of social media. People on social media sites do not want to be marketed to, PERIOD. The pros focus on encouraging participation, starting discussions, answering questions, providing value and on becoming a part of the larger community.

The most important thing to remember is that social media success is going to require a strategy and a long term commitment.

My best advice is to have a strategy in place (seek help if needed) and to pace yourself. It’s tempting to jump in and try to be everywhere at once, but I think a better approach is to master one or two and learn to “do them well” before adding more.

Sam Mallikarjunan on Social Ecommerce

People underestimate how hard it is to earn attention via social media. You need what we at HubSpot refer to as a “plausible pretence” for engaging with someone. You need a large catalog of helpful content pieces, such as blog articles, that helps the social contact perceive your outreach as value-added instead of interruptive.

People overestimate how quickly they’ll see results. It can take months or even years of active engagement with a social audience before ecommerce sites start seeing a critical mass of engagement and sales.

Ecommerce professionals also overestimate the ability of social to acquire net-new customers. Often, a large part of the value of social ecommerce is its powerful ability to optimize for customer lifetime value, for making your most valuable customers even more valuable.

Competition is crowded when the barrier to entry is low, which it definitely is with Facebook commerce. The key differentiator comes with content and engagement. Are you creating visually engaging content? Are you creating posts that consumers like to engage with? Are you encouraging and participating in discussions? That’s what separates the good f-commerce players from the bad ones.

Hogwash: you can use closed loop attribution to model first touch, last touch, assisting, social connection revenue attribution, etc. And then you can see a list of the revenue differences for people who follow you on Twitter, click through on LinkedIn, and so on.

You see, a closed loop attribution model allows you to tie your marketing efforts to your revenue, so you’ll know how much credit to give to each interaction that eventually led to a sale. Before someone converts into a customer, they’ve usually come across your brand multiple times via different marketing channels and/or campaigns, and knowing how much credit to give to each interaction can have a HUGE impact on your bottom line.

There are multiple ways of giving credit to certain interactions:

Source: seotakeaways.com

So, a bigger question than “can it be done?” is “how will we do it?” How do you model your closed loop? Because there are a number of different ways to weight, say, someone clicking through on a blog article you tweeted. That’s a question for your data analytics team and finance department to tackle. The data is there, and there will always be some wiggle room around the specifics of how social engagement and service influences customers. Too many marketers use that margin of error, the uncertainty surrounding social media ROI, as an excuse for not tracking it at all.

Personalization is an up-and-coming strategy in the social ecommerce space.

Personalization forces your business to ask big questions such as how do you build a marketing model or sales funnel that becomes more valuable to the customer over time? How do you get the right message to the right person at the right time?

We’re past the days of spamming your whole email list 3 times a week with a coupon and calling that email marketing. We’re past the days of just competing for customers already prepared to buy and just competing on margins. We need to educate and engage in a methodical, measurable, and customer-centric way.

1. User-curated shopping (e.g. The Fancy, Lyst, Svpply)
2. Peer recommendations (e.g. Amazon, Yelp, JustBought)
3. Social network driven sales (e.g. Facebook, Twitter, Pinterest)
4. Peer-to-peer sales platforms (e.g. eBay, Etsy, Amazon)
5. Social shopping (e.g. Motilo, Fashism, GoTryItOn)
6. Group buying (e.g. Groupon, LivingSocial)
7. Crowdfunding (e.g. Kickstarter, Indiegogo)

Along the same thread of personalization, you need to help people discover products and experiences they didn’t know they wanted. Social or review-based channels are a powerful tool towards this end.

Crowdfunding is less important, although crowdsourcing of content and product development is a related tactic with significant operational leverage.

Strategy and analytics separate social ecommerce pros from the newbies. Know what you’re doing, know how you’ll measure success, and iterate based on your results.

Solve For The Customer. I know it may sound a little generic, but it influences your entire business when you stop solving just for AOV (Average Order Value) and start solving for LTV (Customer Lifetime Value).

Measure everything. Test constantly. If you can’t measure it, you can’t improve it. If you can’t improve it, you’ll eventually be replaced with a robot!

Epilogue to an Inside Look at Social Ecommerce

WOW. The experts I interviewed about social ecommerce definitely shared some powerful, powerful insights with us today, wouldn’t you agree?

I noticed a couple of common themes throughout the interviews:

• Social ecommerce allows you to make your most valuable customers even more valuable
• When it comes to social commerce strategies, trying to be on every s-commerce site at once and tracking nothing (well) does NOT count as an actual strategy
• You need to build momentum, be very patient, and soft sell: be social, THEN commence commerce
• Social ecommerce seems to indirectly boost sales and, thus, requires a different mindset and different success metrics & tracking than most marketing channels require

And now the question becomes: what are you going to do after reading this? Make sure you act on whatever you’ve learned, because A) plans without implementation ain’t nothing but daydreams and B) I’ll kick your ass if you don’t.

Just kidding!

Maybe… hehe

With kindest regards,

Dennis Miedema
Motriz Marketing